Experts Say Wage Theft Claims Boom Across The Country
According to a recent article in the New York Times, the numbers of wage theft cases are rising dramatically across the country. The reasons appear complicated and are in dispute, but the result is clear: the amount of money recovered for workers has reached record levels.
Officials in New York and California interviewed for the article noted that both states had recently hit record levels of wage claim recoveries. In New York, the Attorney General’s Office has recovered $17 million in wage theft cases in only the past three years. The AG’s Office described many of the cases as surprisingly abusive and petty, most representing cut corners aimed at saving employers a relatively small amount of money.
In California, several recent wage theft decisions have been handed down, costing employers a good deal of money. In one recent instance, the State Labor Commissioner ordered a janitorial company to hand over more than $330,000 in back pay to some 41 workers who had been forced to sign blank time sheets by their employer. The employer then used the blank time sheets to record incorrect and minimal work hours, avoiding paying any of the workers for overtime they were due.
In a potentially critical case, a federal appeals court in California just decided that FedEx was also guilty of committing wage theft, largely by intentionally classifying employees as independent contractors. The misclassification was an attempt by FedEx to avoid paying overtime to its drivers who routinely work more than 10 hours a day.
David Weil, the director of the U.S. Labor Department’s wage and hour division, says that wage theft claims across the country are surging. In fact, his agency has uncovered nearly $1 billion in unpaid wages since 2010 alone. According to Weil, the reason for the rise in wage theft claims has a lot to do with changes in the country’s business structure. Employees are increasingly working for franchises, subcontractors or temp agencies, which are all forced to squeeze costs by the larger companies that they contract with. This structure also works to the benefit of these larger companies by allowing them to deny direct knowledge of any wage violations.
A good example of this is the recent $21 million settlement with Schneider, a major national trucking company that operated warehouses on behalf of WalMart. Schneider, not WalMart, directly employed the workers in charge of unloading crates of products shipped in from China, a complicated structure that allowed WalMart to skirt liability when it was revealed that workers who would often work seven days in a row at more than 60 or 70 hours a week, were never paid overtime, something required by law.
The Schneider case illustrates a point made by Weil, that the victims of the wage theft are disproportionately immigrants, a group that is easily victimized and often afraid to raise questions or concerns for fear of retaliation. However, other labor law experts say that wage theft claims are becoming increasingly commonplace among not just minimum-wage workers, but also middle-class employees who are regularly made to feel the financial squeeze of narrow profit margins, a truly worrying development that could result in even greater growth in such cases in the future.
Source: More Workers Are Claiming ‘Wage Theft’, by Steven Greenhouse, published at NYTimes.com.
Source: Employers Are Stealing Billions of Dollars a Year From Their Workers, by Danny Vinik, published at NewRepublic.com.
