Spotlight Exclusives

Workers are Poorer when Business as Usual۪ Includes Wage Theft

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In today۪s economy it۪s great news when someone lands a job. Worries of job losses have plagued many families already struggling in the current recession. Yet, even when managing to retain employment, many workers are still challenged to provide basic needs for their families. As new data reveals, this is not just an issue of wage adequacy, but of wages actually being stolen from those who have worked hard to earn their pay. As the White House concludes its Jobs Summit, which largely focused on how to get the private sector to hire more workers, it is also important to continue strengthening labor protections and penalties against unscrupulous employers that skirt the law.

“Wage theft” is far from an isolated phenomenon. Across America, predominantly low-wage workers are routinely denied the wages they are legally owed. As many employees fear retaliation for reporting their employers, these practices are often hidden and unpunished. However, a recently-released investigative report, which surveyed nearly 4,400 workers in Los Angeles, Chicago, and New York, for the first time provides a comprehensive look at the extent of this exploitation in U.S. cities. Its findings were significant:

· Twenty six percent of the workers in the sample were paid less than the legally required minimum wage in the previous work week. Sixty percent of those were underpaid by more than $1 per hour.

· Over a quarter of respondents worked more than 40 hours, the average worker putting in more than 11 hours of over-time. Yet, 76 percent were not paid the legally required over-time rate.

· Nearly a quarter of workers sampled were required to come in early or stay late; yet, 70 percent did not receive compensation for those hours worked outside their shift.

· Thirty percent of tipped workers were not paid the state۪s legally required tipped-worker minimum wage. Twelve percent of tipped workers had their tips stolen by their employer or supervisor.

In total, these workers lost out on $51 per week, which would amount to more than $2,600 annually for a full-time worker. The report estimated that 1.1 million workers across the three cities are deprived of $56.4 million in wages they earn every week. This is not chump change.

Wage theft can appear where it۪s least expected.This year the New York Department of Labor conducted a surprise investigation of restaurants and coffee shops in one of Brooklyn۪s prime neighborhoods, Park Slope. Some of the worst violations were for delivery employees working 60 to 70 hours per week and paid a salary of $210 to $275 per week. As New York Labor Commissioner, M. Patricia Smith reiterated, “This investigation shows that wage theft happens not only in dimly-lit factories or grim depressed neighborhoods — it happens everywhere. Even our very nicest neighborhoods sometimes have sweatshops on their main streets.”

Fortunately for workers, momentum is growing for increased worker protection and penalties against exploitative employers. Advocates and policy makers are calling for investigation and monitoring, tougher penalties against employers, and greater protections for employees that come forward.New York State enacted a law last month that would increase the minimum and maximum civil penalties against employers who retaliate against workers for reporting labor law violations, while also allowing the Labor Department to award lost compensation to those workers who have been retaliated against.

Further, in a statement also issued in November, the U.S. Secretary of Labor, Hilda L. Solis, promised increased enforcement and outreach efforts by the Department of Labor: “There is no excuse for employers who disregard federal labor standards especially those that are designed to protect the most vulnerable in the workplace. . . . America۪s workers should rest assured that protecting worker rights is a top priority at the Department of Labor.” Solis announced the hiring of an additional 250 new wage and hour investigators, a staff increase of more than one-third, to ensure that “we promptly respond to complaints and can undertake more targeted enforcement. . . . We will not rest until the law is followed by every employer, and each worker is treated and compensated fairly.”

During the Jobs Summit, President Obama did express his belief that “the government has a critical role in creating the conditions for economic growth.” Ensuring that existing labor laws are not violated is a critical step in helping the economy to grow as the consequences of wage theft reach more than the worker alone. Keeping wages from workers is not only an illegal and immoral act against the individuals but it hurts the entire economy when communities are robbed of the ability to support themselves.

Posted by Jodie

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