About the Report

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The U.S. Department of Labor (DOL)’s Chief Evaluation Office (CEO), in partnership with the Wage and Hour Division (WHD) contracted with Mathematica Policy Research to synthesize existing literature and data related to WHD compliance strategies. To ensure this work builds from existing knowledge, as described in the report, Mathematica reviewed documents, literature, and databases to answer the overarching research questions, “What is currently known about effective compliance strategies, and what are promising directions for research that could fill in gaps in this knowledge?” The review protocols made sure that a comprehensive set of materials were uncovered, and narrow inclusion criteria ensured that results would be specifically tailored to WHD’s mission.

Key Takeaways

• The review identified three potentially useful theories of employer behavior that can be applied to compliance decisions: Rational choice theories that highlight an employer’s perception of the costs and benefits of compliance versus noncompliance; social theories that emphasize the importance of the employer’s larger social context in making compliance decisions, such as norms, culture and ethics that set behavioral expectations; and behavioral theories that address the cognitive habits of employers who make unpredictable compliance choices due to factors such as cognitive biases, procrastination, loss aversion, or reliance on irrelevant or complex information.
• A relatively large body of research has shown that enforcement strategies, particularly investigations, can be effective in improving employer compliance with laws and regulations.
• There is mixed evidence on the effectiveness of strategies that include partnerships and collaborations with external monitors (other than government) and social groups that attempt to influence compliance decisions of employers.
• Research shows that publicizing violations by specific employers is an effective complement to other enforcement approaches.
• Natural field experiments of small behavioral interventions such as clear communication or social norms have increased compliance.
• The review uncovered five gaps in knowledge regarding the effectiveness of compliance strategies. More information is needed to understand:
  • The effectiveness of strategies that combine compliance assistance with partnerships and collaborations.
  • The factors that impact compliance in self-monitoring and third-party monitoring programs.
  • The effectiveness of deterrence strategies tailored to specific industries.
  • How to increase compliance with laws and regulations that WHD enforces.
  • Whether different combinations of behavioral interventions can increase employer compliance.

Citation

Dolfin, S., Maxwell, N., Gould-Werth, A., Yañez, A., Deutsch, J., Hendrix, L. (2020). Mathematica. Compliance Strategies Evaluation Literature and Database Review. Chief Evaluation Office, U.S. Department of Labor.

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The Department of Labor’s (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy and CEO’s research development process.