Summary: Pursuant to a congressional request, GAO reviewed the problem of sweatshops in the United States, specifically: (1) the extent and nature of sweatshops nationwide; (2) federal, state, and local efforts to regulate sweatshops; and (3) policy options that might help control the problem.
GAO found that: (1) 40 of the 53 Department of Justice (DOJ) and Department of Labor (DOL) officials it interviewed believed that sweatshops were a serious problem in at least one industry in their geographical area; (2) the restaurant, apparel, and meat-processing industries had the most serious and widespread problems; (3) Hispanic and Asian ethnic groups had the largest percentages of workers in sweatshops in those three industries; (4) the officials believed that, in the past 10 years, the severity of violations in the three industries remained about the same or became worse; and (5) there were violations throughout 47 of the 50 states. GAO also found that examples of violations found in the three industries included: (1) failure to keep required records of wages, hours worked, and injuries; (2) incorrect wages, both below the minimum wage and without overtime compensation; (3) illegal work by minors; (4) fire hazards; and (5) work procedures that could cause crippling illness. In addition, GAO found factors: (1) responsible for violations included the large immigrant work force, low profit margins in labor-intensive industries, too few inspectors, and inadequate penalties; and (2) limiting enforcement efforts included limited coordination between DOL and DOJ, insufficient staff resources, and the inadequacy of penalties for wage and hour violations under present law. GAO identified three policy options to improve enforcement, including: (1) increasing the number of compliance officers and changing enforcement priorities; (2) developing closer working relationships among the enforcement agencies; and (3) amending the Fair Labor Standards Act to provide civil monetary penalties for violations.
