Many businesses are increasing their bottom line by not paying their workers all of their legally earned wages. They are stealing wages from lower paid workers and there is little enforcement of existing employment laws. Wage theft is rampant in many industries, and it’s having a profound impact on millions of workers in America, and causing significant economic hardship.
America’s workplace laws are failing to protect our country’s workers. In industries ranging from construction and food manufacturing to restaurants, janitorial services and home health care, workers are enduring minimum wage and overtime violations, hazardous working conditions, discrimination, and retaliation for speaking up or trying to organize. They have little recourse because of their need for work, especially during the recession.
A 2008 UCLA survey of 4,387 workers found that many employment and labor laws are regularly and systematically violated, impacting a significant part of the low-wage labor force in the nation’s largest cities. Based on survey results, estimates are that in a given week, front-line workers in low-wage industries in Chicago, Los Angeles and New York City collectively lose more than $56.4 million per week as a result of employment and labor law violations.
The following is a summary of key violations from the UCLA survey titled “Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities:”
Minimum wage violations:
- Fully 26 percent of workers were paid less than the legally required minimum wage in the previous work week.
- 60 percent of workers were underpaid by more than $1 per hour.
- Over twenty-five percent of respondents worked more than 40 hours during the previous week. Of those, 76 percent were not paid the legally required overtime rate by their employers.
- Like minimum wage violations, overtime violations were of substantial magnitude. The average worker with a violation had put in 11 hours of overtime—hours that were either underpaid or not paid at all.
- Nearly a quarter of the workers in the sample came in early and/or stayed late after their shift during the previous workweek. Of these workers, 70 percent did not receive any pay at all for the work they performed outside of their regular shift.
Meal break violations:
- The large majority of respondents (86 percent) worked enough consecutive hours to be legally entitled to at least one meal break during the previous week. Of these workers, more than two-thirds (69 percent) received no break at all, had their break shortened, were interrupted by their employer, or worked during the break—all of which constitute a violation of meal break law.
Pay stub violations and illegal deductions:
- In California, Illinois and New York, workers are required to receive documentation of their earnings and deductions, regardless of whether they are paid in cash or by check. However, 57 percent of workers in our sample did not receive this mandatory documentation in the previous workweek.
- Employers are generally not permitted to take deductions from a worker’s pay for damage or loss, work-related tools or materials or transportation. But 41 percent of respondents who reported deductions from their pay in the previous workweek were subjected to these types of illegal deductions.
Tipped job violations:
- Of the tipped workers in our sample, 30 percent were not paid the tipped worker minimum wage (which in Illinois and New York is lower than the regular state minimum wage).
- In addition, 12 percent of tipped workers experienced tip stealing by their employer or supervisor, which is illegal.
What can we do to stop wage theft?
According to the survey, when workers are victims of wage theft, their families experience more poverty and economic insecurity. Also, their local communities suffer from social instability and lower tax revenue. When unscrupulous employers violate the law, responsible employers are forced into unfair competition, setting off a race to the bottom that threatens to bring down standards throughout the labor market. And when significant numbers of workers are underpaid, tax revenues are lost.
The survey report suggests three principles that should drive the development of a new policy agenda to protect the rights of workers.
- Strengthen government enforcement of employment and labor laws: Public policy should leverage the resources and power that reside in agencies responsible for enforcing worker protections. This will require additional staffing, but more important, new strategies are needed to address the reality that workplace violations are becoming standard practice in many low- wage industries.
- Update legal standards for the 21st century labor market: Weak employment and labor laws open the door to low-road business strategies focused on illegally cutting labor costs. Raising the minimum wage, updating health and safety standards, ending exclusions that deny workers coverage, and strengthening the right of workers to organize through labor law reform—all are key improvements that would raise compliance in the workplace and improve the competitive position of employers who play by the rules.
- Establish equal status for immigrants in the workplace: The best inoculation against workplace violations is ensuring that workers know their rights, have full status under the law to assert them, have access to sufficient legal resources, and do not fear retaliation. But for unauthorized immigrant workers today, this can be a near impossibility. Any policy initiative to reduce workplace violations must prioritize equal protection and equal status in national immigration reform, and ensure status-blind enforcement of employment and labor laws.
According to a recent article in the New York Times, the Obama administration is investigating pay practices throughout the health care industry, and as a result, hospitals around the country have paid millions of dollars in back wages to settle claims by the government and their employees. And many more hospitals are fighting class-action lawsuits that raise the same issues.
In St. Louis, the Labor Department has recovered more than $1.7 million in back wages for 4,000 employees of hospitals and clinics operated by SSM Health Care, a Roman Catholic system.
In Boston, the Partners HealthCare System agreed to pay 700 employees more than $2.7 million in overtime back wages to resolve a lawsuit by the department alleging violations of the Fair Labor Standards Act.
And under the proposed settlement of a class-action lawsuit in California, Kaiser Permanente would pay $7.25 million to hundreds of registered nurse coordinators, case managers and other medical workers. The employees said they had been denied overtime pay because they were improperly classified as exempt. Kaiser denied wrongdoing but has agreed to the settlement.
photo: Progress Illinois
video: Interfaith Worker Justice