En Español Know Your Rights
Source: Spotlight on Poverty
Subject: Workplace Justice
Type: Media Coverage

Wage Theft: New York State Cracks Down on Crime Wave Against Workers

Every payday, thousands of New York workers are robbed of their wages. According to research by the National Employment Law Project, each week more than $56.4 million is stolen from low-wage workers in New York City, Chicago, and Los Angeles alone. That adds up to almost three billion dollars each year.

The consequences of these violations are severe—for the workers, their families, and the rule of law. Yet labor law reform has been slow.

The movement to combat wage theft, however, is gathering momentum. Last year, then-New York State Governor David Paterson signed major legislation – which passed with votes from both sides of the aisle – that will protect hundreds of thousands of workers each year. The Wage Theft Prevention Act (WTPA) will significantly increase penalties and improve enforcement of the New York State laws protecting workers from wage theft.

Though not often discussed, the problem of wage theft is severe. Nationwide, over a quarter of low-wage workers receive less than the minimum wage rate required by law—60 percent of those are underpaid by more than $1.00 per hour. Seventy-six percent of low-wage workers who work more than forty hours per week do not receive the legally mandated time-and-a-half overtime rate.

Workers also have their tips stolen by employers, are denied legally mandated breaks, or suffer sexual harassment or physical violence on the job. Workers who complain of abuses are routinely subject to retaliation—firing, demotion, harassment, stalking, threats to “call immigration authorities.”

Is news of this crime wave splashed across the police blotter? Not a chance. In fact, many states’ labor laws are so weak that even those employers who get caught stealing from their workers often end up paying less than they would have had to pay if they had followed the law in the first place. Indeed, unscrupulous employers build the low risk of getting caught – and the miniscule penalties required – into the cost of doing business.

The Wage Theft Prevention Act will work to put an end to these practices by increasing penalties for violating labor law, providing greater protection to workers who speak up for themselves and their co-workers, and adding tools that the State Department of Labor (DOL) and courts can use to investigate cases and more easily collect the money workers are owed.

The WTPA increases the damages employers must pay on top of the wages owed from 25 percent to 100 percent—a real price tag that will deter violations in the first place.

Importantly, the WTPA explicitly prohibits employers from threatening workers who stand up for their rights, and the law prevents anyone from retaliating against employees who blow the whistle on violations.

The WTPA also provides that victims of retaliation will receive up to $10,000 in liquidated damages—permitting the courts and the DOL to award damages that truly compensate the harms suffered by victims of retaliation.

Winning unpaid wage cases is often not the end of a worker’s struggle for justice, however. Tracking down the assets to collect what is owed often proves an insurmountable obstacle. The worst wage thieves hide assets to evade having to pay.

The WTPA addresses the problem by giving the DOL the authority to collect asset information on employers found in violation and take recalcitrant employers to court if they refuse to give it. In addition, the WTPA provides for an automatic 15 percent increase in the total amount of a judgment if the employer fails to pay within 90 days.

These reforms will help workers like Luis Olivo**, who worked as a bagger at a Fine Fare supermarket in the Bronx for more than thirteen hours a day, six days a week for pocket change and tips for over seven years. He and those like him will now have the law behind them when they stand up for their dignity and demand that their employers follow the law.

Thanks to the Act, New York has become a leader in the nationwide fight against wage theft. The Wage Theft Prevention Act’s increased damages, stronger criminal penalties for egregious violations, and better protections for whistle blowers will change the calculation of lawless employers. Other states should follow New York’s example and enact legislation modeled on the Wage Theft Prevention Act to make sure that a good day’s work always earns workers a good day’s pay.

**Andrew Friedman is the co-executive director and Luis Olivo is a member of Make the Road New York.

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