Detailed Information on the
Wage and Hour Enforcement and Compliance Program Assessment

Evaluating performance targets and, where appropriate, implementing more ambitious quantitative targets to measure success in achieving goals.

Standardizing organizational process for developing and monitoring strategic partnerships.

Reviewing the recommendations of external evaluators made as a result of contracts ending December 2007. WHD will incorporate recommendations into FY 2009 planning process and performance plan, which includes target setting, as appropriate.

Drafting standardized agreement templates for partnerships with government entities.

Incorporating partnership procedures in agency's Field Operations Handbook.

Measure: Complaint Resolution: Number of workers for whom there is an agreement to pay or an agreement to remedy per 1,000 enforcement hours in complaint cases.

Explanation:Complaint investigations represent approximately 70 to 75 percent of enforcement resources and provide WHD with the opportunity to change the behavior of individual employers while promoting long-term employer compliance. WHD's complaint efficiency measure is directly tied to the goal of ensuring that workers receive the wages due them. By comparing the number of workers with positive outcomes to the time spent investigating compliance status, this efficiency measure drives the agency toward fair and productive investigations. The baseline of 293 workers assisted per 1,000 hours was established in FY 2006.

Measure: Low-Wage Industries: Number of workers in low-wage industries for whom there is an agreement to pay or an agreement to remedy per 1,000 case hours

Explanation:WHD has organized its statutory enforcement responsibilities to maximize benefits for the most vulnerable in the workforce - low-wage workers, immigrants, young workers, and the working poor. The low-wage industry compliance goal has traditionally been measured by conducting statistical investigation-based compliance surveys within individual low-wage industries, such as garment manufacturing, health care, agriculture, restaurants and grocery stores. As many of the most vulnerable employees protected by the laws that WHD enforces work in low-wage, high-violation industries, WHD's monitoring of compliance in low-wage industries can demonstrate progress towards enhancing and protecting the welfare of the Nation's low-wage workers. Further, by comparing the number of workers with positive outcomes to the time spent on investigations, the low-wage industry efficiency measure drives the agency toward fair and productive investigations of violations that affect the most vulnerable workers.

Measure: Employer Recidivism: Percent of prior violators who achieve and maintain Fair Labor Standards Act (FLSA) compliance following a full FLSA investigation.

Explanation:WHD's recidivism goal??one of the agency's three enforcement outcome areas??measures WHD's effectiveness in obtaining and sustaining long-term employer compliance following an enforcement action. Success toward this outcome goal is measured through the reinvestigation of a statistical sample of prior violators of the Fair Labor Standards Act (FLSA), which represents a majority of WHD's enforcement actions. Although WHD had seen modest but steady increases in compliance in the first four years following establishment of this new measure in FY 2003, the overall rate of compliance among prior violators declined in FY 2007. It remains unclear whether this drop in compliance is a long-term pattern or an aberration. These measures of employer compliance demonstrates overall employer compliance levels, however, they do not reflect the severity of violations, which is measured by the number of workers affected and back wages due.

Is the program purpose clear?

Explanation: The Wage and Hour Division's (WHD) mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce. This mission is continuosly communicated to the public, including through presentations, reports, regulatory guidance and the WHD website. The WHD is responsible for enforcing a number of laws that establish minimally acceptable standards for wages and working conditions in this country. These labor standards are set forth in the Fair Labor Standards Act (FLSA), the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), the Family and Medical Leave Act (FMLA), the Employee Polygraph Protection Act (EPPA), the Davis-Bacon Act (DBA), the McNamara-O'Hara Service Contract Act (SCA), the Walsh-Healey Public Contract Act (PCA), the Copeland Anti Kickback Act (CA), the Contract Work Hours and Safety Standards Act (CWHSSA), the Immigration and Nationality Act (INA), as amended, the OSH Act (field sanitation and temporary labor camp standards in agriculture), and the Consumer Credit Protection Act.

Evidence: Mission statement (http://www.dol.gov/esa/aboutesa/mission/whd/whdmiss.htm) WHD FY 2005 and 2006 Annual Performance Plans 1998 Report on Low-Wage Initiatives 1999-2000 Report on Initiatives Fair Labor Standards Act (HTUhttp://www.dol.gov/esa/regs/statutes/whd/FairLaborStandAct.pdfUTH); Migrant Seasonal and Agricultural Worker Protection Act (HTUhttp://www.dol.gov/esa/regs/fedreg/final/97_6036.pdfUTH) Family and Medical Leave Act; Service Contract Act (HTUhttp://www.dol.gov/esa/regs/fedreg/final/2000018635.pdfUTH) All other Acts enforced by WHD (HTUhttp://www.dol.gov/esa/regs/statutes/whd/summary.htmUTH) Regulations, 29 CFR Parts 3-8, 500-697, 775-795, 801, 825, 870; 20 CFR 655

Does the program address a specific and existing problem, interest, or need?

Explanation: WHD's purpose is to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce. The statutes administered by WHD collectively impact most private and State and local government employment. These laws protect over 130 million workers in more than seven million workplaces throughout the U.S. and its territories. The initial purpose of the statutes enforced by WHD, to ensure minimally acceptable national labor standards, remains relevant today. Continued allegations of wage and hour violations, documented violations of the wages and working conditions statutes and external socio-economic and demographic data all suggest continued need for the labor standards protections set forth in the statutes that WHD enforces. Enforcement statistics from recent fiscal years reveal the continued need for the program, as approximately $200 million is recovered each year for workers, including those in low-wage industries. In FY 2005, WHD recovered more than $166 million for 241,379 employees. These findings represent a 26 percent increase in back wages recovered and an 11 percent increase in employees receiving back wages since fiscal year 2001. In FY 2005, WHD collected a record $45.8 million for 96,511 low-wage workers. On average, 1,400 workers are illegally denied leave under the Family and Medical Leave Act (FMLA). In addition, nearly 4,000 youth are found illegal employed, and 1,000 are found employed in hazardous occupations. Although declining, 44 youth on average are killed on the job each year. An estimated 9,000 young workers are injured on the job annually. As further evidence of the compliance challenges faced by the agency, WHD receives an estimated 30,000 allegations of non-compliance each year. Roughly one quarter of employers with violations of the minimum wage and overtime provisions of the Fair Labor Standards Act are found in violation upon reinvestigation. Research conducted in independent evaluations also highlights the continued potential for high non-compliance with labor standards in certain industry sectors, specifically with respect to violations of the overtime and minimum wage standards. This evidence is substantiated by data collected by the Bureau of Labor Statistics (BLS), which estimates that 2 million workers (2.7% of all wage earners) earn wages at or below the Federal minimum wage. WHD's programs continue to promote the economic security of workers and their families by recognizing that the key to ensuring workers' rights is to proactively increase compliance on behalf of low-wage workers in industries with the most persistent and serious violations; promote long-term sustaining compliance among employers that the agency investigates; and maximize benefits for the greatest number of workers through efficient handling of complaint information.

Evidence: WHD Statistics Fact Sheets for 2001-2005 (Uhttp://www.dol.gov/esa/whd/statistics/200531.htmUTH) The U.S. Department of Labor Report to Congress: The Agricultural Labor Market-Status and Recommendation Estimates of the Size and Characteristics of the Undocumented Population (Pew Hispanic Center, dated March 7, 2006) On the corner: Day Labor in the United States (Center for Urban Poverty dated January 2006) Hopeful Workers, Marginal Jobs (Economic Roundtable dated 2005) Mathematica/Boston University evaluation of low-wage FY 2004 (memo and spreadsheet 4/13/04), containing CPS data Characteristics of Minimum Wage Workers 2004 (Uhttp://www.bls.gov/cps/minwage2004.htmUTH) FY 2005 Annual Report (http://www.dol.gov/_sec/media/reports/annual2005/)

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: WHD has responsibility for a wide range of labor standards statutes. To some extent, States and local authorities may have laws that provide similar protections to certain segments of the workforce. However, in design and in practice, the various federal and State labor statutes tend to be different in scope, intended beneficiaries, and in application so as to avoid duplication or conflict. For example, WHD has responsibility for a number of labor standards statutes for which there is no comparable State, local or other Federal provision. These include certain provisions of the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), the McNamara-O'Hara Service Contract Act (SCA), the Walsh-Healey Public Contract Act (PCA), the Copeland Anti Kickback Act (CA), enforcement provisions of the Immigration and Nationality Act (INA), as amended, and the Employee Polygraph Protection Act (EPPA). The coverage provisions and scope of State laws varies significantly with that of the federal statutes. Many States may have labor standards statutes that offer similar protections (FLSA, FMLA, Davis-Bacon and Related Acts, and certain provisions of MSPA), but variations exist among these State statutes, which prevents a significant amount of overlap. For example, the minimum wage levels vary between the States with some States have higher or lower levels than set forth in the FLSA. Some State laws exclude from coverage any employment subject to a comparable federal statute. In addition, all States have instituted child labor laws, but these standards vary in their coverage, in starting and stopping times, and in the total amount of hours permitted either by day or by week (i.e. Alaskan law allows up to 23 hours of work during a school week, while the Federal law permits 18 hours of work during a school week). Exemption criteria for State laws also vary significantly, which impacts the specific beneficiary. For example, often State labor laws are designed to apply to those workers not subject to the federal law. Some statutes like the federal FLSA and FMLA provide employees with a private right of action to pursue remedies on their own. However, in recent Supreme Court decisions, employees of local and State governments were restricted from seeking recourse under the FLSA in either State or Federal courts. Where there are similar State and federal statutes, the practical application of the laws are not excessively duplicative due to the varying degrees of enforcement by the States and the coordination between the States and WHD. For example, the State of Florida has a constitutional law providing for a minimum wage, but no minimum wage enforcement presence. The State of Maryland, which also has a minimum wage and overtime law, recommends employees having concerns with non-payment of the minimum wage or overtime contact WHD for appropriate remedies. In States that have greater labor standards than federal law provides, WHD coordinates its enforcement responsibilities with State authorities to ensure that workers receive the maximum protection. WHD has entered into partnership agreements, memoranda of understanding (MOU) and other less formal arrangements to avoid conflict and to ensure that the agency's compliance priorities complement rather than duplicate State efforts. Some arrangements are designed to enable the local WHD offices and States to work together to maximize the impact of their respective enforcement and compliance assistance efforts. For instance, a recent MOU with the California Labor and Workforce Development Agency, a State with a higher minimum wage than the Federal level, seeks to maximize efforts between the agencies with regard to industries which have a history of labor law violations and regularly pay a significant number of workers at or below the minimum wage.

Evidence: Currently, 44 States and the District of Columbia have minimum wage laws in effect while the remaining 6 States have no minimum wage requirement. All of the States have child labor laws or regulations. Eleven states and the District of Columbia have individual FMLA statutes. The laws in these states may contain elements that are more strict, less strict, or identical to those contained in the federal FMLA. Federal MSPA requires the registration of farm labor contractors and contractor employees who furnish, recruit, employ, solicit, hire, transport, or house migrant or seasonal workers. A small number of States have such a requirement. Thirty-two States have "Little Davis-Bacon" statutes that apply to some federally-assisted construction contracts that also have some degree of State funding. No State laws apply to Federal construction or service contracts that are subject to the DBA and SCA. State Labor Laws (http://www.dol.gov/esa/programs/whd/state/state.htm) Monthly Labor Review, 1/2006 (http://www.bls.gov/opub/mlr/2006/01/art1full.pdf) State Minimum Wage Table (HUhttp://www.dol.gov/esa/minwage/america.htmUTH) California Labor and Workforce Development Agency MOU (11/04) WHD and the NE Region of Wyoming Department of Workforce Services MOU (4/04) WHD and Florida Department of Business and Professional Regulation MOU (4/05)

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: WHD balances three complementary strategies - compliance assistance, partnerships and collaborative efforts, and enforcement (both compliant-driven and targeted) - to promote long-term compliance. As of March 2006, WHD had 1,254 employees onboard, which included 759 investigators reporting to 48 district offices nationwide. WHD's compliance assistance activities promote voluntary compliance among employers and within industries. WHD undertakes a wide range of compliance assistance activities including presentations, seminars, speeches, mailing and exhibits. in FY 2005 WHD staff participated in 2,278 compliance assistance activities. Over half of the events were directed to employers and employer associations. Just over 16% of the events were for other Federal, state and local governmental agencies amd 13% were directed to employee or employee representatives. WHD's partnership and collaborative activities are used to leverage resources and broaden the impact of other strategies. WHD has expanded its strategic partnerships with business associations and businesses. The agency maintains its successful partnership program with employee advocay groups that have access to low-wage workers, and with other Federal and state agencies. WHD has expanded its efforts to provide compliance assistance to employees and employers in immigrant communities. These partnerships offer efficient ways to disseminate compliance assistance information to employers and provide access to intermediaries who may intervene on behalf of workers who are too reticient to complain. WHD's directed enforcement program in identified low-wage industries serves to detect, remedy, renalize and deter violations of the law, particularly in industries where many workers are reticient to exercise their rights. Over the last decade, WHD has devoted between 25-30 percent of its enforcement resources to tragted investigations in low-wage industries. These industries, such as garmet manufacturing, janitorial, restaurants, landscaping and agriculture, are characterized by the employment of immigrant workers who are particularly vulnerable to explotation and young workers, not particularly versed in FLSA laws. These industries have also had high incidences of FLSA violations in the past. WHD's complaint program not only serves the individual customer making the complaint, but is a means for detecting and remedying violations on behalf of similarly affected employees. Resolving complaints represents approximately 70-75 percent of the program 's enforcement resources each fiscal year. WHD receives about 31,000 complaints a year. WHD analyzes its complaint data to employ the most efficient investigative strategy in industries with high complaint rates and high measures of non-compliance and to determine which characteristics of complaints may signal underlying compliance conditions. Various independant evlautions, as well as WHD continual improvement upon targets, andand historically high recovories of wages for workers provide evidence of a solid and successful program design.

Evidence: DOL FY 2003 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) FY 2005 President's Management Agenda; Regulations 29 C.F.R. 541, Final Rule Preamble 69 FR 22122; FY 2006 Annual Performance Plan; FY 2006 Compliance Assistance Plan; FY 2005 WHD Enforcement Statistics (http://www.dol.gov/esa/whd/statistics/200531.htm); Also in FY 2005, the Department issued a final rule implementing the Wage Determinations OnLine (WDOL) Internet website, which updates existing regulations to provide contracting agencies a streamlined method for requesting and obtaining, through the Internet website, appropriate prevailing wage determinations pursuant to the Service Contract Act (SCA) or the Davis Bacon Act (DBA) (http://www.dol.gov/esa/regs/fedreg/final/2005016779.htm)

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The original intent of the labor standards statutes was to provide protections to workers. The FLSA minimum wage provisions and the prevailing wage laws are designed to provide a floor under wages and to level the playing field among U.S. employers. The FLSA overtime provisions were intended to broaden work opportunities and promote employment. The MSPA and immigration programs establish working conditions that are intended to both protect vulnerable workers and ensure that the local labor force is not displaced by foreign labor. The FMLA was designed to help workers balance family and work, and the child labor provisions of the FLSA ensure the safe employment of young workers and encourage their education. Although they vary in specifics, all of the statutes enforced by WHD are intended in some fashion to protect the health and welfare of the nation's workforce and to ensure fair compensation for work performed. WHD has organized its statutory enforcement responsibilities to maximize benefits to the most vulnerable in the workforce - low-wage workers, immigrants, young workers, the working poor. Some of the most vulnerable employees protected by the laws that WHD enforces are immigrants working in low-wage high-violation industries. To ensure the greatest benefit to those workers who most need WHD intervention, WHD has targeted its enforcement and compliance resources in three key areas: directed investigations in low-wage high-violation industries that employ vulnerable workers (including young and immigrant workers); investigations and appropriated penalties for employers with repeat violations; and complaint investigations strategically resolved to increase compliance outcomes for the greatest number of workers. In FY 2005, WHD recovered more than $166 million in back wages for over 241,000 employees. Back wage collections in FY 2005 represent a 26 percent increase over back wages collected in fiscal year 2001. The number of workers receiving back wages has increased by 11 percent since fiscal year 2001. The agency concluded 34,858 compliance actions in fiscal year 2005 and assessed over $10.5 million in civil money penalties. More than 219,000 employees received a total of $134.2 million in minimum wage and overtime back wages in FY 2005 as a result of FLSA violations. WHD collected nearly $119.4 million in back wages for FLSA overtime violations and more than $14.8 million for FLSA minimum wage violations. Also, in fiscal year 2005, the agency collected nearly $45.8 million in back wages for 96,511 workers in low-wage industries - an increase of over 13 percent of low-wage workers receiving back wages in fiscal year 2004. Over a third of WHD enforcement resources are attributed to investigations in nine low-wage industries, which include day care, restaurants, janitorial services and temporary help. On average 3.3 minors were found illegally employed per case compared to 3.6 in fiscal year 2004. Hazardous Occupation Order (HO) violations were found in a third of the cases with violations. The most recent investigation-based surveys of child labor compliance, conducted in fiscal year 2004, show continued high levels of compliance in the full-service restaurant and grocery store industries and improvements in compliance in quick-service restaurants. In fiscal year 2005, WHD collected just over $1.8 million in back wages for violations of FMLA.

Evidence: DOL FY 2006 Budget Overview (http://www.dol.gov/_sec/Budget2006/overview-toc.htm) DOL FY 2007 Budget Overview (http://www.dol.gov/_sec/Budget2007/overview-toc.htm) DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) WHD FY 2006 Annual Performance Plan DOL FY 2005 Annual Report (http://www.dol.gov/_sec/media/reports/annual2005/) WHD FY 2005 Statistics Fact Sheet (http://www.dol.gov/esa/whd/statistics/200531.htm)

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Yes. WHD has specific long-term outcome goals for its three core enforcement priorities: greater compliance in low-wage industries that employ vulnerable workers (including young and immigrant workers); fewer employers with repeat violations; and the strategic use of complaint investigations to increase labor standards outcomes for the greatest number of workers. Each of these three outcomes supports the agency's mission to "promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce." Outcome Goals:  Complaint Resolution: Promote compliance by maximizing benefits the impact of complaint cases;  Employer Recidivism: Increase the level of employer compliance following a WHD;  Low-Wage Industry, Including Youth Employment, Compliance: Increase compliance in low-wage Long-Term Performance Measures:  Complaint Resolution: Number of workers for whom there is an agreement to pay back wages or an agreement to remedy a violation per 1,000 enforcement hours;  Employer Recidivism: Percent of prior violators who achieved and maintained FLSA compliance following a full FLSA investigation;  Low-Wage Industry, Including Youth Employment, Compliance: Percent of low-wage workers across identified low-wage industries paid and employed in compliance with the FLSA. The complaint resolution goal is measured by determining the number of workers that WHD helps in resolving complaint cases for every 1,000 enforcement hours expended. This efficiency measure drives the agency towards full and complete investigations that ensure employers are fully compliant with all laws the agency enforces and that remedies are pursued for all affected employees. Complaint investigations provide WHD with the opportunity to change the behavior of individual employers and promote long-term compliance. The recidivism goal is measured through the reinvestigation of a statistical sample of prior FLSA violators. (FLSA compliance actions represent approximately 83% of the agency's enforcement actions.) This sample, which is representative of the population of prior FLSA violators, allows the agency to access whether prior violators achieve and maintain substantial compliance with the FLSA following a full investigation. The agency's continued focus on ensuring long-term compliance drives quality and efficiency in use of the agency's investigative resources. The low-wage industry compliance goal has traditionally been measured by conducting statistical investigation-based compliance surveys within individual low-wage industries (garment manufacturing, health care, agriculture, restaurants and grocery stores). This year, WHD is establishing a baseline of compliance across a broad spectrum of low-wage industries that - based on an evaluation of external data - are likely to have minimum wage and overtime violations that impact large numbers of low-wage workers. This compliance survey will provide the baseline from which changes in industry behavior can be assessed over the long-term and will inform the agency on the nature and patterns of non-compliance behavior from which strategies for improving compliance can be designed and implemented during the intervening years between surveys. Other long-term goals establish priorities for WHD's wage determination functions and regulatory responsibilities.

Evidence: DOL FY 2003 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2005 Annual Report (http://www.dol.gov/_sec/media/reports/annual2005/) WHD FY 2003 - 2006 Annual Performance Plans WHD 1992-1997 Strategic Plan WHD 1998-2003 Strategic Plan DOL 2003-2008 Strategic Plan (http://www.dol.gov/_sec/stratplan/main.htm) 1998 Report on Low-Wage Initiatives 1999-2000 Report on Initiatives

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: In April 2006 the WHD Executive Leadership Team met to establish new long-term targets in concert with the Deaprtment's ongoing efforts to revise the Departmental Strategic objectives to reflect FY2006 and FY2011 objectives. Those long-term targets are ste out in WHD's FY 2007 Annual Performance Plan and will be incorporated into the Department's FY 2006-2012 Strategic Plan. That said, two of the three long-term targets do not yet have reliable baselines. WHD is in the process of establishing these new baselines. Complaint resolution: Promote compliance by maximizing the impact of complaint cases by increasing the number of workers for whom there is an agreement to pay or an agreement to remedy a violation in a complaint case per 1,000 enforcement hours. Because of modifications to the agency's back wage distribution system, WHD expects that the FY 2006 results will be below the FY 2005 result. Therefore, the baseline will be established in Fy 2006 and annual targets established thereafter. Employer Recidivisim: Increase the level of employers' compliance following a WHD enforcement action by increasing the percent of prior violators who acheived and maintained FLSA compliance following a full FLSA investigation. Given the challenge of meeting or exceeding the targets established for this measure, WHD expects to maintain 75% compliance rates for prior FLSA violators. If successful, WHD will shift to measuring improvements in the severity of recidivist employer violations. Low-wage industry, inclduing youth employment, compliance: Increase complaince in low-wage industries by increasing the percentage of low-wage workers across various identified low-wage industries employed and paid in compliance with FLSA. In the past, long-term targets were established for three key low-wage industries (garment manufacturing, long-term healthcare, and agriculture). However, WHD has expanded its focus to a broader group group oflow-wage industries . The agency is developing a baseline of the "percent of low-wage workers across various identified industries employed and paid in compliance with FLSA." Long-term targets will be established in FY 2006.

Evidence: DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2003 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) WHD 1992-1997 Strategic Plan WHD 1998-2003 Strategic Plan DOL 2003-2008 Strategic Plan (http://www.dol.gov/_sec/stratplan/main.htm) WHD Annual Performance Plans and Reports, FY 2003-2006;

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: WHD has annual performance measures for its three enforcement outcome goals. Annual performance measures for the complaint resolution and recidivism goals are annual targets that track the agency's process towards its long-term targets. The agency measures its annual progress toward maximizing the impact of complaint investigations by determining the number of workers that WHD helps in resolving complaint cases for every 1,000 enforcement hours expended each fiscal year. Annual progress in meeting the recidivism goal is measured through the reinvestigation of a statistical sample of prior FLSA violators each year. Annual performance measures for the low-wage industry goals involve either the results of investigation-based compliance surveys for those industries, including for child labor; data from the agency's enforcement database (Wage and Hour Investigator Support and Reporting Database - WHISARD); or results from local low-wage and child labor initiatives. Based on the preliminary results of the ongoing compliance survey, WHD will establish new annual performance targets in April 2006. For each outcome, WHD also develops additional auxiliary annual performance measures to maintain balance among the agency's program objectives and to ensure that tendencies towards unintended organization behavior are monitored. These established measures have a proven impact and are directly tied to the agency's outcome goals and mission. For example, using an efficiency measure for its complaint resolution goal clearly demonstrates the agency's impact on workers who may be subject to a violation. The determination of employer recidivism allows the agency to assess its impact on individual employer compliance. And, in determining the percent of low-wage workers paid or employed in compliance with the FLSA, including child labor, and the amount of back wages due these low-wage workers, WHD can demonstrate progress towards increasing compliance in low-wage industries and enhancing and protecting the welfare of the Nation's low-wage workers. WHD has two related efficiency measures: number of low-wage workers helped by WHD for every 1,000 enforcement hours expended and number of workers helped by WHD for every 1,000 enforcement hours expended in complaint investigations.

Evidence: DOL FY 2003 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2005 Annual Report (http://www.dol.gov/_sec/media/reports/annual2005/) WHD FY 2003 - 2006 Annual Performance Plans DOL 2003-2008 Strategic Plan (http://www.dol.gov/_sec/stratplan/main.htm) 1998 Report on Low-Wage Initiatives 1999-2000 Report on Initiatives Additional Annual Performance Measures: ?? Average number of days for WHD to conclude a violation complaint (excluding conciliations) ?? Number of workers for whom there is an agreement to pay or an agreement to remedy in a complaint case (per 1,000 enforcement hours) ?? Percent of no violation complaint investigations (excluding conciliations) ?? Percent of conciliations concluded within 15 days of registration ?? Number of employees paid or employed in violation during profile pay period per 100 employees ?? Percent of repeat violators with identical violations ?? Percent of reinvestigations with identical violations ?? Average amount of back wages due per employee per week ?? Percent of prior violators who achieve and maintain substantial FLSA compliance following a full FLSA investigation ?? The percent of low-wage workers across various identified low-wage industries employed and paid in compliance with FLSA ?? Percent of low-wage workers across various identified low-wage industries employed and paid in compliance with FLSA ?? Number of low-wage workers for which WHD obtained an agreement to pay or an agreement to remedy for FLSA or CL violations per 1,000 enforcement hours ?? Percent of employers in various identified low-wage industries who pay their employees in compliance ?? Average back wages due low-wage workers across various identified low-wage industries ?? The number and percent of youth employed in compliance with Hazardous Occupations Orders (HO) 2, 7, 10, 11 and 12 and Reg. 3 occupations standards in defined large discount stores ?? Percent of agricultural workers housed or transported in violation on the day of the site visit where the employer or housing provider agrees to remedy ?? Number of employers with MSPA Disclosure, Wages Housing and/or Transportation (DWHaT) violations

Does the program have baselines and ambitious targets for its annual measures?

Explanation: For the key annual measures in complaint resolution, employer recidivism and low-wage industry compliance, WHD has either previously established baselines or is developing baselines in FY 2006 from which annual targets will be established in FY 2007. Targets are established based on analysis of historical data, anecdotal evidence and statistically valid surveys in the agency's Annual Performance Plan Meeting of the Executive Leadership Team (ELT) held each spring. The ELT evaluates the targets each year in light of the prior years' performance. Where WHD has not met annual targets or greatly exceeds the targets, the ELT analyzes the contributing factors and makes adjustments to the targets or goals accordingly. Annual Targets for FY2006 ?? Ensuring continued customer service by decreasing the average number of days to conclude a violation complaint. Baseline FY 2004: 189 Target: 185 ?? Reducing employer recidivism by increasing the percent of prior violators who achieved and maintained Fair Labor Standards Act (FLSA) compliance following a full FLSA investigation. Baseline FY 2004: 71% Target: 73% ?? Increase compliance in industries with chronic violations by increasing the percent of low-wage workers across identified low-wage industries paid and employed in compliance with FLSA and MSPA. Baseline: Establish in FY 2005 Target: TBD Annual Targets for FY 2007 ?? Maximizing the impact of complaint investigations by increasing the number of workers for whom there is an agreement to pay or an agreement to remedy per 1,000 enforcement hours Baseline: FY 2006 Target: TBD ?? Reducing employer recidivism by increasing the percent of prior violators who achieved and maintained Fair Labor Standards Act (FLSA) compliance following a full FLSA investigation Baseline: (FY 2004) 71% Target: 74% ?? Increasing compliance in low-wage industries by increasing the percent of low-wage workers across identified low-wage industries paid and employed in compliance with FLSA Baseline: FY 2006 Target: TBD Baselines and annual targets for many of the agency's auxiliary annual measures are also established.

Evidence: DOL FY 2003 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2005 Annual Report (http://www.dol.gov/_sec/media/reports/annual2005/) WHD FY 2003 - 2006 Annual Performance Plans DOL 2003-2008 Strategic Plan (http://www.dol.gov/_sec/stratplan/main.htm) 1998 Report on Low-Wage Initiatives 1999-2000 Report on Initiatives

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: WHD is a law enforcement agency with sole responsibility for employer compliance with the Acts that it enforces with the exception of the Davis-Bacon Act. To this end, WHD does not have grant authority or cost-sharing partners. The agency's contracts are primarily IT contracts related to the agency's investigative or financial databases, and unlike with OSHA, WHD's relationships with the States are all designed to avoid overlap in enforcement responsibilities or to promote collaboration on compliance assistance. WHD does have active compliance partnerships as part of its compliance assistance efforts. These partnerships are voluntary in nature and are dependant on the willingness of business associations, employers, worker advocacy groups, faith-based organization and States to work cooperatively with WHD towards common goals. Since the partnerships are neither mandated nor constitute formal program partnerships, there is little, if any, justification or legal basis for requiring partners to measure and report on their performance as it relates to accomplishing the program's goal. Given these limitations, WHD district offices do track activities related to formal partnership programs and their impacts and outputs are reported to WHD's national office at least semi-annually. These efforts, though, are not systematic in nature. While WHD cannot require partnerhsips to explicitly work towards or collect regarding WHD goals, WHD could institute a more formal process by which it solicits and choses partnerships based upon their ability and willingness, although not statutorily required, to commit to and work toward the goals of the program.

Evidence: WHD FY 2003 - 2006 Compliance Assistance Plans Partnership and collaborative agreements examples

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: WHD regularly undergoes unbiased, high-quality program evaluations. Since 2000, the Government Accountability Office and DOL Inspector General have conducted audits and evaluations of WHD's overall program and procedural effectiveness and offered recommendations to improve performance. WHD has responded to all review findings and implemented recommendations, as appropriate; some recommendations have been implemented during the planning process. Additionally, several independent contractors have conducted thorough reviews of WHD's program since 2003. Collectively, these efforts assess WHD's operation in its entirety, including the priorities set forth in our Annual Plan. While each individual strategy may not be formally evaluated (e.g. voluntary partnerships), the conduct of regular compliance evaluations suggest the impact of such strategies. Recent studies include evaluations of WHD's targeting of low-wage industries, analyzing business structure (complaint vs. directed); compliance assistance strategies (including materials, seminars and website); strategies to reduce recidivism; impact on industry compliance; proposed regulatory changes; and performance measures. Additional evaluations examining WHD's efficiency; targeting and recidivism are scheduled for this fiscal year. While evaluation methods vary for different projects, all methods have sufficiently enabled contractors and government agencies to evaluate WHD's impact, processes and outcomes, and to make recommendations based on findings. Independent contractors have completed quasi-experimental and non-experimental evaluations, utilizing statistically valid surveys, document review, anecdotal evidence and interviews. CPPR's selection and monitoring of contracts and contractors assured independence in the conduct of evaluations, while review and approval of workplans contributed to the assurance of quality. The GAO and OIG apply similar methods, and ensure that generally accepted government auditing standards are adhered to during the conduct of evaluations and reviews. These external agencies are governed by legislation that ensures independence and non-bias. As apparent through review of WHD's FY 2005 and 2006 Annual Performance Plans, the Agency has implemented a number of recommendations resulting from independent evaluations, including a cost accounting management system and strategies for use in the low-wage program. WHD has also taken action in response to recommendations made by the GAO and OIG (see supplemental submission).

Evidence: WHD FY 2005 and 2006 Annual Performance Plans DOL CPPR Independent Evaluation Summaries FY 03-05 OIG Report Nos. 05-01-002-04-420, March 19, 2001; 2E-04-420-0001, August 23, 2002; 23-05-009-04-001, September 30, 2005; 04-06-001-04-420, October 2005; OIG Audit of Wage and Hour Division's Performance Measures, April 22, 2003 and in each subsequent year GAO-01-886 September 2001, September 4, 2001 GAO 02-925, September 2002 GAO-02-880, October 4, 2002 GAO-06-27, December 2005 GAO-04-735R, May 5, 2004 GAO-05-58R, June 3, 2005 WHD Supplemental: Independent Evaluations

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: WHD's budget request supports the Department's goals and the Agency's long-term outcome goals. By 2005, WHD's budget request fully allocated resources among the agency's five key outcome goals. WHD directs approximately 60 percent of its resources toward its complaint resolution outcome. Approximately 18 percent of resources are directed toward increasing compliance in low-wage industries. Additionally, nearly 13 percent of these funds are allocated towards reducing recidivism. The balance of resources is allocated to the agency's wage determination responsibilities (8 percent) and its regulatory outcome goal (1 percent). WHD has developed a performance integration model that demonstrates the relationship between the agency's annual performance plan and budget. Staff hours - currently tracked for WHD field staff in various permutations - provide the initial basis for estimating costs by program area and agency goal. As a result, WHD has successfully aligned all costs with performance goals and indicators for FY2005 and FY2006. WHD performance goals are outcome-based, and WHD's budget activity is differentiated by performance goal. In its budget documents, WHD estimates annual outputs -aligned with outcome goals - for the varying budget levels. In 2004, an independent contractor, ICF Consulting, found that "the Wage and Hour Division is in the early stages of a successful budget and performance integration effort and that the basic processes used by the WHD budget and performance integration model are appropriate, given the constraints under which they operate." ICF Consulting found that WHD's budget and performance integration model uses "actual data to integrate and allocate budget requests and actual expenditures to the Wage and Hour Division's performance plan. In its current form, the WHD budget and performance integration model ?? does align WHD resources expended with the budget" WHD has also successfully implemented DOL's Cost Accounting Manager (CAM). Managerial cost accounting, when fully implement at the district office level will used as a tool to help WHD managers establish and demonstrate the accountability of federal funding, to improve the management and performance of WHD programs, and to reduce the costs of such programs. CAM provides information on costs by object of expenditure (compensation, benefits, space rent, etc.), by WHD output - which is aligned with the agency's strategic outcomes, and by cost center or aggregated cost centers (nationwide, by region, national office, or by district office). CAM provides output unit costs for WHD's critical outputs. WHD will be using this information to view the operational costs across programs to ensure personnel are focused on the appropriate mix of activities to support performance goals. The information also provides a mechanism to associate outputs with strategic goals to provide the costs incurred in support of each goal. With time and additional data, cost information from CAM will support budgeting decisions when estimating or allocating resources for new or expanding programs or to reallocate resources for changing workload in existing programs and will be used to compare actual costs to estimated costs. WHD is continuing its work with the Department on this initiative. Finally, WHD has developed a model to allocate regional resources based on regional performance against a set of defined metrics that support the performance plan objectives. All direct and indirect costs needed to achieve desired performance results are indicated in the Agency's budget.

Evidence: ICF Final Report DOL FY 2005 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ WHD FY 2005 and 2006 Annual Performance Plans FY 2005 Budget Performance Integration Scorecard results

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: WHD has applied knowledge learned from past experience and best practices to develop and implement a successful strategic planning model. WHD regularly reviews its long-term and annual measures to ensure consistency with the Agency's mission. WHD's strategic planning model - consisting of planning, validation, implementation, analysis and review - guides the development of long-term and annual performance goals and measures. WHD's Executive Team reviews analysis of prior year results to identify priority areas. Local offices then determine available resources and develop initiatives to address the Agency's priority areas. All local plans are reviewed and approved at the National and Regional levels to ensure they employ complementing strategies, have ambitious, yet achievable targets and timelines, and contribute to the success of WHD's Performance Plan. Local plans that are found to not meet these criteria are corrected or rejected. WHD continuously monitors its planning cycle and, when appropriate, identifies areas of improvement. For example, WHD initially focused its complaint goal on ensuring customer satisfaction by reducing or maintaining the average number of days in which to conclude a complaint investigation. Following success in decreasing the number of days to resolve a complaint, WHD reexamined the objective. WHD's ultimate performance objective is to achieve compliance on behalf of the greatest number of workers. To avoid sacrificing investigation quality (and long-term compliance) for faster case resolution, WHD established a revised target to reduce the number of days to resolve a violation complaint. WHD was successful in decreasing the average number of days to resolve a violation complaint from 189 days in FY 2004 to 178 days in FY 2005. In FY 2007, WHD will seek to increase the number of workers that WHD assisted through the resolution of complaint cases per every 1,000 hours expended. The evolution of WHD complaint priorities - from a customer satisfaction focus to an efficiency focus demonstrates a continued refinement of the agency targets as earlier targets are reached and new ones established. In another example, WHD previously measured its progress in increasing compliance in low-wage industries with chronic violations by tracking and reporting on compliance levels in three nationally-targeted industries: garment manufacturing, health care and agriculture. While efforts continue in those identified industries, in FY 2004, WHD began expanding its targeted efforts on behalf of low-wage workers in various identified low-wage industries. This expansion will enable WHD to employ a cross-industries strategy where violation patterns and causes are similar. In FY 2006, WHD will undertake its first investigation-based compliance survey in a cross section of low-wage industries. This survey will provide WHD with a baseline measure of the percent of low-wage workers employed in compliance with the FLSA. Future performance targets and measures of improvements in the percent of low-wage employees employed and paid in compliance will be determined in relation to the information obtained from the survey. Similar modifications were made to WHD's youth employment goals after a 2004 survey found relatively high compliance in the restaurant and grocery store industries where youth are most likely to be employed. WHD now targets industries in which there is a high likelihood of hazardous occupation violations. WHD has also applied findings reported from independent evaluators, as evidenced by the Agency's decision to broaden the list of low-wage industries on which to focus National and local directed initiatives. Additionally, in FY 2006, WHD contracted with an independent evaluator to assess current efficiency measures and suggest alternative measures. Findings will be incorporated into WHD's FY 2008 Annual Performance Plan.

Evidence: WHD FY 2001 - 2006 Annual Performance Plans DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) WHD Strategic Planning Model

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: The labor standards administered by WHD establish wages and working conditions and are consistent with the Department of Labor's outcome goal, "to promote workplace flexibility and minimize regulatory burden." WHD comprehensively reviews its existing regulations to identify opportunities to replace outdated or unnecessarily burdensome regulations with more protective regulations. In reaching its regulatory decisions, WHD is mindful of its obligations under the delegated statutory authority and Executive Orders that apply to the regulatory process (e.g., the Paperwork Reduction Act, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, and Executive Orders 12866, 13272, and 13132). The Agency makes sure that currently applicable guidelines, implementation of regulatory standards should, to the maximum extent possible within the limits of controlling statutory authority and intent, strike an appropriate balance and be compatible with existing recordkeeping and other prudent business practices, not unduly disruptive of them. These regulations strive to apply plain, coherent, and unambiguous terminology that is easily understandable to everyone affected by the rules. In addition, WHD bi-annually reviews all its upcoming regulations for the coming year as part of the Regulatory Agenda/Plan process. For example, in August 2004, WHD updated the regulations defining and delimiting the exemptions for "``white collar"'' executive, administrative and professional employees. The prior regulations were very difficult for the average worker or small business owner to understand. These confusing, complex and outdated regulations allowed unscrupulous employers to avoid their overtime obligations and had served as a trap for the unwary but well-intentioned employer. In December 2004, the Department issued a final rule as an important and necessary step in its ongoing review of the criteria for permissible child labor employment, a review which strives to balance the potential benefits of transitional, staged employment opportunities for youth with the necessary protections for their education, health and safety. The rule revised the child labor regulations in order to implement two amendments of the Fair Labor Standards Act's child labor standards--the Compactors and Balers Safety Standards Modernization Act, (August 6, 1996) (The Compactor and Baler Act); and the Drive for Teen Employment Act, (October 31, 1998). The final rule also revised procedural regulations dealing with administrative hearings and appeals of civil money penalties. In August 2005, WHD updated the regulations to allow contracting agencies to request and obtain wage determinations through online services provided by Hwww.wdol.govH. The website WDOL includes guidance for contracting agencies on how to select the appropriate wage determination for each contract action and provides access to the most current wage determinations and to databases that contain archived wage determinations under both the Service Contract Act (SCA) and the Davis Bacon Act (DBA.). This technological improvement was honored as a finalist for one of the 2005 Intergovernmental Solutions Awards presented by the American Council for Technology. WHD also plans on publishing a proposed rule in response to a March 2002 U.S. Supreme Court decision in Ragsdale v. Wolverine World Wide, Inc., 122 S. Ct. 1155 (2002). In that decision, the Court invalidated regulatory provisions pertaining to the effects of an employer's failure to timely designate leave that is taken by an employee as being covered by the FMLA. This proposed rule is being prepared to address issues raised by this and other judicial decisions.

Evidence: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, Final Rule Preamble 69 FR 22122 Child Labor final rule, preamble 69 FR 75382 WDOL final rule, preamble 70 FR 50888 Fall 2005 Regulatory Agenda and Plan

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: WHD collects volumes of data on a variety of agency activities, including agency outputs and outcomes measures. The agency uses this data to monitor and manage agency performance against its targets. Additionally, WHD uses the results of independent evaluations to help establish or refine WHD priorities and goals and to assist in developing compliance strategies. For example, WHD has refined its complaint resolution goal following analyses of the agency's performance in resolving complaint investigations. In another example, WHD's low-wage goals are based on analysis of WHD's history of violations, workforce demographics and external data analyses of industries in which there are likely to be minimum wage and overtime violations affecting large numbers of low-wage workers. The majority of WHD performance data is generated from the Wage and Hour Investigative Support and Reporting Database (WHISARD). WHISARD is an on-line transactional system for real-time data entry and case management. This system maintains data on the labor standards enforcement, case management, compliance assistance, civil money penalty assessment, and back wage collection and distribution responsibilities of WHD. Data validity studies on the WHISARD database demonstrate high reliability and have been accepted by OIG and GAO. Additional data on regional and local performance are reported to the WHD national office and analyzed semi-annually for patterns and trends. Data from investigation-based compliance surveys are validated by the University of Tennessee and then analyzed for trends and for the effectiveness of compliance strategies. For performance data that is not generated by WHISARD, the information is collected from investigators, regional management and national office staff through various reporting tools like the PARR forms and weekly activities. For WHD initiatives that involve partners, regular monitoring and reporting by key partners ensures initiatives remain on target and provide expected results Each year, the agency develops a compliance assistance plan to ensure continued improvement and monitoring of compliance assistance tools, such as the Agency's website, toll-free hotline, publications, and seminars. The compliance assistance plan and scorecard enables the agency to evaluate past performance and establish significant targets for compliance assistance activities and materials. WHD is required to collect information on its compliance assistance goals, and report performance information periodically to the Department. WHD reports quarterly on its Government and Performance Results Act (GPRA) targets and goals to ensure that the Agency is on target. Agency outputs and outcomes are monitored using quarterly WHISARD reports and other data sources described above. These results are shared with the WHD Executive Leadership Team (ELT) each quarter. If interim data indicate that WHD may not achieve its targets, WHD's ELT evaluates the need to shift resources and priorities. WHD also uses semi-annual reports on the national and local initiatives during the agency strategic planning process to establish national, regional and local initiatives in the subsequent year(s) (i.e., the review step of WHD's Strategic Planning Model). In the spring of each year, the ELT analyzes performance data to inform decisions and establish national priorities for the upcoming year.

Evidence: FY 2005 DOL WHD Compliance Assistance Scorecard FY 2006 WHD Compliance Assistance Plan

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: In WHD performance standards for all staff (100%) are linked to the agency mission. The federal managers responsible for different aspects of the program are identified in its internal organizational chart. Regional management is held accountable for regional discretionary budgets. DOL ties performance ratings for managers and supervisors to the achievement of Departmental and program-specific goals and outcomes. As a consequence, employees' performance ratings are aligned on a fiscal year cycle to help cascade standards to non-supervisory personnel. Pursuant to Departmental policy, all WHD personnel in the Senior Executive Service are measured against organizational and Departmental goals. WHD does not have grantee or cost-sharing partners. The agency does enter into compliance assistance partnerships for which partners are also held accountable for their agreed upon performance. Prior to establishing a formal partnership, WHD prepares a partnership agreement delineating partners' roles and responsibilities. Performance is continuously monitored and formally reported to WHD's national office at least semi-annually. For example, WHD continues to monitor its compliance agreement with Labor Ready, a company that provides short-term temporary laborers to 300,000 customers. The agreement explicitly lists all Labor Ready's commitments to provide compliance assistance and training to its employees, monitor and report to WHD compliance with the FLSA, and establish a process for receiving and resolving employee complaints alleging violations of the FLSA. Contractor staff is likewise held accountable for contract performance. In this regard, WHD has established a Project Management Office (PMO), comprised of IT Project Managers and contract staff. This PMO ensures the effective use of professional IT resources contracted to provide continued development and maintenance of software applications in support of WHD enforcement, fiscal and reporting responsibilities.

Evidence: Revised Performance Management Plans for Senior Executives (Form DL 1-2059, Rev. 10/2001) and for Supervisors and Managers (Form DL 1-382, Rev. 10/2001) ESA Human Capital Scorecard Sample WHD Performance Standards WHD Organizational Chart Agreement with Labor Ready, Inc.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: WHD establishes an annual operating budget that lays out projections for employee compensation and benefits, travel, space rental, contracts and other operational needs. The agency allocates regional discretionary funds through a model that is based in part on a per capita allocation and in the other part on regional performance against the agency's key performance metrics. WHD uses reports provided through the Department's accounting system (Detail Fund) to monitor and track expenditures. Each of WHD's regions receives a monthly reports on their funds obligated. The agency reviews these obligations and outlays monthly. Agency managers use the monthly reports to monitor their spending. The agency generally has accurate projection of end-of-year balances. There are no outstanding audit findings. There have been no ADA violations.

Evidence: DOL Annual Financial Statement OIG Fiscal Audit

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: WHD has two OMB-approved efficiency measures that track the cost (in terms of enforcement hours) for achieving program efficiencies. Those measures are: ?? The number of workers assisted by WHD per 1,000 enforcement hours expended in complaint cases; and, ?? The number of low-wage workers assisted by WHD per 1,000 enforcement hours expended. Using these measures and converting hours to dollars enables WHD to assess the cost of securing back wages or other remedies for workers. In addition, WHD has updated its unit cost estimates through CAM using FY 2005 output and expenditure data. The agency is integrating CAM unit costs into its allocation of regional resources. WHD has developed a model to allocate regional resources based on regional performance against defined efficiency metrics that support the performance plan objectives. The model was utilized in FY 2005 and 2006 allocations. As a means of determining the cost effectiveness of achieving Wage and Hour performance goals, a charge code system is used to track and allocate all contract labor costs related to the development and maintenance of IT projects. In FY 2006, WHD is implementing new IT systems designed to increase efficiencies and productivity in its programs consistent with the Department's Enterprise Architecture initiative. These IT improvements, examples of which include moving from an Informix database to DB2 and implementation of a Citrix terminal server will improve communication between field staff and facilitate the deployment of software. Increased responsiveness of the IT systems facilitates cases management and reduces data entry time, which in turn provides the foundation for greater accuracy, efficiency, and timeliness in investigations. WHD has completed preliminary planning for the streamlined A-76 competition of its national certification functions. The public announcement of this competition will be made on March 30, 2006. WHD is also participating in the Department-wide enterprise-wide standard competition of other non-manufacturing operations. WHD has 66 FTE (total of full- and part-time) support staff, program and IT specialists in 17 states and the national office which are being studied for this department-wide competition.

Evidence: FY 2005 ESA PMA Scorecard WHD FY 2005 - 2006 Annual Performance Plans DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2005 Annual Report (http://www.dol.gov/dol/aboutdol/main.htm)

Does the program collaborate and coordinate effectively with related programs?

Explanation: Collaborative partnerships and relationships play a significant role in WHD's multi-pronged strategy to achieve compliance with labor standard statutes. WHD collaborates with other Federal and State agencies, community-and faith-based organizations, employer associations and other stakeholders in order to leverage resources and expand the impact of its compliance activities. WHD has also partnered with organizations to address recent areas of concern, such as in anti-human trafficking task forces that serve the same population of low-wage immigrant workers. WHD's core partnership programs center on the growing immigrant workforce and low-wage industries in general. WHD recognizes that to most efficiently leverage its resources and expertise, the agency must continue to form strategic partnerships with organizations that have the trust and attention of their constituents and the distribution resources to reach them. On a national level, WHD is involved in collaborative relationships to reinforce employment standards among a broad range of workers, including immigrant workers, workers in the agricultural industry, and youth workers. WHD has developed relationships with the 45 Mexican Consulates and through these relationships participates in joint activities to further the spirit and provisions of the July 2004 Agreement. WHD continues to enter into several new alliances with the Mexican consulates to institutionalize these relationships. One such program, WHD's Las Vegas EMPLEO (Employment Education Outreach Program) initiative was recently named by Harvard University's Kennedy School of Government as one of the top 50 Innovations in Government in FY2006. In FY 2005, WHD received approximately 433 EMPLEO referred calls, producing over 40 new cases. In addition to these collaborative partnerships, DOL has established another national effort, the YouthRules! campaign, to increase public awareness of resources and protections for working teens. YouthRules! partners include businesses, advocacy groups, all levels of government, unions, and other organizations. Because collaborative partnerships are essential to WHD's success, the agency also allocates resources to encourage the development and maintenance of local partnerships to bring together other Federal agencies, State agencies, community organizations, employer associations and others toward a common goal of increased compliance. In FY 2006, WHD has over 40 local initiatives that involve partnerships of this nature.

Evidence: WHD FY 2003 - 2006 Compliance Assistance Plan WHD Memoranda of Understanding (INS, OSHA, FBI) YouthRules! Partners (Hhttp://www.youthrules.dol.gov/partners.htmH); FEDNET (Hhttp://www.cdc.gov/niosh/fedNet/H) WHD List of Trafficking Task Forces

Does the program use strong financial management practices?

Explanation: There have been no material control weaknesses reported by auditors. WHD closely monitors financial management systems at the DOL and Agency level and report monthly to executive staff. In the 1990's, as various laws, regulations and requirements concerning financial management systems went into effect, including the creation of a CFO in every Federal agency, WHD's financial management systems at that time??the Back Wage Collection and Disbursement System (BCDS) and Civil Money Penalty System (CMP)??became subject to increasing oversight by the Office of the CFO and the OIG. Beginning with the 1997 OIG Annual Financial Management Audit, the OIG made a series of recommendations with regard to both systems. In the FY 2000 audit, as a result of system improvements and increased oversight and review by WHD management, a number of recommendations were changed from unresolved to resolved and open. In the FY 2001 audit, the OIG closed several recommendations with the remainder remaining unresolved and open pending findings in the FY 2002 audit. The most important result of the FY 2001 audit, the findings of which were published in FY 2002, was a finding by the OIG that WHD's systems were in substantial compliance with the Federal Financial Management Integrity Act (FFMIA). In the FY 2001 OIG Audit, the 1997 FFMIA finding was eliminated, and WHD was left with only one unresolved and five resolved and open findings. The unresolved finding was on Debt Collection for the Back Wage system. In the first part of FY 2002, over $750,000 were transferred for Debt Collection action by the Treasury, and the item was closed as part of the FY 2002 Audit along with all the resolved and open findings. The WHD financial systems have been audited every year, and WHD has received no reportable findings since the 2001 audit. Any issues that have arisen during the audits have been resolved immediately eliminating the need for either an FFMIA or a Management Letter level finding. WHD expects continued compliance with FFMIA and FMFIA with audits showing no material weaknesses. In FY 2005, WHD substantially upgraded its Back Wage Financial System to ensure continued compliance.

Evidence: DOL OIG audit findings from FY 2001 WHD Response to preliminary Statement of Facts in FY 2003.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: WHD has a system in place to identify and correct management deficiencies. WHD leadership conducts weekly meetings to identify and address deficiencies. The ELT also meets quarterly to review and modify policy if necessary. Also, the Department of Labor has tied its performance goals to performance ratings for managers. WHD has established efficiency measures as early indicators of management deficiencies. The WHD's national office is responsible for maintaining and coordinating an accountability review system in all five WHD regions. As part of this system, case files of investigations conducted by WHD district offices are reviewed for adherence to established policies and procedures, and to ensure uniform application of the law. In response to OIG audits, WHD resolved and implemented recommendations made by the OIG regarding the BCDS (back-wage collection and disbursement) system. The BCDS system was re-engineered and recently deployed as the Back Wage Financial System (BWFS). BWFS incorporates within its system all of the functional requirements needed to address OIG recommendations for efficient and secure transactional processing. In FY 2005 the Civil Money Penalties System (CMP-2001) had a Federal Information Security Management Act (FISMA) audit performed by the OIG. As part of the OIG review five positive security controls were identified. WHD (along with ESA who controls the infrastructure the CMP system resides on) received one high risk and three medium risk findings. Plans for resolving those findings were submitted to the OIG and are in the process of being implemented. All of the risks have either been addressed or included on the Plan of Actions and Milestones (POA&M) for resolution. The POA&M serves as the process by which security risks are scheduled and tracked by the OCIO and OMB to ensure the timely resolution of all security issues. In response to GAO recommendations in its review of Service Contract Act enforcement, WHD is implementing changes to its SCA poster, SCA wage determination process and implementing SCA enforcement data in its FY 2007 strategic planning process. Following the OIG's audit of WHD's settlement agreement process, the agency implemented key changes to its settlement agreement processes, thus resolving the OIG recommendations.

Evidence: Revised DOL performance management plans for senior executives (Form DL1-2059, rev. 10/01) and for supervisors & managers (Form DL1-382, rev. 10/01) OIG and GAO audits ESA CMP Final Report to OIG

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: WHD actively solicits the opinions of affected parties on all significant regulations. WHD collaborates with stakeholders, including government, private industry and advocacy groups on program direction and effectiveness. Major regulations have analyzed and responded to comments received. WHD, along with all ESA agencies have, formally incorporated increased collaboration and feedback loops into their outcome goals. A recent example involves changes to the overtime security regulations. Prior to issuing a proposed rule, WHD convened a series of stakeholder meetings, and heard suggestions for changes from over 40 interest groups representing employees and employers. WHD carefully examined issues of concern raised by various interested parties in developing the proposed rule. During a 90-day comment period for the proposed rule, the Department received 75,280 comments from a wide variety of employees, employers, trade and professional associations, small business owners, labor unions, government entities, law firms and others. In addition, the Department's proposal prompted vigorous public policy debate in Congress and the media. The public commentary revealed significant misunderstandings regarding the scope of the ``white collar'' exemptions, but also provided many helpful suggestions for improving the proposed regulations, which were implemented in the final rule. WHD made numerous changes to the rule based upon suggestions, findings and discussion with affected parties. For example, As the Department explained in the preamble to the proposed rule, both proposed section 541.106 and proposed section 541.107 were meant to address the difficult issue of classifying employees who have both exempt supervisory duties and nonexempt duties. WHD invited comments on whether these sections have appropriately distinguished exempt and nonexempt employees. The Department decided to combine proposed sections 541.106 and 541.107 into one section on ``concurrent duties'' in response to a number of comments, including the National Council of Chain Restaurants, indicating that the proposed separate sections were duplicative and not helpful in understanding the distinction between exempt and nonexempt employees. Additionally, after careful consideration of the public comments submitted, the Department agreed that the "position of responsibility" standard in the proposed section 541.202 does little to bring clarity and certainty to the administrative exemption. In the proposal, the Department attempted to articulate a clear, simple, common sense test for exemption, but most commenters believe that we were not fully successful. Further, many commenters believe that the term ``position of responsibility'' greatly expanded the scope of the exemption--a result which the Department did not intend. In addition, the Department agrees with the concerns of the National Association of Manufacturers and other commenters that the "high level of skill or training'' standard is problematic because it is too closely associated with nonexempt "blue collar'' skilled trade occupations. Accordingly, the final rule deletes the proposed "position of responsibility'' requirement and its definition at proposed section 541.202 as ``work of substantial importance'' or "work requiring a high level of skill or training.'' Instead, as the second requirement for the administrative exemption, the final rule reinserts the ``discretion and independent judgment'' requirement, and defines that term at final section 541.202. Furthermore, employers were given 4 months, between the time the final rule was issued and the time WHD began enforcing it, to learn about and come into compliance with the updated exemption rules. During that time, WHD welcomed feedback from all stakeholders.

Evidence: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, Proposed Rule, Preamble 68 FR 15560 and Final Rule Preamble 69 FR 22122

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: In reaching its regulatory decisions, WHD is mindful of its obligations under the delegated statutory authority and Executive Orders that apply to the regulatory process (e.g., the Paperwork Reduction Act, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, and Executive Orders 12866, 13272, and 13132). The agency makes sure that currently applicable guidelines, implementation of regulatory standards should, to the maximum extent possible within the limits of controlling statutory authority and intent, strike an appropriate balance and be compatible with existing recordkeeping and other prudent business practices, not unduly disruptive of them. These regulations strive to apply plain, coherent, and unambiguous terminology that is easily understandable to everyone affected by the rules. In addition, WHD bi-annually reviews all its upcoming regulations for the coming year as part of the Regulatory Agenda/Plan process. For example, in August 2004, WHD updated the regulations defining and delimiting the exemptions for ``white collar'' executive, administrative and professional employees. The recent final rule for revising the FLSA "white collar" exemption was developed in consideration of a full economic impact analysis. Because the rules had not been adjusted in decades, the final rule does impose additional costs on employers. However, updating and clarifying the rule will reduce Part 541 violations and are likely to save businesses at least an additional $252.2 million every year that could be used to create new jobs. In December 2004, the Department issued a final rule as an important and necessary step in its ongoing review of the criteria for permissible child labor employment, a review which strives to balance the potential benefits of transitional, staged employment opportunities for youth with the necessary protections for their education, health and safety. The rule revised the child labor regulations in order to implement two amendments of the Fair Labor Standards Act's child labor standards--the Compactors and Balers Safety Standards Modernization Act, (August 6, 1996) (The Compactor and Baler Act); and the Drive for Teen Employment Act, (October 31, 1998). The final rule also revised procedural regulations dealing with administrative hearings and appeals of civil money penalties. This rule was treated as a significant regulatory action within the meaning of Executive Order 12866 because of its importance to the public and the Department's priorities.

Evidence: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, Final Rule Preamble 69 FR 22122; Child Labor Final Rule, Preamble 69 FR 75382

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: Prior to publishing its final rule revising the FLSA "white collar" exemption, a full cost benefit analysis was completed. WHD considered various feasible alternatives in drafting the overtime security rule as described throughout the preamble of the final rule. The analysis was to determine the impact of setting the overtime exemption at different wage levels. This extensive analysis determined that $455 a week would be the least burdensome option to update, clarify, and simplify the rule. One alternative option would have set the exemptions' salary level at a rate lower than $455 per week, which might impose lower direct payroll costs on employers, but may not necessarily be the most cost-effective or least burdensome alternative for employers. The $455 minimum salary level for exemption is consistent with the Department's historical practice of looking to "points near the lower end of the current range of salaries'" to determine an appropriate salary level. The Department received and analyzed comments from those arguing that it should be a much lower minimum. A salary level of $455 per week represents the lowest 10.2 percent of likely exempt employees in the lower-wage retail industry; the lowest 8.2 percent of likely exempt employees in the South; and the lowest 6.7 percent of all likely exempt employees. The $455 level also represents the lowest 20.0 percent of salaried employees in the retail industry; the lowest 20.2 percent of salaried employees in the South; and the lowest 16.8 percent of all salaried employees. The $455 minimum salary level also automatically excludes 46.4 percent of hourly workers from the exemptions. In addition, based on the comments from the business community, the Department believed the increase is clearly at the upper boundary of what is capable of being absorbed by employers without major disruptions to local labor markets. A lower salary level could result in a less effective "bright-line'" test that separates exempt workers from those nonexempt workers whom Congress intended to cover by the Act. Greater ambiguity regarding who is exempt and nonexempt increases the potential legal liability from unintentionally misclassifying workers, and thus the ultimate cost of the regulation. The economic analysis found in section VI of this preamble concludes that the final rule guarantees overtime protection for all workers earning less than the $455 per week ($23,660 annually), the new minimum salary level required for exemption. Because of the increased salary level, overtime protection will be strengthened for more than 6.7 million salaried workers who earn between the current minimum salary level of $155 per week ($8,060 annually) and the new minimum salary level of $455 per week ($23,660 annually). WHD also published a final rule to clarify and update child labor regulations and reflect changes in the workplace and recent amendments to the law which will eliminate confusion for employers, youths and their parents. WHD determined that this regulation was not economically significant as defined in section 3(f)(1) of EO 12866, and did not require a full economic impact analysis. However, WHD evaluated the impact where only a few minors employed would be affected by these revisions and any costs that might result from using older employees to perform the prohibited tasks would be more than offset by reduced health and productivity costs resulting from accidents and injuries to minors on the job. A change in the regulation on government-issued certificates of age intended to reduce paperwork when a minor's employment ends would reduce the cost impact of the existing regulation.

Evidence: FY 2004-05 DOL Annual Reports; WHD Performance Plan 2005 and 2006; Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, Final Rule Preamble 69 FR 22122; Child Labor final rule, preamble 69 FR 75382

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: WHD has had, for a number of years, three core enforcement goals: increasing compliance in low-wage industries; reducing employer recidivism; and, improving customer satisfaction by the timely resolution of compliant investigations. Since FY 2003 when complaint resolution became a separate goal, WHD has seen success in its complaint program. The agency has also noted an increase in the percent of establishments that remain in compliance following WHD intervention. WHD's compliance successes in low-wage industries, such as garment manufacturing and health care further demonstrate the positive influence of the agency's strategies on employer behavior. WHD has also seen success in maintaining compliance with the child labor provisions in the restaurant and grocery store industries where youth are most likely to be employed. Complaint Resolution ?? WHD's FY 2003 to 2004 targets for timely complaint resolution were measured in the average number of days to resolve a complaint investigation. Given the progress made, the goal was modified in FY 2005. However, by FY 2005, WHD resolved complaints, on average, in 85 days. This represents a 39 percent decrease in the average number of days in which to conclude a complaint from the end of FY 2001. For the last several years, WHD has focused on ensuring customer satisfaction by reducing or maintaining the average number of days in which to conclude a complaint investigation. 02 Baseline 03 Target 03 Result 04 Target 04 Result 05 Result 129 Days 126 08 108 92 85 ?? WHD's FY 2005 target and goal evolved to the average number of days to resolve a violation complaint to ensure that timeliness goals did not result in less than complete and full investigations. In FY 2005, WHD met this target and was successful in decreasing the average number of days to resolve a violation complaint from 189 days in FY 2004 to 178 days in FY 2005. 2004 Baseline 2005 Target 2005 Result 2006 Target 189 Days 127 178 176 ?? To ensure continued long-term performance success in the agency's compliant resolution program area and to provide more ambitious targets, WHD's FY 2007 goal and measure will be efficiency-based: to maximize the impact of complaint investigations by increasing the number of workers helped per 1,000 hours. Employer Recidivism ?? Prior to 2002, WHD measured recidivism as a component of its investigation-based compliance surveys in low-wage industries. In FY 2002, WHD established recidivism goals to capture recidivism rates across all Acts. FY 2002 and FY 2003 goals were to: Increase the percent of reinvestigations without any violations; and, 2002 Baseline 2003 Target 2003 Result 34% 36% 37% Decrease the percent of reinvestigations with identical violations. 2002 Baseline 2003 Target 2003 Result 19% 17% 17% Because of concerns on data quality, these goals were revised in FY 2003 to concentrate on the agency's FLSA recidivism rates as that program represents the majority of agency's enforcement actions. ?? WHD's FY 2003 - 2006 recidivism goals center on prior FLSA violators. In FY 2005, 72 percent were in compliance with the FLSA when reinvestigated.

Evidence: CONTINUATION OF EXPLANATION The results were an improvement over the FY 2004 measure of 71 percent, but down from the FY 2003 baseline of 73 percent. These compliance surveys measure strategies employed over the last five years. WHD is seeing the impact of more recently employed strategies like the implementation of accountability standards, strategic use of penalties, and effective publicity. As a result, WHD is beginning to see improvement in the severity of violations in terms of fewer workers due less back wages for less severe violations. 03 Baseline 04 Target 04 Result 05 Target 05 Result 06 Target 71% 74% 71% 72% 72% 73% Low-wage Industries (Increasing Compliance): Beginning in the early 1990s, WHD established and met compliance goals in the low-wage industries of agriculture, garment manufacturing, and the nursing home industry. (See attached supplemental submission.) ?? In FY 2005, WHD saw the percent of New York City garment workers employed in compliance increase from 62 to 76 percent. ?? In Southern California, the percent of garment workers employed in compliance fell from 63 to 54 percent. ?? In FY 2004, in the health care industry, WHD increased the percent of workers employed in compliance by 1.2 percentage points ?? just under the 2 percentage point target. These successes directly support WHD's long-term performance outcome goals, and corresponding measures that, together, advance the Agency's mission. WHD has demonstrated progress in meeting long-term performance goals addressing complaint resolution, low-wage industries, and employer recidivism. EVIDENCE DOL FY 2003 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) WHD FY 2001 - 2006 Annual Performance Plans and Reports on Annual Performance Plans WHD National Recidivism Survey Draft Report (2003-2005) 1998 Report on Low-Wage Initiatives 1999-2000 Report on Initiatives

Does the program (including program partners) achieve its annual performance goals?

Explanation: WHD's Annual Performance Goals support the agency's long-term goals. As demonstrated above and in the attached supplemental, WHD has established annual performance goals over the last 15 years. In summary, WHD has achieved its annual performance goals. In 2005, WHD met the following goals: * Decreased the average number of days needed to conclude violation complaint, from 187 to 178 days * Increased the percentage of prior violators who achieve and maintain substantial FLSA compliance following a full FLSA investigation, from 71 percent to 72 percent * Increased the percent of low-wage workers paid and employed in compliance with FLSA in the garment industry; the percent of New York City garment workers employed in compliance increased from 62 to 76 percent. While the percent in Southern California fell from 63 to 54 percent.

Evidence: DOL FY 2003 - 2007 Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm_ DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) WHD FY 2001 - 2006 Annual Performance Plans and Reports on Annual Performance Plans WHD National Recidivism Survey Report (2003-2005) 1998 Report on Low-Wage Initiatives

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: WHD goals include efficiency strategies designed to promote achievement of the goals. For example, WHD's recidivism goal measures how efficient WHD was in obtaining and sustaining long-term compliance following an intervention. All low-wage industry goals incorporate intermediate goals that allow the program to establish specific strategies to address the major challenges that contribute to non-compliant behavior among employers. In FY 2004, WHD established a baseline efficiency measure of 266 workers for whom WHD received an agreement to pay or an agreement to remedy per 1,000 enforcement hours in a complaint investigation. In FY 2005, WHD saw that measure improve to 270 workers per 1,000 hours. In FY 2004, WHD also established a baseline efficiency measure of 275 workers in low-wage industries for whom WHD received an agreement to pay or an agreement to remedy per 1,000 enforcement hours. In FY 2005, WHD saw improvements in the number of workers from 275 in FY 2004 to 280 workers per 1,000 hours.

Evidence: WHD FY 2001 - 2006 Annual Performance Plans and Reports on Annual Performance Plans

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Generally, only States would have programs with similar purpose and goals. Without knowledge of the measurement systems used in different States or the performance goals for each of the 50 States, WHD cannot reasonably compare performance. Gathering the necessary comparable data for each individual State is not feasible. States vary substantially on their approaches to the release of enforcement related statistics. Some are quite reluctant to release such information, i.e., Montana. Others, like Oklahoma have some relevant data but only release it upon request, while still other States, i.e., Connecticut, do release some enforcement statistical data and even place it on the web. However, the information type and the amount that is released depends upon a variety of factors such as the administration in charge of the State government at that particular time and the data elements that each administration considers important or appropriate for release from their particular perspective. Further, States have varying degrees of enforcement. For example, Florida has a constitutional law providing for a minimum wage, but no minimum wage enforcement presence. Maryland recommends employees having concerns with non-payment of the minimum wage or overtime pay should contact WHD. Even if the data were available from the States, comparing it with WHD data would be impractical. For example, some States such as California, Oregon, Washington, and Massachusetts have a minimum wage rate of $7.00 per hour or more that is greater than the federal minimum wage rate of $5.15 per hour. Coverage requirements, i.e., dollar volume tests for retail businesses (to be subject and non-exempt from the minimum wage requirements) are different under some State laws than it is under the comparable Federal statute. (This does not even include the Federal perspective of coverage based upon employees being involved in interstate commerce.) Moreover, because of the differing minimum wage rates and varying coverage requirement, Federal investigators might find a wage violation, while State investigators would not declare the existence of a violation finding. Other states, such as Kansas and Ohio, have minimum wage rates that are lower that the federal minimum wage. Then, of course, there are still six States that have no minimum wage law with the resulting zero violation findings. Moreover, not all States have comparable statutes in all WHD enforcement programs. For example, the States do not enforce the H-1B or H-2A provisions of the Immigration and Naturalization Act.

Evidence: State Labor Laws (http://www.dol.gov/esa/programs/whd/state/state.htm) Monthly Labor Review, January, 2006 (http://www.bls.gov/opub/mlr/2006/01/art1full.pdf) State Minimum Wage Table (HUhttp://www.dol.gov/esa/minwage/america.htmUTH)

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: WHD has initiated or participated in a series of independent evaluations addressing WHD's effectiveness in achieving its mission relative to specific statutes, its resource allocation, performance, overall efficiency, targeted enforcement and compliance assistance strategies, and areas related to the President's Management Agenda. Since 2001, studies conducted by the Department's Inspector General (OIG) and the U.S. Government Accountability Office (GAO) and independent contractors have demonstrated WHD's success in achieving results. WHD has also institutionalized procedures and strategies recommended following audits and evaluations, to improve performance and future results. GAO reports have documented WHD's success in achieving results in its low-wage programs, impacting youth workers, day laborers and disabled workers. In other reports, GAO has studied the impact of regulations, such as the Service Contract Act and Overtime provisions of the Fair Labor Standard Act, and documented WHD's administration of these regulations. Similarly, in audits evaluating WHD's programs involving youth workers and workers with disabilities, the OIG has documented WHD's success in achieving results. Additional OIG audits of WHD's civil monetary penalty system, financial management system, and settlement agreement procedures, have demonstrated WHD's effective management. Formal evaluations funded by the Department's Center for Program Planning and Results have reported WHD's success in budget and performance integration, and strategic planning. Specifically, these independent studies have driven and supported the agency's strategic development in areas of low-wage industries, youth employment and compliance assistance. Several evaluations of WHD's compliance assistance activities have demonstrated the effectiveness of compliance assistance materials and the modes of distribution. External evaluation of the agency's garment program and health care initiative supported WHD conclusions on its regulatory efficacy in improving compliance in low-wage industries. External evaluations have confirmed WHD's success in achieving its National recidivism goals, and validating reporting systems (see supplemental).

Evidence: DOL FY 2005 - 2007 Performance Budget Overviews (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2001 - 2005 Annual Reports (http://www.dol.gov/dol/aboutdol/main.htm) DOL FY 2005 Annual Report (http://www.dol.gov/_sec/media/reports/annual2005/) WHD FY 2003 - 2006 Annual Performance Plans DOL 2003-2008 Strategic Plan (http://www.dol.gov/_sec/stratplan/main.htm) 1998 Report on Low-Wage Initiatives 1999-2000 Report on Initiatives DOL CPPR Independent Evaluation Summaries FY 2003- 2005 OIG Report Nos. 05-01-002-04-420, March 19, 2001; 2E-04-420-0001, August 23, 2002; 23-05-009-04-001, September 30, 2005; 04-06-001-04-420, October 2005; OIG Audit of Wage and Hour Division's Performance Measures, April 22, 2003 and in each subsequent year GAO-01-886 September 2001, September 4, 2001 GAO 02-925, September 2002 GAO-02-880, October 4, 2002 GAO-06-27, December 2005 GAO-04-735R, May 5, 2004 GAO-05-58R, June 3, 2005 Boston University report on the Garment Industry Mathematica Policy Research memorandum on health care industry WHD Supplemental: Independent Evaluations

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: Due to the broad impact of WHD regulations, which protect over 130 million workers in more than seven million workplaces throughout the U.S. and its territories, WHD is regularly audited by the Government Accountability Office and the Department of Labor's Office of the Inspector General (OIG). Prior to publishing its final rule revising the FLSA "white collar" exemption, a full cost benefit analysis was completed. The cost benefit analysis determined that updating and clarifying the rule will reduce Part 541 violations and are likely to save businesses at least $252.2 million per year. In May 2004, GAO reviewed the new rule defining and delimiting the exemptions for executive, administrative, professional, outside sales and computer employees. GAO found that (1) the rule would revise regulations under the FLSA implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees; and (2) DOL complied with all applicable requirements in promulgating the rule. In June 2005, GAO reviewed the economic analysis conducted by the agency's contractor, CONSAD. GAO concluded that WHD made key decisions in the studies of updated overtime rule and that the contractor, CONSAD Research Corporation, assisted the agency in studying the impact of both the proposed and final overtime rule. To ensure compliance with the new regulations, WHD convened an enforcement task force and designed an initiative for FY 2005. The WHD's Overtime Security Task Force's FY 2005 initiative focused on the 1.3 million workers who became eligible for overtime compensation when the salary threshold increased from $155 to $455 a week - the first such increase since 1975. The Task Force identified industries, such as restaurants, day care centers, grocery stores, hotels and motels, in which there were large numbers of salaried workers who earned less than $455 a week and who reported working over 40 hours in a week. WHD conducted 165 investigations as part of the initiative resulting in approximately $217,000 in back wages collected for 285 employees who were employed in violation of the Overtime Security rule. FY 2005 Overtime Security Task Forces Findings: ?? Violations resulting from the new salary level were identified in 44 of the 79 investigations and were most common in the hotel and motel industry and in restaurants. As a result, back wages of $48,766 were found due to 97 employees who were paid below the $455 threshold. ?? Violations of the salary basis tests were identified in 30 of the 79 investigations and were most common in the restaurant and nursing home industries ("salary basis" means an employee regularly receives a predetermined amount of compensation each pay period). These types of violations resulted in $72,336 in back wages due 95 employees. ?? The initiative investigations also found 52 workers due $60,662 in back wages in 12 cases where the workers did not meet the duties test for the executive exemption. In total for FY 2005, including the results of the 165 Overtime Security Task Force investigations, WHD collected nearly $14.7 million for approximately 11,000 employees as a result of violations of the new Overtime Security regulations (29 C.F.R. Part 541). The OIG planned an audit for FY 2006 to determine the effectiveness of WHD's implementation of the revised Part 541 regulations.

Evidence: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, Final Rule Preamble 69 FR 22122 OIG FY 2006 Audit Work Plan GAO-05-580R June 3, 2005 GAO-04-735R, May 5, 2004 WHD FY 2005 Statistics Fact Sheet (http://www.dol.gov/esa/whd/statistics/200531.htm)