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Wage Theft Causes a Major Crackdown By Municipalities

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By Minara El-Rahman on December 31, 2009 5:50 AM

Wage theft is on the rise as the recession continues. What exactly is wage theft? Wage theft is the illegal underpayment or nonpayment of workers' wages. Yet according to the AP, wage theft has been getting worse. It has especially affected immigrant workers who fear getting reported to immigrations authorities even if they are in the U.S. legally.

AP quotes Mr. Fabian Gutierrez as saying, "All of us took abuse. We were disrespected." He was forced to work more than 60 hours a week, paid less than minimum wage and was never paid overtime. He took the abuse because he needed to take care of his wife and daughter. He never voiced his concern because he was worried he would lose his job. Wage theft and no overtime is what workers' rights groups claim are the most often cited complaints of employers.

What Are Some Examples of Wage Theft?

According to the Interfaith Worker Justice Group, some examples of wage theft are:

  • Violations of minimum wage laws
  • Not paying overtime pay
  • Forcing workers to work off the clock
  • Misclassifying employees as independent contractors to avoid paying minimum wage and overtime (as well as employers' share of FICA tax)
  • Not paying workers at all

Why Are Employers Doing This?

A lot of employers are taking advantage of workers who are desperate to have and maintain a job. The AP quotes Nik Theodore, a professor at the University of Illinois at Chicago and lead author of the study conducted with the University of California, Los Angeles and the City University of New York as saying, "It's not confined to the margins, or a few rogue employers. Employers realize that workers are desperate. It looks like standard business practice in many industries."

What Are Local Governments Doing About This?

Local municipalities are trying to address a problem that has not yet been tackled by the federal government. States like California and New York have task forces that target industries with repeat offenders such as grocery stores and car washes.

Other states have allowed larger fines on employers who commit wage theft and allow workers to file online complaints for convenience. States that have implemented these approaches are: Washington, Oregon and Massachussetts.

While these states are doing what they can to address this growing issue, many are calling for federal reform.

In the meantime, Mr. Gutierrez is unsure that he will get all of the wages that he is owed. He told AP: "I want my voice to be heard. We don't do the work for free."

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