Proposed legislation targets wage theft

Guest blog by Michael Paarlberg, cross-posted from the Work Studies blog of the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University

Jorge,* a Virginia construction worker, walks into the DC Employment Justice Center’s Wednesday evening legal clinic at Bread for the City in Shaw. He is one of around 40 people, both American and foreign born, who have come seeking legal advice for job-related problems. According to EJC attorney Laura Brown, on a typical night, about 25% of their clients have the same problem as Jorge, an apparently simple matter that is surprisingly hard to resolve: they were never paid.

Jorge was hired by a contractor to install drywall at a private residence. The contractor, “Sebastian,” picked him up one day at a gathering spot for day laborers, offered him the job, and drove him to the house each day, promising to pay him $1,000 at the end of the two week project. When the two weeks were up, Sebastian never showed up. Jorge wonders if he should have known better: “My buddies warned me not to work with this guy because he doesn’t pay.” You mean he’s known to pay low wages? “No, I mean he doesn’t pay his employees. At all. Ever.”

Getting ripped off by shady contractors is a common enough occurrence among day laborers that it is an expected hazard of working in such industries as construction, home repair, and landscaping. Usually there is little to no recourse. Employers are small, fly-by-night operations with no central office. Day laborers working two or three jobs do not have the time or money to seek redress through small claims courts, and it is difficult to interest attorneys in cases involving paltry sums of unpaid wages. Workers may file wage claims through their local government labor offices, such as the DC Office of Wage and Hour, but agencies are understaffed and the process can take months or longer. Often the employer is clever enough not to give the worker correct contact information. A typical wage theft case at the EJC dead ends when the client is asked how the deadbeat employer can be reached. “His name is Dave and he drives a red pickup truck,” says the client. OK, where is the house where you built the deck? “I don’t know, Dave would drive me there.”

As the National Employment Law Project, UCLA Labor Center, and UIC Center for Urban Economic Development noted in their recent study Broken Laws, Unprotected Workers, wage theft affects workers in low wage industries across the US, a practice that includes nonpayment of overtime and minimum wage, and misclassification of employees as independent contractors. Growing awareness of this problem has sparked a number of campaigns to strengthen laws to prevent it. Washington, Utah, Colorado, New Mexico, New York, Delaware and Maryland have already enacted legislation against wage theft or employee misclassification. In February, following a campaign by the Interfaith Worker Justice Movement, Miami-Dade County became the first county in the US to outlaw wage theft by authorizing county officials to step in and collect wages should an employer fail to pay or bounce a check. San Francisco enacted a similar bill, and there are active campaigns for wage theft legislation in Los Angeles, Chicago, New Orleans and Fayetteville, Arkansas.

Building on this momentum at the state and local level, Rep. George Miller has introduced a new bill in Congress, the Wage Theft Prevention Act. This law would lift the statute of limitations on investigations by the Department of Labor into cases of wage theft, which is currently set at two years. (Currently, should a case remain unresolved after two years – a real possibility for understaffed local labor agencies – all charges are dropped.) Two years is a long time to wait for a paycheck. But should enforcement improve, so too might the reliability of work for other drywall installers such as Jorge.

*This is a fictional name, changed to protect the subject’s privacy.

Learn more at the Kalmanovitz Initiative for Labor and the Working Poor.