A new study published by the Economic Policy Institute (EPI) on December 13th finds that at least $2 billion in stolen wages was recovered for workers across the United States in 2015 and 2016.
“Wage theft is a growing and pervasive problem that robs workers of billions of dollars every year. Yet little progress has been made to address this epidemic,” stated EPI Labor Counsel Celine McNicholas who wrote the report along with Research Assistant Zane Mokhiber, and intern Adam Chaikof. The findings come from a survey of state labor departments and attorneys general, data from the U.S. Department of Labor (DOL), and information from class action settlements.
In addition the authors estimate that low-wage workers in the United States lost more than $50 billion to all forms of wage theft in 2016 though the exact amount stolen is impossible to determine due to incomplete national and state information.
Wage theft can take many forms, including minimum wage violations, overtime violations, tipped minimum violations, and employee misclassification. EPI has found that one of the largest forms of wage theft—minimum wage violations—impacts 17 percent of low-wage workers in the 10 most populous states. On average, workers suffering minimum wage violations are cheated out of $64 a week, or $3,300 annually. Workers in restaurants and bars are much more likely to suffer minimum wage violations than workers in other industries.
Although wage theft is illegal, laws protecting workers are rarely enforced. In 2016, the U.S. DOL Wage and Hour Division had around 1,000 investigators responsible for 7.3 million workplaces. The probability of any specific workplace being investigated for wage theft in a given year is around 0.01 percent. Further, a recent study found that 14 states, most of which use the federal minimum wage, either lack the capacity to investigate wage theft claims or lack the ability to file lawsuits on behalf of victims.
State and local initiatives in Minnesota, California and Washington state have taken important steps toward better enforcement, yet federal policy seems to be going in the other direction. A new rule proposed by the U.S. Department of Labor earlier in December will allow employers to legally pocket tips pooled from their servers as long as the tipped workers earn minimum wage. Servers in restaurants and bars rely on these tips to help make their income more livable. The change in policy will likely result in a double hit for workers in an industry already plagued with wage theft.
“It is the Department of Labor’s job to enforce our nation’s worker protection laws and ensure that working people are paid fairly for their labor, not create mechanisms for robbing them,” said McNicholas. “When policymakers wonder why working Americans are frustrated, they should consider the toll that wage theft takes on workers.”
You can find the report at: http://www.epi.org/publication/two-billion-dollars-in-stolen-wages-were-...
An investigation by Workday Minnesota found wage theft is larger and more widespread than most people realize. Minnesotans are losing millions of dollars every year.