Objective

To determine whether the Department of Labor (Department) is adequately conducting labor violation investigations in New York City. The audit covered the period from January 2019 through March 2023.

About the Program

Nationwide, labor law violations, such as wage theft, minimum wage violations, and child labor violations, have increased in the wake of the COVID-19 pandemic. In fiscal year 2021, for example, the U.S. Department of Labor’s Wage and Hour Division found 2,819 minors employed in violation of the law and assessed employers with nearly $3.4 million in civil money penalties.¹ Further, the Department of Labor (Department) reported a sharp increase – of 68% – in child labor law violations in New York in 2022 compared with 2021.

The Department is responsible for enforcing New York Labor Laws (Laws). These Laws, which provide requirements related to minimum wage, overtime, hours of work, child labor, and payment of wages and wage supplements (i.e., benefits such as vacation and sick pay), protect the rights of and improve working conditions for New York’s workforce. The Department’s Division of Labor Standards (Division), which comprises 14 District Offices, including seven² in New York City, is responsible for receiving and investigating labor complaints (claims) and has the authority to assess penalties and fines if employers are found to be in violation of the Laws.

Claims are initiated through various means, such as directly from an anonymous or named complainant, via a concerned citizen or advocacy group, or through the Division’s own sweeps of industries prone to unlawful practices (e.g., nail salons). The Division’s Central Intake Unit, based in Albany, processes complaints for the Division statewide. If the claim appears to be valid, it will be registered as a case in the Division’s Worker’s Protection Audit/Management system (WPM) and an investigation can be launched. The WPM is used to track details chronicling the history of the case. The Division’s Labor Standards’ Field Investigator’s Manual (Manual) provides guidance to investigators to follow when conducting wage-related investigations, including target completion dates. A case is complete when the investigator concludes the complaint is not substantiated; when the employer agrees the violation(s) occurred and agrees to pay restitution; or when the employer is unwilling to comply with the investigator’s recommendations – in such cases, the Division may assess fines and penalties to the employer.

Key Findings

We identified weaknesses in several aspects of the Department’s oversight of labor investigations in New York City. Similar to a prior audit (Report 2019-S-46), we found significant delays in the Division’s investigation activities that, in turn, diminish the efficiency of case resolution and restitution for workers. These delays further lessen the likelihood that employers are held accountable, and in the meantime they are able to reoffend. Further, we found:

• Claims that have remained open, without resolution, for lengthy periods – delaying the start of investigations. We found this to be the case for 791 (50%) of the 1,586 Pending, Incomplete, Duplicate, No Jurisdiction, and Invalid claims.
• Delays in completing investigations of child labor cases. For example, of the 87 child labor cases in our review, the Division did not meet the 3-month target completion timeline for 56 cases (64%), including 36 cases that took more than a year to complete or are still in Active Investigation. Moreover, the Division does not have a process in place to identify which child labor cases involve hazardous employment, which require a more stringent time frame for investigation completion.
• Delays in completing investigations of wage-related cases (non-child labor). For example, investigations were not completed in the targeted 1-year time frame for 80% of such cases.
• Other oversight and monitoring issues, including: cases in Active Investigation that were not reassigned timely when investigators retired or resigned; the Manual used by investigators for guidance that needs to be updated; and a lack of collaboration between the Department and the New York City Department of Education (DOE).

Key Recommendations

• Establish a mechanism to ensure claims are reviewed promptly and labeled accurately, and explore whether a dedicated Central Intake Unit might have a role in achieving this.
• Develop guidelines to identify child labor cases involving instances of hazardous employment.
• Develop target completion time frames for all child labor and wage-related case investigations and ensure they are being followed.
• Provide additional oversight and monitoring, including revising the Manual with updated policies and procedures; ensure cases are reassigned in a timely manner upon an investigator’s departure; and collaborate with DOE on child labor-related issues.

1 U.S. Department of Labor: Increases in Child Labor Violations, Young Workers’ Injuries Prompts Enhanced Outreach, Strong Enforcement by US Department of Labor, July 29, 2022
2 One of the seven districts, District 5, includes the Bronx, Westchester, and surrounding areas.