Summary: Employees' claims for back wages under the Fair Labor Standards Act would be better protected if the statute of limitations stopped running--or "tolled"--at an earlier point. Although the Department of Labor claims that employees seldom lose back pay as a result of their claims expiring under the statute of limitations, the Food Lion case illustrates how an employer's liability for back wages can be reduced because of the running of the statute of limitations. Despite complaints by employees of the supermarket chain in August 1984 about unpaid overtime, the government did not start investigating these allegations until February 1986 and did not obtain a waiver of the statute of limitations for the initial period investigated. As a result, three former Food Lion workers lost nearly $12,000 in back wages. In GAO's view, changing the statute of limitations for the Fair Labor Standards Act so that it begins running when an employee files a complaint with Labor would afford the same protection for claimants as in some other labor laws. The clock on the statute of limitations now continues to tick during the time it takes Labor to begin an investigation, complete it, negotiate with an employer, and obtain payment--a process that can take months. To protect employees who Labor determines are owed back wages but have not filed complaints, GAO believes that the statute of limitations should begin running as of the date that Labor notifies the employer that it will be starting an investigation. GAO summarized this report in testimony before Congress; see: Minimum Wages and Overtime Pay: Change in Statute of Limitations Would Better Protect Employees, by Clarence C. Crawford, Associate Director for Education and Employment Issues, before the Subcommittee on Employment and Housing, House Committee on Government Operations. GAO/T-HRD-92-59, Sept. 22, 1992 (13 pages).
