Thieving Employers Costing Us Millions
There are lots of thieves in this country, as in any country. But no thieves anywhere are more blatant than the U.S. employers who steal millions of dollars from their own employees – often right out in the open, unchallenged. It's called "wage theft," and it happens everywhere.
The cheating bosses don't take the money directly from their employees. No, nothing as obvious as that. The employers practice their thievery by underpaying workers, sometimes by paying them less than the legal minimum wage. Or they fail to pay employees extra for overtime work, or even force them to work for nothing before or after their regular work shifts or at other times. Some employers make illegal deductions from employee wages. And some withhold the final paycheck due employees who quit.
Such employer cheating is rampant in restaurant, retail and construction businesses, where undocumented workers make up much of the workforce. The undocumented are so vulnerable, given their illegal status, that they're particularly easy pickings for unscrupulous bosses.
The full extent of employer cheating is not known. But one study shows that in New York City alone, workers are cheated out of more than $18 million a week.
Another study, covering more than 4,000 workers in Los Angeles and Chicago, as well as New York, found that more than one-fourth of the workers had been paid less than the minimum wage. That and other employer violations cut their paychecks, which averaged about $300 a week, by more than $50.
It's not just the cheated workers who are harmed. We are all harmed, notes former Obama White House adviser Van Jones, since wage theft "keeps lawfully earned pay from being spent where it will do the most to strengthen our economy."
Under heavy pressure from immigrants' advocates and unions, New York State recently enacted an anti-wage theft law that hopefully will set a national pattern.
Beginning in April, New York employers caught shortchanging workers will have to fully reimburse them and pay a fine of up to twice that amount – four times the previous penalty.
The previous penalties were so slight – about one-fourth of the new penalties – that many employers treated them simply as a cost of doing business. That obviously is the attitude of wage-cheating employers in other states, where penalties are minimal.
It's particularly important that New York's law calls for up to $10,000 in penalties for employers who fire or threaten workers who protest their underpayment. That's apparently a common practice nationwide.
The movement to enact similar laws elsewhere has been growing, most importantly in Congress, where a proposed national law has been introduced.
The Labor Department has meanwhile stepped up enforcement of the current law against wage theft, using public service announcements, a web site and a telephone hot line to encourage workers to report employers who cheat.
The department is especially urging immigrant workers to turn in employers who are shortchanging them, and is lining up worker support groups to also help with enforcement of the wage and hour laws. The Department itself has hired more than 250 new investigators to search for wage cheaters.
All of that is important, but it's not enough. We also need more tough state laws against wage cheating – or, even more – the proposed national law against wage cheating.
That would not only help some of our poorest and most needy workers. As former presidential adviser Jones says, it also would "increase consumer spending at a time we need it most." He says, "We should invest in bringing those cheaters to justice. It's right for the economy – and the right thing to do."
Who but cheaters could possibly argue with that? Congress should act – now!
Dick Meister is a San Francisco-based columnist who has covered labor and politics for a half-century as a reporter, editor, author and commentator. Contact him through his website, www.dickmeister.com