Workers urge Legislature to stop wage theft

Posted by National Alliance for Fair Contracting on

By Barb Kucera, Workday Minnesota
March 2, 2017

ST. PAUL – Workers who have lost thousands of dollars to wage theft descended on the state Capitol Thursday to urge lawmakers to beef up enforcement against employers who break the law.

With only about a week left for the Legislature to hear policy bills, anti-wage theft legislation has yet to have a hearing. The measure would give the state Department of Labor and Industry more enforcement tools and an increased budget to hire four additional wage and hour investigators to do proactive outreach across the state. It would empower workers with more information and impose stiffer penalties for violators.

…

An investigation by Workday Minnesota has found wage theft in Minnesota is larger and more widespread than most people realize – and the problem is growing. The Department of Labor and Industry estimates that 39,000 Minnesota workers suffer from wage theft each year, resulting in $11.9 million in wages owed, and that’s only what goes reported. Wage theft occurs when:

  • Employers refuse to pay their employees for work performed
  • Employers violate minimum wage, prevailing wage, and overtime protections
  • Employers make unlawful paycheck deductions
  • Employers coerce employees to work off the clock
  • Employers misclassify employees as an independent contractors to avoid paying workers’ compensation and unemployment insurance

 

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OP-ED: Wage theft is preventable

Posted by National Alliance for Fair Contracting on

February 28, 2017, 05:00 AM
By Rick Bonilla

Many flaws ultimately doomed President Trump’s labor secretary nominee Andrew Puzder, but among the most serious were allegations that his own companies had failed to comply with the very same wage laws that the Labor Department is responsible for enforcing. In Puzder’s case, the issue was that his fast food companies had failed to pay workers for all the hours they had worked, including overtime.

This is called wage theft and it’s much more common and widespread than you probably think.

It also impacts far more than just workers. When businesses steal workers’ wages, they gain a competitive advantage over honest businesses that play by the rules. And, when wages are stolen, so are required payroll and income taxes that are used to fund all types of public services – services on which every taxpayer relies.

In California, wage theft costs taxpayers about $8.5 billion every year, according to the Franchise Tax Board. About 10 percent of that comes from the construction industry, where I’ve worked for much of my career.

While there are state and federal agencies tasked with enforcing labor laws – the reality is that just a fraction of the employers who cheat their workers are ever brought to justice. Many workers who are victimized never file claims. Amongst those who do and receive judgments, only about 20 percent are ever paid. Such dismal enforcement statistics really only encourage more lawbreaking.

In a construction context, it works like this. A builder or general contractor hires subcontractors to do much of the work on a project. If one of the subcontractors cheats his workers, the lead contractor or builder can legally deny having any responsibility. President Trump has done this on his own projects.

Subcontractors can then disappear, shut down, shift assets to a relative, or reform under a different name to avoid payment. And then the cycle repeats.

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Q&A: COLLABORATION IS KEY TO CRACKDOWN ON EMPLOYEE MISCLASSIFICATION

Posted by National Alliance for Fair Contracting on

Sep 20, 2016 / by Katherine C. Parris

Employee misclassification causes headaches for both workers and employers, and the federal government and the states are joining hands to ease the pain.

Misclassification often has substantial consequences for all parties involved-employers and workers, as well as the federal government and the states. Misclassifying an employee as an independent contractor may result in denial of minimum wages, overtime compensation, family and medical leave, and unemployment and workplace safety protections. Employers may face costly lawsuits and be liable for unpaid overtime and minimum wages, as well as back pay, court costs and attorneys’ fees.

For these reasons, the Department of Labor is entering into enforcement partnerships with state agencies for “information sharing and coordinated enforcement” in support of its Misclassification Initiative, according to its website.

Joint federal-state efforts likely will continue to play a large role in the future of worker misclassification enforcement as more states enter into formal agreements with the DOL.

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IRS Hiring Additional Agents, Providing Additional Resources for Misclassification Enforcement

Posted by National Alliance for Fair Contracting on

by Scott Braddock
Wed, 05/25/2016 – 7:53am

The recent announcement by the IRS Commissioner that the agency is moving forward with hiring hundreds of additional agents has sparked a debate about exactly how those new resources should be utilized. Some leaders in the construction industry have told Construction Citizen that if the government has more people on hand to enforce the law, proper classification of workers should be a priority.

Misclassification is the practice of designating an employee as a “1099 worker” or an independent contractor when that person, by law, should be compensated as an employee.

Unscrupulous employers do it as a way of sidestepping payroll taxes, unemployment taxes, and workers’ compensation insurance. Even though there are many legitimate uses of contract labor, abuse of the classification gives cheating companies an ability to submit lower bids for projects, undercutting ethical contractors who follow the letter of the law.

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Increasing enforcement at state and local levels in Massachusetts combats wage theft

Posted by National Alliance for Fair Contracting on

By CHRIS LINDAHL
Monday, February 15, 2016

NORTHAMPTON – Efforts are underway on the state and local levels in communities across Massachusetts to combat wage theft, the practice of employers denying workers the pay to which they are legally entitled.

Labor activists say wage theft is an unfortunate practice in workplaces throughout the country. It’s not uncommon for bosses to deny workers earned overtime, sick time or even the minimum wage, they say. The practice is particularly prevalent in the restaurant industry, which employs about 40 percent of all workers making at or below the minimum wage nationwide. It’s also common in the landscaping and construction industries, studies have found.

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Labor Department Sharpening Focus on Misclassification

Posted by National Alliance for Fair Contracting on

Wednesday, November 19, 2014
By K. W. Mitchell

In combating employee misclassification, the Labor Department is taking strategic misclassification enforcement to the next level by placing greater priority on measures that are tactical and swift, a department official said.

“To carry out our job, we must be prudent and strategic in our enforcement actions,” said David Weil, administrator of the Labor Department’s Wage and Hour Division.

“We need to create ripple effects that impact compliance far beyond the workplaces where we physically conduct investigations, or the organizations to which we provide outreach directly,” Weil said Oct. 31 in a blog post.

Additionally, the division needs to be persistent in discovering ways to “make our investigation of one employer resonate throughout that particular sector and influence the behaviors of employers across that entire industry, to promote compliance across networks of business organizations,” Weil said.

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$10.2M awarded to fund worker misclassification detection, enforcement activities in 19 state unemployment insurance programs

Posted by National Alliance for Fair Contracting on

WASHINGTON – The U.S. Department of Labor today awarded $10,225,183 to 19 states to implement or improve worker misclassification detection and enforcement initiatives in unemployment insurance programs.

“This is one of many actions the department is taking to help level the playing field for employers while ensuring workers receive appropriate rights and protections,” said U.S. Secretary of Labor Thomas E. Perez. “Today’s federal grant awards will enhance states’ ability to detect incidents of worker misclassification and protect the integrity of state unemployment insurance trust funds.

 

2014 Worker Misclassification Grants

State Regular High Performance Bonus  Total
California $499,792 $499,792
Delaware $27,672 $27,672
Florida $31,792 $31,792
Hawaii $500,000 $500,000
Idaho $500,000 $500,000
Indiana $500,000 $500,000
Maryland $494,600 $400,099 $894,699
Massachusetts $499,800 $499,800
New Hampshire $330,468 $330,468
New Jersey $342,222 $496,399 $838,621
New Mexico $499,970 $499,970
New York $500,000 $500,000
Oregon $500,000 $500,000
South Dakota $500,000 $500,000
Tennessee $499,260 $499,260
Texas $500,000 $775,529 $1,275,529
Utah $500,000 $327,973 $827,973
Vermont $500,000 $500,000
Wisconsin $499,607 $499,607
Totals $8,225,183 $2,000,000 $10,225,183

 

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Number of ‘Wage Theft’ Claims is Rising

Posted by National Alliance for Fair Contracting on

A growing number of lawsuits have been filed over “wage theft”, where employers allegedly violate minimum wage and overtime laws, falsely claim a lower number of work hours and take employees’ tips. Worker advocates, along with some state and federal officials, say that this wrongful practice has become far too common.

The New York Times shares the story of Guadalupe Rangel, who workers seven days straight, sometimes 11 hours a day for Schneider warehouse. He often worked 70 hours per week unloading furniture and other imports from Asia to be shipped to Walmart stores, but he says he was never paid for the time-and-a-half overtime. Rangel joined a lawsuit along with hundreds of other warehouse workers. The suit was recently settled for $21 million, resulting in over $20,000 in back pay for Rangel. “Sometimes I’d work 60, even 90 days in a row,” said Mr. Rangel to the New York Times. “They never paid overtime.”

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