Minimum Wages & Overtime Pay: Change in Statute of Limitations Would Better Protect Employees

GAO discussed the Fair Labor Standards Act's (FLSA) statute of limitations, focusing on the impact of those limitations on a Department of Labor (DOL) investigation of a supermarket chain. GAO noted that: (1) there is no clear requirement for when the FLSA statutory limitations should stop running; (2) the DOL Wage and Hour Division (WHD) can request, but not require, that employers waive the statute of limitations in FLSA back wage cases; (3) employers can revoke their statute of limitations waivers, and other waivers can expire before employers pay all back wages owed; (4) the average case resolution time from complaint filing to investigation completion was 10 months; and (5) the FLSA statute of limitations differs from the statute of limitations for other labor laws. GAO also noted that: (1) 3 supermarket employees lost over $11,800 in back wages because WHD did not begin to investigate their overtime violations complaints, filed in 1984, until 1986; (2) although the supermarket chain agreed to waive the statute of limitations during a subsequent expanded investigation, DOL settled the case for less than 25 percent of the $1.2 million the chain owed; (3) DOL settled the case out of court because similar court cases against the supermarket chain were settled in the company's favor; and (4) data inaccuracies may cause DOL to overstate the percentage of back wages employers agree to pay.