The Department of Labor's system for receiving and responding to wage and hour complaints is ineffective and discourages wage-theft complaints, according to a report by the Governmental Accountability Office (GAO) after an undercover investigation.

For the report, the GAO posed as fictitious complainants and filed 10 common complaints with the department's Wage and Hour Division (WHD). The complaints centered on violations related to child labor, minimum wage, last paycheck, and overtime.

The GAO found that WHD successfully investigated only 1 of the 10 fictitious cases, correctly identifying and investigating a business that had multiple complaints filed against it by the fictitious complainants. In 5 of the 10 cases, WHD failed to record the complaints in its database. In 2 of the 10 cases, WHD recorded that the employer had successfully paid the employees back wages when in fact the fictitious complainants reported to WHD they hadn't been paid.

In one case, WHD failed to investigate a complaint alleging that children were operating hazardous machinery and working too many hours, according to the GAO report.

The GAO says that in another case, a WHD investigator lied about investigative work performed and did not investigate the complaint, which involved the minimum wage.

In the case, The investigator told the fictitious complainant that WHD had no jurisdiction because the gross revenues of the fictitious employer failed to meet the minimum standard for FLSA coverage, and that the investigator obtained information on the fictitious employer's revenue from an IRS database. The GAO says that was a lie because the fictitious employer had never filed taxes, WHD officials told the GAO they have no access to IRS databases, and the case file showed that no contact was made with the IRS.