To Better Protect Workers, We Need More Wage Inspectors and Stronger Enforcement
by Jessica Schieder, 6/12/2015
Cities across the country have voted to increase the minimum wage, ensure workers can take paid sick days, and offer workers paid parental leave. But without wage and hour enforcement, employers will continue to steal employees’ wages, eroding progress toward a living wage and a better quality of life.
Wage theft happens when workers are not paid the wages they have earned. It can take multiple forms, including: employers refusing to pay workers legally required overtime wages; requiring employees to work “off the clock” and outside their shifts; misclassifying employees as contractors or managers to exempt them from worker protections; stealing tips; denying meal breaks; illegally deducting money from employees’ pay; and even deducting money for taxes and then not forwarding those funds to the Internal Revenue Service (IRS) or state tax authorities.
The national scope of the wage theft problem is unclear, but regional studies show that working people are losing significant income to employers who cheat employees out of their earnings.
We don't know the full scale of wage theft nationally because of sparse data. But regional studies and surveys show that wage theft is widespread across low-wage industries. A 2008 study of low-wage workers in New York, Chicago, and Los Angeles found that more than two-thirds of workers had experienced a pay-related workplace violation in the previous work week alone. The average worker lost $51 a week, which added up to $2,634 annually. This represents 15 percent of what their incomes would have been if existing wage laws were enforced and they were paid what they had earned.
The number of federal and state staff tasked with enforcing basic wage standards has not kept pace with the growth in workplaces and workers.
Part of the reason may be that the number of wage and hour inspectors has not kept pace with the workforce over the past several decades; as result, many workplaces go years without inspections. Wage theft violators range from mom-and-pop shops to some of the nation’s largest retailers, including Staples and Walmart.
The chart below from the Department of Labor shows how investment in labor enforcement has stagnated.
Between 1997 and 2007, the number of DOL inspectors fell by 20 percent – from 942 to 732. The Obama administration announced in 2009 it would hire 250 additional inspectors. This is the most recent federal data available, and it is now years old. We’ve contacted the Department of Labor’s media office and human resources department, in addition filing a FOIA request to determine the current number of federal wage and hour inspectors. Unfortunately, the department was only able to estimate that there approximately 1,000 wage and hour division investigators on the job today. A more precise number was unavailable due to high turnover.
These roughly 1,000 wage and hour inspectors serve the approximately 9.2 million business establishments in the United States. The number of workplaces and workers has continued to grow even as wage and hour enforcement has stagnated.
A 2010 survey of states to which 43 states and the District of Columbia responded identified another 659 state investigators focused on wage and hour enforcement, although many of these investigators only spent part of their time on wage and hour issues. A majority of states (at least 27) have fewer than 10 inspectors. Florida, for example, does not have any staff enforcing the states’ minimum wage. In some states, inspectors were responsible only for enforcing state labor laws and not trained to enforce federal regulations.
While wage and hour inspectors are able to visit workplaces without notice and without evidence of wrongdoing, because of very high inspector-to-workplace ratio, most inspections are initiated by complaints from workers. However, fear of retaliation by an employer often prevents workers from reporting health and safety concerns, abuse, or wage theft.
Another obstacle for workers experiencing wage theft is the unwillingness of some employers to provide pay stubs. Pay stubs make tracking wages and documenting violations significantly easier. Low-wage workers paid non-hourly and in cash are significantly more likely to be cheated out of the legal minimum wage for their work, according to NELP, which has lawyers across the country who help handle complaints.
Many workers are unsure of their rights. The best protection for workers against wage theft is a union. Unions have formal mechanisms to push employers and relationships with local enforcement agencies. For workers without unions, reporting multiple complaints to a community group or workers' center is another way of getting a response from public officials.
Without more staff to inspect and enforce labor standards, some unscrupulous employers will continue to steal earnings from workers. Workers need unions, workers' centers, and other associations to help them stand up for their rights and hold bad employers accountable.
Addressing the scale of wage theft across the United States will require an “all-hands-on-deck” approach to challenge the current business culture. The Department of Labor is seeking ways to expand rights education and better target enforcement – more online reporting may help. Some state labor bureaus are doing the same. Unions and community groups are exploring ways that they can take on a larger and more formal role in enforcing labor laws, working directly with local labor offices.
Without action, wage theft will continue to eat away at workers’ paychecks and violate a basic American value: an honest day's work deserves an honest day's pay.
- To file a report with the Wage and Hour Division, click here or call 1-866-4-US-WAGE (1-866-487-9243).
- To find out if you are owned wages using DOL’s Workers Owed Wages tool, click here.
- To download the DOL Timesheet App to better track wages, click here.
- To download the iDOL App to find violators in your neighborhood, click here.
For Future Reading:
Honor Working People by Making Work Safer, The Fine Print, 4/28/2015
Six Charts Explain How Workers’ Compensation Is Deteriorating, The Fine Print, 3/30/2015
"Flexibility" for Whom? Irregular Schedules, Other Practices Wreak Havoc on Workers, The Fine Print, 8/19/2014
Image in teaser from flickr user Wisconsin Jobs Now, used under a Creative Commons license.