Wage theft enforcement against corporate thieves on the rise
Union members rally outside the Waldorf-Astoria in Manhattan on May 6, 2021 in support of a bill that would combat wage theft in New York state. | NYC District Council of Carpenters

BOULDER, Colo.—If Colorado’s discoveries are any indication of a national trend, wage theft, especially from low-wage workers of color, is much more pervasive than people realize—and, increasingly, local District Attorneys and state Attorneys General are stepping up enforcement against such corporate thieves.

So says Michael Dougherty, DA for Boulder, Colo., and one of four DAs from around the U.S. whom the Economic Policy Institute convened on May 17 to discuss the issue and a new EPI report on its extent. They also discussed increasing enforcement measures in their areas.

“In Colorado, workers were losing up to $750 million a year in stolen wages,” says Dougherty. “The impact on lower-wage workers was profound.”

But in past years, DAs often didn’t pursue wage theft cases, for several reasons, panelists explained. One is it’s usually a misdemeanor. “Prosecuting someone for stealing your cell phone is a felony. Prosecuting someone for stealing your pay isn’t,” said Dougherty.

Another is difficulty finding evidence or getting workers, especially low-wage and undocumented workers, to come forward and testify, for fear of boss retaliation or deportation.

A third was the law itself, where sums individually are so small workers are told to go hire a private lawyer and file a civil claim. Few can afford the expense.

And bosses often try to evade the law by misclassifying workers as “independent contractors,” who are not covered by minimum wage and overtime pay laws—or any other worker protection laws.

There’s another reason workers lose which the DAs infrequently discussed: Workers often don’t know how bosses steal their pay.

“At Domino’s, I earned $8.25” an hour, Maryland’s minimum wage, as an inside worker, former pizza chain employee Jake Burdett told Press Associates Union News Service after speaking at a Fight for $15 and a Union rally in D.C. the next day. “We were not only being paid poverty wages, but we didn’t get hazard pay.”

It was even worse when Domino’s switched Burdett to driving, delivering pizzas door-to-door. Then he got the federal tipped minimum wage of $2.13 an hour. Under federal law, bosses are supposed to make up the difference between that and the regular minimum. They often don’t.

“You’re tipped in cash, and it’s very complicated and difficult to track,” Burdett explained. “It’s hard to tell whether you’re getting the amount of tips you deserve. I can’t say definitely and give you a smoking gun” about whether if he suffered wage theft. “But there’s no way to say it hasn’t occurred.”

It’s cases like Burdett’s, especially common in the construction industry, that led the DAs and state Attorneys General to step up their enforcement against corporate law-breakers. Dougherty in Colorado went further. At seminars he hosted for fellow DAs on the issue, he convinced them to unanimously back state legislation to make wage theft a felony.

Colorado’s also changed its laws so that if a contractor or a subcontractor threatens workers, especially undocumented workers, who complain about wage theft, the boss is guilty of a felony, too.

“If he says ‘If you go to the police, I’ll go to ICE,’ that’s extortion.” ICE, the federal Immigration and Customs Enforcement agency, is infamous for rounding up workers—documented as well as undocumented—based on their last names or their brown skin.

Making wage theft a felony “could do the obvious: It could lead to someone sitting in jail” for robbing workers of their pay, said another DA on the panel, Jose Garza, the new DA for Austin and Travis County, Texas—and a former workers’ advocate in the Rio Grande Valley. The former congressional aide saw many varieties of wage theft down there.

Unions can help workers battle wage theft by gathering the initial evidence to start a probe, said another of the DAs, Danielle Newsome, the assistant DA who heads Philadelphia’s new worker protection unit.

“My DA said he didn’t want to target the smaller employers,” she added. That’s where a Philly building trades union came in. “For the 37 workers (involved), we needed to break down” payroll records to discover how much money, per worker, the employer took out of their pay for union dues, pensions, and health and welfare funds—and then kept for himself instead.

Then the DA’s detective “had to reach out to all 37 to confirm they didn’t give the employer permission” to pocket the money, instead. But the diversion also let her office charge the employer, and convict him, under existing anti-fraud laws, Newsome said.

Publicity also serves as a deterrent to potential wrongdoers, Crumb pointed out.

“We had a labor broker misclassifying workers, and we got the information from a community organization,” the Centro Trabajadores Unidos En La Lucha (CTUL) worker center. The workers “weren’t paid wages on time, they weren’t paid overtime, and there were no benefits.” And the broker called in federal ICE (Immigration and Customs Enforcement) agents for a raid on the construction site. ICE arrested and deported workers who complained.

The labor broker was charged and convicted of labor trafficking, debt by swindle and fraud. “Other firms quickly got the message,” Hennepin County, Minn. (Minneapolis) Assistant DA Susan Crumb noted.

EPI’s Report, How District Attorneys And State Attorneys General Are Fighting Workplace Abuses, authored by EPI Senior Fellow Terri Gerstein, lays out justifications for district and state action against wage theft, in detail. The entire hour-and-a-half session, which Gerstein moderated, is on EPI’s YouTube channel. The report’s conclusions include:

  • Criminal prosecution of violations of workers’ rights is appropriate and helps strengthen worker protection laws by establishing meaningful consequences for lawbreaking employers.“Egregious violations of workers’ rights harm workers and communities, make it difficult for honest employers to compete, and deprive public coffers of money needed for critical safety net programs. Prosecutors engaged in workers’ rights issues should continue to build on this work, and more offices should join the effort,” it says.
  • State legislatures should strengthen statutes protecting workers, and ideally create funding mechanisms for pursuing criminal cases against lawbreakers.
  • Worker organizations and advocates should build relationships with DAs and the AG in their states to draw these untapped resources into the effort to protect workers’ rights.


CONTRIBUTOR

Mark Gruenberg
Mark Gruenberg

Mark Gruenberg is head of the Washington, D.C., bureau of People's World. He is also the editor of Press Associates Inc. (PAI), a union news service in Washington, D.C. that he has headed since 1999. Previously, he worked as Washington correspondent for the Ottaway News Service, as Port Jervis bureau chief for the Middletown, NY Times Herald Record, and as a researcher and writer for Congressional Quarterly. Mark obtained his BA in public policy from the University of Chicago and worked as the University of Chicago correspondent for the Chicago Daily News.

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