Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About It

What is Wage Theft?

 

 

What is wage theft?

Wage theft covers a variety of infractions that occur when workers do not receive their legally or contractually promised wages.

Common forms of wage theft are non-payment of overtime, not giving workers their last paycheck after a worker leaves a job, not paying for all the hours worked, not paying minimum wage, and even not paying a worker at all.

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What laws are broken in wage theft cases?

Most commonly wage theft is a violation of the Fair Labor Standards Act (FLSA), which provides for a federal minimum wage and allows states to set their own (higher) minimum wage, and requires employers to pay time and a half for all hours worked above 40 hours per week.

Under the Davis-Bacon Act, workers being paid by a contractor or subcontractor of a federal government contract are entitled to receive the prevailing wage for that work in the city or region of the U.S. where the work is done. Prevailing wages, which are calculated by the US Department of Labor, are higher than minimum wage. Many federal contractors simply ignore this law.

Wage theft may also involve violations of tax laws, through misclassification of employees as independent contractors. When a worker is called an independent contractor, the employer does not pay their share of federal taxes.

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In what types of workplace or industry does wage theft occur?

Wage theft is endemic, and no group of workers is immune, including workers earning good wages. It is more likely to occur in non-union workplaces.  Union workers generally receive pay according to their negotiated contract, and any wage theft would be challenged by the union. Immigrant and native born workers alike have their wages stolen, though low wage workers are particularly vulnerable.

Agriculture, poultry processing, janitorial services, restaurant work, garment manufacturing, long term care, home health care and retail are the industries with the most reported cases of wage theft.

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Is wage theft concentrated in a particular region?

Wage theft is a national problem. Worker Centers report serious problems with wage theft in the Northeast, Midwest, Southwest, South, and West Coast.

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Where do workers turn if their wages have been stolen?

There are approximately 130 worker centers throughout the country, small grassroots organizations that are at the forefront in wage enforcement actions (Source: Janice Fine, Worker Centers: Organizing Communities at the Edge of the Dream).

There are two main routes that workers and their advocates use to try to recover wages that were stolen. The first path is direct action-getting a group of workers to confront their boss or tell the business’ customers what is happening. The second route is through lawsuits, sometimes class action suits against large employers.

You can find an interactive map listing worker centers as well as other organizations involved in the fight against wage theft here.

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What kind of solution is needed?

While many reforms are needed, there are some specific changes that can be made by the new leadership of the DOL, and there are changes that require new legislation by Congress.

Case-by-case resolution of individual complaints is not enough. The DOL must engage in targeted investigations of industries and employers where wage theft is rampant, in partnership with community organizations and congregations that workers trust, groups that know who the criminal employers are.

Workers need a consistently proactive, transparent, and accountable Department of Labor Wage and Hour Division.

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What type of legislation is needed?

Mandate that employers give workers pay stubs, so that they can accurately calculate their hours and earnings and have a record if they need to prove they were cheated.

Fix the statute of limitations on wage claims, which currently has many cases thrown out because the DOL has not been able to resolve them in two years.

Protect workers from retaliation for filing complaints with government agencies.

Create mandatory minimum penalties for employers who repeatedly violate the law.

Provide resources to community organizations to partner with the DOL to eliminate wage theft and win back wages.

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What legislation is being worked on?

The Wage Theft Prevention Act (HR3303), introduced by Congressman George Miller (D-IL) in July 2009, amends the Fair Labor Standards Act so that the Department of Labor (DOL) can offer stronger protections for workers. The bill will do away with a statute of limitations that limited the DOL to two years to resolve a wage complaint. This important first step also allows workers to file private lawsuits while the DOL is still investigating a complaint.

Many organizations are working on passing state and local legislation. Click to view an interactive map detailing current and past local/state legislative campaigns.

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What can I do?


For Students:

  • Volunteer at at nearby organization involved in the fight for worker justice. View wagetheft.org’s interactive map to find an organization near you.
  • Join/Found a JWJ/USSA Student Labor Activist Project (SLAP) at your university.
  • If you are a Seminary, Rabbinical, or Islamic graduate student consider applying for the Seminary Summer & Islamic Internship for Worker Justice.  It is a 10-week paid internship for seminary, rabbinical, and Muslim graduate students combining education, action, and reflection. Participants are placed at labor unions around the country to support campaigns involving workers in low-wage jobs
  • Consider applying for an IWJ Summer Internship.  The Interfaith Worker Justice Summer Internship is a 10-week program for undergraduate students who want to be active in the worker justice movement.

 

For Concerned Citizens/Advocates/Workers

  • Volunteer at at nearby organization involved in the fight for worker justice. View wagetheft.org’s interactive map to find an organization near you.
  • Organize a delegation of religious leaders and workers to meet with your representative and senators. Ask them to co-sponsor the Stop Wage Theft Bill.
  • Hold an educational forum for your congregation or student group on Wage Theft. Invite workers, worker center leaders, and IWJ leaders to speak.  To learn more about reaching out to congregations go here and here.  For more information about student groups go here.
  • Make sure all businesses you patronize pay their workers fairly and legally.
  • Write to your congress person about worker justice issues.  Click here to learn how.

 

For Businesses and Employers

  • Do not let your business suffer because of unscrupulous competitors.  Report illegal labor practices that skew the marketplace in favor of unscrupulous businesses to the Department of Labor.  Find your local Department of Labor Wage and Hour office here
  • Make sure that all workers you hire are paid all of their earned wages
  • Make sure you are in compliance with all DOL Wage and Hour regulations

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Further Reading:

A comprehensive look into Wage Theft in the United States can be found in the book “Wage Theft in America” written by Kim Bobo, a nationally-recognized social justice advocate, combines first person accounts with statistics and analysis, as well as actions for positively affecting a shift in policy, policy enforcement, and ultimately the reduction and elimination of Wage Theft. For more on “Wage Theft in America” click here.

IWJ’s Wage Theft Resource Page

Janice Fine has written an excellent book on the Worker Center movement entitled Worker Centers: Organizing Communities at the Edge of the Dream. Further info on the book may be found at the Economic Policy Institute website.

Fine, Janice. Worker Centers: Organizing Communities at the Edge of the Dream. Ithaca, N.Y.: Cornell University Press, 2006. ISBN 0801444233

Progressive State‘s website is an excellent source for local progressive news (including wage theft).  In particular their “Promoting Wage Law Enforcement Policies in 2010” webpage is a good resource.

DOL – We Can Help

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