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wage theft
Over $1.5 Billion in Workers' Stolen Wages Recovered From 2021-23
"Workers who can least afford to bear the cost of lost earnings—particularly low-wage workers—are disproportionately vulnerable to wage violations," according to Economic Policy Institute researchers.
Dec 23, 2024
A report published Friday by the progressive-leaning think tank the Economic Policy Institute found that federal, state, and local efforts were able to recover more than $1.5 billion in stolen wages between 2021 and 2023.
Wage theft, which includes things like paying workers less than the legal minimum wage or denying workers their legal meal breaks, "is pervasive across all industries and income levels," according to the report's authors, "but workers who can least afford to bear the cost of lost earnings—particularly low-wage workers—are disproportionately vulnerable to wage violations."
Wage theft is extremely costly to workers. Prior research cited by the EPI report estimates that workers lose $15 billion annually from minimum wage violations alone. For comparison, FBI data shows that robberies accounted for $598 million in losses in 2018, and $482 million the year after, so less than $2 billion over a two-year period, according to the report.
Action at multiple levels of government can help recover what's lost. At the federal level, the Department of Labor's Wage and Hour Division reports that it recovered $659.8 million between 2021 and 2023, which comes out to wage recovery for 510,534 workers, and an average of $1,292 in recovered wages per worker.
As an example of this kind of enforcement effort, the authors recounted that the Department of Labor (DOL) went after four Los Angeles sewing contractors, which yielded $1.1 million in back wages and damages for over 160 garment workers.
Meanwhile, at the state level, 34 departments of labor and attorneys general recovered a total of $203.3 million over those three years. The other 16 states either did not respond, did not have the requested data, or could not provide the requested data.
Class action settlements are another important avenue for wage recovery. According to the authors, the value of the top ten wage and hour class action settlements tallied $641.3 million in 2021—putting it on par with the DOL wage recovery for the full 2021-2023 period. The report, which includes class action settlement research done by the firm Seyfarth Shaw LLP, does not include class action data for 2022 and 2023.
"This class action data illustrates that workers are more effective in recovering stolen wages on a collective versus individual basis. However, many workers are barred from joining class action cases, because they are subject to forced arbitration agreements," the authors wrote.
When it comes to policy solutions, the authors noted that there have been a number of positive enforcement changes at the state level. For example, "many states have strengthened penalties for wage theft violations, enforcing them as criminal statutes" while some have "established laws allowing victims of wage theft to obtain a lien on employer property to ensure payment of back pay."
At the federal level, the authors advocated for increased funding for DOL’s Wage and Hour Division in order to boost enforcement efforts. The division has not seen a significant funding increase in over a decade, they wrote. The authors also argue in favor of a number of pieces of legislation, including the Wage Theft Prevention and Wage Recovery Act and the Protecting Right to Organize (PRO) Act—which would strengthen the right of private sector workers to unionize and collectively bargain.
While many in the labor movement expect U.S. President-elect Donald Trump to advance an anti-worker agenda, his pick to head the Department of Labor was met with cautious optimism by some corners of the labor world. Trump tapped Rep. Lori Chavez-DeRemer (R-Ore.) for the role. She co-sponsored the PRO Act in 2023—though at least one critic called this move "mostly symbolic."
In response to the news that Trump had picked Chavez-DeRemer, EPI's Celine McNicholas wrote in November that if workers truly have an ally in her, she "will advance policies that improve workers' lives."
According to McNicholas, those include funding the Department of Labor and protecting workers' overtime pay—as well as refusing to reinstitute the Payroll Audit Independent Determination program that was instituted during the first Trump administration, which mandated that if "if an employer proactively notified DOL of the failure to pay minimum wage or overtime or for taking illegal deductions from workers' paychecks, then DOL waived all penalties and liquidated damages," according to McNicholas.
The program "essentially permits employers who have stolen workers' wages to confess and get out of jail free," she wrote.
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5 Ways Trump's Labor Secretary Pick Can Prove She's Really Pro-Worker
If workers truly have an ally in Rep. Lori Chavez-DeRemer (R-Ore.), she will advance policies that improve workers’ lives.
Nov 27, 2024
President-elect Donald Trump recently announced his nomination of Oregon Rep. Lori Chavez-DeRemer to serve as secretary of labor.
She is one of only three House Republicans to cosponsor the Protecting the Right to Organize (PRO) Act and one of only eight Republicans to cosponsor the Public Service Freedom to Negotiate Act. Both bills would help reform our nation’s badly broken system of labor law. While Rep. Chavez-DeRemer’s support for these needed reforms is encouraging, if confirmed, she will be secretary of labor for a president who steadfastly pursued an ambitious anti-worker agenda during his first term in office.
Chavez-DeRemer has stated that “working-class Americans finally have a lifeline” with President-elect Trump in the White House. If workers truly have an ally in Chavez-DeRemer, she will advance policies that improve workers’ lives. Here are a few policies that will reveal whether the second Trump administration will actually aid working-class Americans or be a continuation of his first administration’s agenda attacking workers’ rights.
If confirmed as secretary of labor, Chavez-DeRemer should not follow the playbook of Trump’s first administration that used populist pro-worker rhetoric while advancing an anti-worker agenda that proved deeply harmful to U.S. workers.
Win funding for the Department of Labor (DOL) that enables the agency to serve the U.S. workforce:DOL and other worker protection agencies have been chronically underfunded. As the workforce has grown, the budgets of these agencies have shrunk, leaving workers without effective enforcement of basic minimum wage and overtime and health and safety protections. Chavez-DeRemer should fight for and secure at least a $14 billion budget to ensure that U.S. workers have health and safety inspectors and wage and hour investigators on the job to enforce their rights.
Protect workers’ overtime: Overtime pay ensures that most workers who put in more than 40 hours a week get paid 1.5 times their regular pay for the extra hours they work. Most hourly workers are guaranteed the right to overtime pay, while salaried workers’ eligibility is based on their pay and the nature of their duties. DOL recently issued a rule to raise the pay threshold for salaried workers to be eligible for overtime, which stands to benefit 4.3 million workers. Despite this benefit to U.S. workers, corporate interest groups and conservative states challenged the rule in court. Chavez-DeRemer should fight for workers’ right to overtime and continue to defend this rule in litigation. She should not allow the Trump administration to, once again, institute a low-salary threshold for overtime eligibility that leaves millions of workers without these protections and forced to work long hours for no additional pay.
Refuse to reinstitute the Payroll Audit Independent Determination program: This program was instituted during Trump’s first administration and essentially permits employers who have stolen workers’ wages to confess and get out of jail free. If an employer proactively notified DOL of the failure to pay minimum wage or overtime or for taking illegal deductions from workers’ paychecks, then DOL waived all penalties and liquidated damages. Wage theft is rampant, costing U.S. workers as much as $50 billion each year. Any program that makes it easier and less costly for employers to steal workers’ wages is a program that hurts U.S. workers and their wages. Chavez-DeRemer should make it harder for employers to steal workers’ wages, not easier.
Promote policies to protect workers’ health and safety: DOL’s Occupational Safety and Health Administration (OSHA) is responsible for ensuring U.S. workers are safe on the job. Still, 344 workers die each day from hazardous working conditions. Under the prior Trump administration, OSHA scaled back safety inspections. Chavez-DeRemer should ensure that OSHA does not repeat this under her watch and instead expands inspections to ensure that all workers have a safe workplace. Further, she should fight to protect safety standards like the recently proposed standard protecting workers from extreme heat. Workers’ health and safety must be a priority for any secretary of labor and administration claiming to be pro-worker.
Hold employers accountable for exploiting workers: Some employers use workers’ immigration status as leverage to exploit workers, threatening them with deportation if they report violations of labor and employment laws. For workers in labor disputes, the current administration granted deferred action, which is a determination to defer removal (deportation) of an individual from the U.S. In order to qualify for deferred action, a worker’s employer must be the subject of an open investigation at a labor agency, like DOL, and the labor agency conducting the investigation must submit a letter supporting deferred action to the Department of Homeland Security which oversees the program. Deferred action helps hold lawbreaking employers accountable, and Chavez-DeRemer should continue to support this for workers whose employers are being investigated for violating the law. If she is confirmed, she should fight to ensure the Trump administration provides deferred action for workers whose rights have been violated and should work to issue letters in support of deferred action for eligible workers.
These are just a few actions Chavez-DeRemer could take to demonstrate her commitment to workers. If confirmed as secretary of labor, Chavez-DeRemer should not follow the playbook of Trump’s first administration that used populist pro-worker rhetoric while advancing an anti-worker agenda that proved deeply harmful to U.S. workers.
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House Dems Unveil Sweeping Bill to Protect Worker Rights and Safety
"This bill will help level the playing field and, once again, restore the balance of power between workers and their employers," said Rep. Bobby Scott.
Jul 26, 2024
A group of Democratic U.S. House members on Friday unveiled legislation "aimed at bolstering protections for America's workers and ensuring accountability for employers who flout labor and employment laws."
The Labor Enforcement to Securely (LET'S) Protect Workers Act was introduced by Rep. Bobby Scott (D-Va.)—the ranking member of the House Committee on Education and the Workforce—and House Labor Caucus Co-Chairs Mark Pocan (D-Wis.), Debbie Dingell (D-Mich.), Donald Norcross (D-N.J.), and Steven Horsford (D-Nev.).
The bill's sponsors said their legislation is based on the premise that "employment laws are a promise to our nation's workers" meant to "secure the most basic rights of work."
"That promise is broken," they contended. "Recent shocking revelations about massive increases in the number of children illegally overworked and trafficked into dangerous jobs—just over 85 years since the passage of the Fair Labor Standards Act, which was enacted to eliminate that very problem—is the latest example of the ways that this promise to America's workers is broken."
Across the U.S., Republican state lawmakers have been advancing legislation to remove restrictions on child labor, despite several high-profile workplace deaths of minors. At the federal level, Sen. James Risch (R-Idaho) and Rep. Jared Golden (D-Maine) last year introduced a bill that would allow 16- and 17-year-olds to work in the logging industry.
The LET'S Protect Workers Act sponsors highlighted rampant wage theft and overtime violations, workplace injuries, and union-busting by employers who "know that even if a resource-starved Department of Labor catches a violation, the penalties are a mere slap on the wrist."
"People should be able to come home at the end of the day—alive, well, in one piece, and with all the wages they worked hard to earn," the lawmakers asserted. "Children should be in schools, not dangerous workplaces, and workers should be able to organize a union without interference or the threat of retaliation from their employers."
According to House Education and Workforce Committee Democrats, if passed, the LET'S Protect Workers Act would:
- Increase civil monetary penalties for violations of child labor, minimum wage and overtime, worker health and safety, and farmworker protection standards;
- Improve mine safety and reliable funding of black lung benefits through new and increased civil monetary penalties and the option to shut down scofflaw operators;
- Set new penalties for retaliation against workers who exercise their family and medical leave rights;
- Strengthen enforcement of mental health parity requirements for employer-sponsored health plans;
- Close a loophole that allows employers to escape penalties for failing to keep records of workplace injuries if [the Occupational Safety and Health Administration] does not detect the violation within six months; and
- Create new penalties for violations of the National Labor Relations Act, consistent with the Richard L. Trumka Protecting the Right to Organize (PRO) Act.
"Every American should be fairly compensated and be able to return home safely at the end of the day," Scott said in a statement Friday. "Unfortunately, shortcomings in our labor laws enable unethical employers to exploit workers, endanger children, and suppress the right to organize—with little accountability."
"That's why I'm proud to introduce the LET'S Protect Workers Act, which will hold bad actors accountable and strengthen penalties for labor law violations," he added. "This bill will help level the playing field and, once again, restore the balance of power between workers and their employers."
In a joint statement, Dingell, Horsford, Norcross, and Pocan said that "the lack of meaningful enforcement makes it all too easy for bad faith actors to get away with illegally violating workers' rights—from firing workers for organizing a union, to allowing children to work overnight shifts, or jeopardizing workers' safety by ignoring workplace regulations."
"We're proud to join Ranking Member Scott in introducing this bill to crack down on unscrupulous employers and to ensure that workers receive the protections they deserve," the lawmakers added.
Earlier this month, nearly 50 labor organizations led by the AFL-CIO and representing a wide range of U.S. workers urged congressional Democrats to resist Republican efforts to roll back rules enacted by the Biden administration to protect worker rights amid relentless attacks by abusive employers.
Specifically, the labor groups warned that Republicans are trying to use the Congressional Review Act—which was enacted to strengthen oversight of federal rulemaking—to overturn pro-worker rules enacted by the Department of Labor and other government bodies.
Meanwhile, Republicans including former President Donald Trump—the 2024 GOP nominee—have been trying to woo U.S. workers with proposals including a tax exemption for tipped employees panned as a "
hollow promise" by experts and by inviting Teamsters president Sean O'Brien to speak at the Republican National Convention last week.
In response to Republicans' dubious courting of U.S. labor, Rep. Greg Casar (D-Texas)—who is a co-sponsor of the LET'S Protect Workers Act—recently called for holding what would be a largely symbolic vote on the PRO Act. The bill was revived last year by Scott and Sen. Bernie Sanders (I-Vt.) and, if passed, would expand labor protections including the right to organize and collectively bargain.
"If Republicans wanna talk like they're pro-worker, then let's have a vote on the PRO Act next week," Casar
said on social media last week. "Let's see which politicians are for unions and which ones are all talk. Dems are ready to vote, how about you guys?"
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