Nearly a billion dollars were stolen in New York City last year,
and the thieves aren’t even worried about getting caught. If this were an
epidemic of street crime, the city and state would have acted long ago.
Instead, the crooks in question are corrupt bosses
who steal their employees’ earnings by paying less than minimum wage, making
them work off the clock, pilfering tips, misclassifying employees as
independent contractors, and a host of other schemes. As a result, the theft is
harder to detect. But Albany
is finally on the case. The Wage Theft Prevention Act,** introduced this week by Senator Diane Savino and Assemblyman
Carl Heastie, stiffens penalties for cheating employees out of wages,
encourages workers to come forward, and provides new avenues for investigating
and prosecuting wage theft cases – and ensuring violators will pay up. The bill
builds on the best practices of states like Ohio
and New Mexico
to not only punish wage-stealing employers but create a powerful deterrent to
cheating employees – and the public – in the first place.
The bill is particularly urgent in a time of budget
deficits and recession. New York loses hundreds of millions of dollars in
revenue when, in the process of stealing wages from their workers, employers
also underpay payroll taxes, unemployment insurance, and workers’ compensation.
Cornell University researchers estimate that
between 2002 and 2005 the state lost more than $175 million just from
unemployment insurance taxes on employees whose bosses wrongly classified them
as independent contractors.
As I recounted in January, New York’s hidden crime wave was quantified
for the first time this year with shocking research from the National
Employment Law Project. They found that more than 300,000 low-wage employees in
New York City
alone are victims of wage theft every week, with annual losses totaling nearly
a billion dollars. Workers that average only $20,644 a year see more than 15%
of their pay stolen by the boss. But as alarming as these findings are, they
don’t capture the full scope of New
York State’s
problem.
The epidemic of wage theft doesn’t stop at the city
borders, or end with low-wage employees. A 2007 study from Cornell University
found that more than 700,000 workers statewide were treated as independent
contractors by their employers even though they effectively acted as employees.
Many are middle-class employees who are not even aware of the pay and benefits
being illegally denied to them. For example, the New York State Department of
Labor reported on a mortgage service company that was wrongfully classifying
all of its loan processors as independent contractors. In another case, a movie
production company tried to pass off its part-time film editors and production
assistants as contractors. From truck drivers to construction workers,
misclassified employees throughout the state are denied overtime pay,
unemployment coverage, and access to workers’ compensation if they get injured
on the job. New York
is already taking important steps to combat employee misclassification, but the
Wage Theft Prevention Act would help the state go further, stiffening penalties
and making it easier to pursue claims.
Whether the victims are retail workers cheated out
of the minimum wage or high tech engineers robbed of their overtime despite
70-hour work weeks, New Yorkers deserve to get the pay they work hard for every
day. The Wage Theft Prevention Act will help ensure they receive it. Albany must stop looking
the other way on wage theft and pass this bill immediate.
**Make the Road New York drafted this
legislation and is leading the coalition of groups pushing for its passage.