Wage Theft in America: Why Millions of Americans Are Not Getting Paid-And What We Can Do About It
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Wage Theft in America: Why Millions of Americans Are Not Getting Paid-And What We Can Do About It
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Overview
In what has been described as “the crime wave no one talks about,” billions of dollars’ worth of wages are stolen from millions of workers in the United States every year—a grand theft that exceeds every other larceny category. Even the Economic Policy Foundation, a business-funded think tank, has estimated that companies annually steal an incredible $19 billion in unpaid overtime. The scope of these abuses is staggering, but activists, unions, and policymakers—along with everyday Americans in congregations and towns across the country—have begun to take notice.
While the first edition of Wage Theft In America documented the scope of the problem, this new edition adds the latest research on wage theft and tells what community, religious, and labor activists are now doing to address the crisis—from passing state and local wage-theft bills to establishing mayoral task forces and tapping agencies that help low-wage workers in spotting wage theft.
Citing hard-hitting statistics and heartbreaking first-person accounts of exploitation at the hands of employers, this updated edition of Wage Theft In America offers concrete solutions and a roadmap for putting an end to this insidious practice.
Product Details
| ISBN-13: | 9781595588074 |
|---|---|
| Publisher: | New Press, The |
| Publication date: | 07/19/2019 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 258 |
| File size: | 2 MB |
About the Author
Read an Excerpt
CHAPTER 1
The Crisis of Wage Theft
Do not take advantage of a hired worker who is poor and needy, whether that worker is an Israelite or is a foreigner residing in one of your towns. Pay them their wages each day before sunset, because they are poor and are counting on it. Otherwise they may cry to the Lord against you, and you will be guilty of sin.
— Deuteronomy 24:14–15 (TNIV)
And O my people! Give just measure and weight, nor withhold from the people the things that are their due.
— Qur'an 11:85
A few years ago, I heard about a garment factory near my house where workers weren't making the minimum wage, or so I was told. I couldn't believe that such a place operated four blocks from where I live. I didn't even know it existed.
I'd heard about this place because some workers had visited Arise Chicago's workers' center and told their stories. In addition, I'd heard that this place was a sole subcontractor for a leading national company. I wanted to know what was going on.
With the help of Interfaith Worker Justice (IWJ) colleagues, we organized a fact-finding delegation of religious leaders to investigate what was happening. One cold Chicago morning, twenty-five of us dropped in at the factory. The place was located in a largely residential neighborhood in a small turn-of-the-century industrial building that faces the Metra train stop. There was no sign outside identifying the facility. The front door was unlocked, so we marched on up to the second floor.
Sure enough, when we opened the second door at the top of the stairs, we stepped into a small entryway, which then had a door opening to a large high-ceiling room full of Latina immigrant women huddled over sewing machines. Despite twenty-five folks, including some in clerical collars, dropping in unexpectedly, no one looked up from their machines. (I can't believe it was because they were accustomed to regular visitors.)
Despite the cold outside, the workroom was quite warm. We all imagined how hot the room would be in August. Such Chicago buildings have impressive boilers but no air conditioning.
We scoured the place looking for the manager. Once the manager got over the shock of seeing us in her place, she quickly tried to shoo us back into the lobby area. I must confess, we were not the most cooperative crowd. It took us a while to get back to the lobby.
Once back and contained, we began peppering her with questions.
"What do you pay these workers?"
"I pay them the minimum wage, $5.15 per hour."
"But this is Illinois; the minimum wage is $6.15, not $5.15."
Slapping her forehead, "Why didn't they tell me!"
"Do you provide any health insurance for the workers?"
"Well, I asked them if they wanted health insurance, but none of them did. They all get it through their husbands. Oh, and these workers are like my family. We celebrate birthdays and babies."
Meanwhile, one of our colleagues went to use the bathroom. A worker jumped up to give her a few sections of toilet paper.
So we asked the manager, "What's the deal on the toilet paper?" "Oh, I used to provide it, but the workers would steal it, so now they prefer to bring their own." Right.
But this manager was not the only culprit here. The workers claimed this garment sweatshop was sewing exclusively for Cintas, the nation's largest industrial laundry. Cintas is not a mom-and-pop shop that doesn't know any better. It is a leading national company. The Cintas website describes itself as follows:
Cintas is a publicly held company traded over the Nasdaq Global Select Market under the symbol CTAS, and is a Nasdaq-100 company and component of the Standard & Poor's 500 Index. Cintas designs, manufactures and implements corporate identity uniform programs, and provides entrance mats, restroom cleaning and supplies, promotional products, first aid and safety products, fire protection services and document management services for approximately eight hundred thousand businesses.
Cintas operates more than 420 facilities in the U.S. and Canada, including four manufacturing plants and eight distribution centers that employ more than 30,000 people.
Cintas revenues were $3.5 billion in fiscal year 2010, with a net income for the year of $216 million. Cintas was founded by Richard T. Farmer, Chairman of the Board. Scott Farmer was appointed Chief Executive Officer in 2003, and Bob Kohlhepp serves as the Chairman of the Board.
Several months after our call at the factory, IWJ published a report called "Airing Dirty Laundry" based on the delegations and other interviews; as a result, Cintas threatened to sue IWJ and all its affiliates. When I called to talk with the attorney representing the company, he told me Farmer and Kohlhepp were willing to meet with some religious leaders. At the meeting, we came with stories we had gathered from workers around the country. Farmer and Kohlhepp were prepared with their PowerPoints, their directors of contracting and diversity and health and safety, and so on. Our spokespeople included a man who had taught Kohlhepp's children in confirmation classes, a Methodist bishop, a Baptist pastor, a nun, and a few others. We brought no real expertise, just a concern for workers.
The Cintas officials assured us they had excellent subcontracting guidelines in place. We assured them that the subcontracting guidelines weren't working.
On a personal level, Farmer and Kohlhepp and their staff were all very nice and pleasant. They give generously to their churches and the community. I'm sure they are great with their own families. I'm sure they are very nice people. Oh ... and did I mention that Farmer is one of the richest men in the state of Ohio?
Still, Cintas is a part of the crisis of wage theft in the nation.
Arise Chicago's workers' center helped Cintas's subcontractor's workers file complaints for the lost wages, for the subminimum wages they received, with the Illinois Department of Labor. Eventually, the workers recovered $209,867.82 in back wages and penalties.
Cintas, as the ultimate employer of these workers, had essentially stolen over $100,000 from poverty wage workers with no benefits by allowing them to receive less than the minimum wage, the lowest amount that workers can legally be paid. This is what I mean by wage theft.
And Cintas and its subcontractor are not alone. Not by a long shot!
Billions of dollars in wages are being illegally stolen from millions of workers each and every year. The employers range from small neighborhood businesses to some of the nation's largest employers — Wal-Mart, Tyson, FedEx, McDonald's, Target, Pulte Homes, federal, state, and local governments, and many more.
Wage theft occurs when workers are not paid all their wages, workers are denied overtime when they should be paid for it, or workers aren't paid at all for work they've performed. Wage theft is when an employer violates the law and deprives a worker of legally mandated wages.
Wage theft is widespread and pervasive across all types of companies. Various surveys have found that:
• 60 percent of nursing homes stole workers' wages.
• 89 percent of nonmonitored garment factories in Los Angeles and 67 percent of nonmonitored garment factories in New York City stole workers' wages.
• 25 percent of tomato producers, 35 percent of lettuce producers, 51 percent of cucumber producers, 58 percent of onion producers, and 62 percent of garlic producers hiring farm workers stole workers' wages.
• 78 percent of restaurants in New Orleans stole workers' wages.
• Almost half of day laborers, who tend to focus on construction work, have had their wages stolen.
• 100 percent of poultry plants steal workers' wages.
Although wage theft is most pernicious when employers steal money from workers earning low wages, wage theft affects many middle-income workers too, including construction workers, nurses, dieticians, writers, bookkeepers, and many more. Wage theft affects young workers, midcareer workers, and older workers. Although some of the worst wage theft occurs when immigrant workers aren't paid minimum wage or aren't paid at all, the largest dollar amounts are stolen from native-born white and black workers in unpaid overtime.
In 2009, Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America's Cities documented results from a landmark survey of 4387 workers in low-wage industries in New York, Chicago, and Los Angeles. The results were startling. One out of four workers wasn't paid the minimum wage. Of those who worked overtime (more than 40 hours per week), 76 percent weren't paid for it. The survey found routine employer disregard for the nation's labor laws and pervasive retaliation when workers sought to complain or organize.
Millions of workers are having their wages stolen. More than three million workers aren't being paid the minimum wage. More than three million additional workers are victims of payroll theft in which their employers lie about their workers' status, calling them independent contractors when they are really employees; this means their employers aren't paying their share of payroll taxes and many workers are being illegally denied overtime pay. Untold millions more aren't being paid overtime because their employers wrongfully claim they are exempt from the overtime laws. Several million more aren't being paid for their breaks or have illegal deductions made from paychecks. The scope of these abuses is staggering.
The Economic Policy Foundation, a business-funded think tank, estimated that companies annually steal $19 billion in unpaid overtime. Labor lawyer colleagues suggest the number is much higher.
Cases of unscrupulous employers stealing wages have reached epidemic proportions. As a nation we are facing a crisis of wage theft.
Studies Demonstrate Widespread Wage Theft
The scope and pervasiveness of wage theft are confirmed by state and federal government surveys as well as academic studies. Here are some findings for particular groups of workers:
CONSTRUCTION WORKERS: More than $500 billion is spent each year on residential construction, and more than one million workers are employed in the industry. The number of workers is expected to grow significantly in the next ten years. In many cities, construction work was historically done primarily by construction firms that hired union members. These firms paid people well, and the unions made sure wage laws, as well as health and safety standards, were rigorously enforced. With a decline in unionization, construction work is now divided dramatically between union and a few other ethical high-road employers, which are concentrated in commercial building, and those construction companies that exploit workers, primarily by squeezing subcontractors, which are concentrated in residential construction.
A recent study prepared by the Fiscal Policy Institute of the construction industry in New York City found that approximately fifty thousand workers (one in four of the estimated two hundred thousand workers) are either misclassified as independent contractors instead of employees or employed by construction contractors completely off the books. Misclassifying and paying off the books are schemes for stealing wages from workers and avoiding tax obligations.
Although there are no national studies of wage violations in the construction industry, if you google "wage violations in construction," you will find hundreds of stories about it. Workers' centers regularly assist underpaid workers from the construction industry. Cristina Tzintzun, coordinator of the Workers Defense Project in Austin, Texas, confirms the problems faced by construction workers. She says, "Most construction workers we see have experienced the most egregious wage theft — they haven't been paid at all."
GARMENT FACTORY WORKERS: Wage theft is a significant problem among the nation's seven hundred thousand garment workers. Garment industry surveys in 1999 and 2000 in Los Angeles, San Francisco, and New York City showed overall compliance rates of 33 percent, 74 percent, and 35 percent, respectively. Fewer than half of garment factories surveyed in Los Angeles were paying minimum wage. The average back wages (the amount of wages that were owed because what was paid was not enough according to the law) owed per shop were more than $4000 in Los Angeles and $12,000 in New York City. Although subsequent surveys in the garment industry in 2001 did show improvements in compliance and reduction in the seriousness of violations, garment workers continue to have their wages stolen. It is an industry sorely in need of regular oversight and enforcement.
For example, Laundry Room Clothing in Westminster, California, run by Milton and Sharon Kaneda, produced goods for national retailers including Forever 21 and Ross Stores, Inc. The 115 lowwage workers were cheated of $380,000 in minimum wage and overtime compensation from 2009 to 2010.
NURSING HOME WORKERS: Almost six hundred thousand nursing assistants work in nursing homes. These are difficult jobs with high turnover rates because they are physically demanding, pay little, and provide few benefits. The national hourly rate for a nursing home certified nurse assistant (CNA) is $10.33. The annual salary for a CNA averages only $23,716 per year.
The U.S. Department of Labor's Wage and Hour Division's 2000 Nursing Home Compliance Survey found only 40 percent overall compliance, meaning that 60 percent of nursing homes surveyed had cheated workers of wages. The FY 2004 Annual Report of the Department of Labor showed compliance rates in nursing homes had risen to 55 percent, which is still low. The biggest problems were with workers not getting paid for the overtime they had worked. According to the Nursing Home 2000 Compliance Survey Fact Sheet, most overtime violations occurred because the nursing homes misclassified workers as exempt workers, when they should have been nonexempt. (For a detailed explanation of the misclassification problem, see Chapter 2.) Other problems included not compensating workers for hours worked during their meal breaks, failing to include bonuses or shift differential payments into the employees' regular rate of pay (base rate for "time-and-a-half" computation), being paid straight time for overtime hours worked (the regular wages instead of the wages times 1.5), and failing to pay for pre- and postshift work.
The bottom line here is that more than half of nursing homes surveyed are violating wage and hour laws. The workers most affected are CNAs. These are the hardworking people who push patients in wheelchairs, lift them in and out of beds, help them to the bathroom, wash them, and serve them. These workers care for our family members. These same workers are not receiving all their pay. So if you have a loved one in a nursing home, the odds are good that the nursing home is cheating some of its workers of their pay.
FARM WORKERS: The roughly two million farm workers are among the poorest and most hardworking workers in the nation. They plant, tend, and harvest the food we eat. Unfortunately, things are not much different from when the famous 1960 CBS television documentary Harvest of Shame shocked the nation by showing slavelike working and living conditions for farm workers. The median hourly wage for farm workers is $7.95, but farm workers usually don't work year-round. As a result, most farm worker families, despite working hard and doing work essential for the society, live well below the poverty line.
One visit to most farm labor camps will convince you that something is dreadfully wrong in our society. In 2007 I visited a farm labor camp with a Farm Labor Organizing Committee (FLOC) organizer in North Carolina. The "camp," a long squat building, looked like a converted chicken coop. There was no heat and certainly there was no air conditioning. The floors were concrete. The walls were just unpainted boards. The building was divided into five or six large rooms. One was the kitchen with a couple of stoves, a couple of fridges, and a long wooden picnic table for eating. Food was piled in open shelves. This room and all others had dreary lightbulbs hanging from the ceiling, but somehow no light seemed to enter the few windows. The kitchen was dirty and unpleasant.
The bathroom was the worst — a long row of toilets and a few showers. There were no stalls, no shower curtains — no privacy of any sort.
There were a few dormitory-type rooms with eight to ten beds lined up in each. Workers didn't even have a dresser or a table for personal belongings.
Because the inside conditions were so horrible, most of the farm workers hung out outside. The workers were all immigrants from Chiapas, Mexico, and with one or two exceptions, all were very young. They had come to the United States to harvest our crops because their own families were starving and needed income. They were in North Carolina picking tobacco. They were not being paid minimum wage.
(Continues…)
Excerpted from "Wage Theft in America"
by .
Copyright © 2011 Kim Bobo.
Excerpted by permission of The New Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
Title Page,
Acknowledgments,
Introduction,
Wage Theft,
Chapter 1 - The Crisis of Wage Theft,
Chapter 2 - How Employers Steal Wages,
Chapter 3 - Payroll Fraud,
Chapter 4 - Why Employers Steal Wages,
Vehicles for Stopping Wage Theft,
Chapter 6 - Organizing to Stop Wage Theft: Why Unions Matter,
Chapter 7 - Workers' Centers: Front Lines against Wage Theft,
Chapter 8 - Business Leaders Challenge Wage Theft,
Strengthening Enforcement,
Chapter 9 - Leadership Matters: Lessons from Frances Perkins,
Chapter 10 - The U.S. Department of Labor: More Important Than Ever,
Chapter 11 - Strengthening State Enforcement,
Chapter 12 - Strengthening Local Enforcement,
What You Can Do to Stop Wage Theft,
Chapter 13 - Stopping Wage Theft Is Good for America,
Chapter 14 - You Can Make a Difference,
APPENDICES,
Notes,
Copyright Page,