Report: Wage Theft, Labor Law Violations Widespread Across Country

by James Parks, Sep 4, 2009

As we celebrate America’s workers this weekend, a new study shows how hard it is for low-wage workers to make a decent living because their employers engage in wage theft and break laws on pay.

Drawing on in-depth interviews with 4,387 workers in Los Angeles, Chicago and New York City, a group of respected academics estimates that 68 percent of the workers surveyed are routinely denied proper overtime pay and often are paid less than minimum wage. The average low-wage worker lost more than $2,600 in annual income due to the violations, 15 percent of their yearly earnings.

The study, “Broken Laws, Unprotected Workers,” was released earlier this week. The  three  city  surveys  were  conducted  throughout  2008  in  eight languages  by  researchers  at  the  National  Employment  Law  Project (NELP), the  University  of California-Los Angeles, University of Illinois-Chicago, Cornell  University and Rutgers University.

Those surveyed are employed in various low-wage industries, including retail, restaurants and grocery stores, carwashes, building services and industrial laundries, home health care, child care, construction, warehousing, transportation and garment manufacturing.

The researchers cite, for example, the plight of carwash workers in Los Angeles. In February, the Los Angeles city attorney filed criminal charges against owners of four carwashes, charging them with failure to pay the minimum wage and provide employees with breaks. Dozens of carwash workers said they were paid a flat rate of $35 to $40 a day for shifts that usually lasted more than eight hours, with as little as 15 minutes a day for lunch—some worked for customer tips alone. The workers did not receive medical care for lacerations and acid burns caused by the machinery and chemicals they used. All told, these carwash workers could be owed close to half a million dollars in wages, the study estimated.

Says Nik Theodore, director of the Center for Urban Economic Development at the University of Illinois-Chicago and a co-author of the report:  

This report exposes a world of work in which the core protections that many Americans take for granted are failing significant numbers of workers. The sheer breadth of the problem suggests the country’s work laws are simply not adequate for the 21st century, and that the laws we do have are not being adequately enforced.

The study follows a report by the Government Accountability Office (GAO), which found the U.S. Department of Labor has not sufficiently protected workers or penalized employers in cases of minimum wage and other violations. Labor Secretary Hilda Solis responded to that report by announcing that the department’s Wage and Hour Division will add 250 new investigators, a staff increase of more than one-third.  

According to the “Broken Laws” report:

• One in four of the workers surveyed (26 percent) was paid below the minimum wage in a given workweek.
• Three quarters (76 percent) of those who worked overtime were not paid the required time and a half. 
• More than two-thirds (69 percent) did not get meal breaks they were entitled to.
• Seventy percent did not get any pay for work performed outside their regular shift.
• Almost all (89 percent) of in-home child care workers earned less than the minimum wage.

 Annette Bernhardt, NELP’s policy co-director, told The New York Times:

These practices are not just morally reprehensible, but they’re bad for the economy. When unscrupulous employers break the law, they’re robbing families of money to put food on the table, they’re robbing communities of spending power and they’re robbing governments of vital tax revenues.

This study also challenges the conventional wisdom that immigrant workers are the only ones who face such problems. While foreign-born Latino workers were the largest group to be shortchanged wages, all groups of workers in the survey were treated poorly. For example, women were significantly more likely than men to experience minimum wage violations, and among U.S.-born workers, African Americans had three times the violation rates of their white counterparts.

Kim Bobo, author of the book Wage Theft in America, agrees. She says it’s a myth that only undocumented immigrant workers are being denied their pay:

I’ve talked to restaurant workers who told me about having their tips taken [by the employer] and certified nursing assistants who stay over their shifts to make sure they brief their replacements on the patients’ conditions but don’t get paid for the overtime. It’s not just immigrant workers, it’s everywhere. 

The “Broken Laws” report outlines three recommendations to improve worker protections:

• Strengthen government enforcement of employment and labor laws;
• Update legal standards for the 21st century labor market by raising the minimum wage, updating health and safety standards, ending exclusions that deny workers coverage and strengthening the right of workers to organize through labor law reform; and
• Establish equal status for immigrants in the workplace.  

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