Sunday, November 10, 2013

Wage Theft by Employers is Rampant

From the Economic Policy Institute (EPI): "Over the past two years, state [GOP] legislators across the country have launched an unprecedented series of initiatives aimed at lowering labor standards, weakening unions, and eroding workplace protections for both union and non-union workers. This policy agenda undercuts the ability of low- and middle-wage workers, both union and non-union, to earn a decent wage."

And America's workers are also facing a crime epidemic—one in which the criminals are rarely even made to pay back what they've stolen. The crime in question is wage theft:

"The amount of money stolen out of employees' paychecks every year is far greater than the combined total stolen in all the bank robberies, gas station robberies, and convenience store robberies in the country."

Wage Theft

Gordon Lafer at the EPI assesses some of the damage:

Fully 64 percent of low-wage workers have some amount of pay stolen out of their paychecks by their employers every week, including 26 percent who are effectively paid less than minimum wage. Fully three-quarters of workers who are due overtime have part or all of their earned overtime wages stolen by their employer. In total, the average low-wage worker loses a stunning $2,634 per year in unpaid wages, representing 15 percent of their earned income.
And enforcement? Forget about it. At the federal level, there's just one agent enforcing wage laws for every 141,000 workers. More than half of the states have cut wage enforcement staff in recent years, and some states have tried to eliminate those positions entirely. For instance,
In 2010, Missouri’s labor department collected $200,000 in restitution for minimum-wage violations and $500,000 for prevailing-wage violations, and issued 1,714 citations for child-labor violations. Yet [Republican state House Speaker Steven] Tilley charged that investigators were being “overzealous,” particularly in prosecuting complaints of employers cheating on prevailing wages.
For many Republican politicians, crimes committed by employers against workers don't really register as crimes at all in our political environment. And while the Obama administration has cracked down, the back pay it's collected is just a drop in the bucket of what workers have earned that their employers have taken.

The Department of Labor announced agreements to cut down on wage theft through mis-classification of workers. The agreements, with the Internal Revenue Service and a number of states, allow improved information sharing and law enforcement efforts against employers who mis-classify workers as independent contractors to avoid paying benefits or overtime and other pay.

Cracking down on wage theft had been a major focus for the previous Labor Secretary Hilda Solis:

In 2010, the Labor Department collected nearly $4 million in back wages on behalf of about 6,500 employees who had been misclassified, a 400 percent increase over the amount collected in 2008. The department has hired about 300 additional investigators to probe wage theft complaints.

The Department of Labor had been investigating large residential construction contractors. There are many more such examples out there. Wage theft takes many forms, from workers who work through lunch breaks or continue working after they've clocked out to those who simply aren't paid for their work; mis-classification of workers as independent contractors frames exploited workers as entrepreneurs, a category our society values, while really depriving them of the freedom of self-employment and the stability and benefits of being a direct employee.

50 percent of wage all earners had a net compensation less than or equal to the "median wage", which is estimated to be $27,519 for 2012 (but many employers must think that even THAT is too much.)

Wage and pension thieves

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