Wage Theft a Bigger Problem Than Armed Robbery

In the United States when we think of crimes most of us will immediately think of the perpetrator as someone of disreputable appearance, perhaps a gang member, someone from the wrong side of the tracks. We’ll picture a drug user or a biker, often someone of different ethnicity. We rarely think that someone like us, someone who owns or manages a business, someone who lives in our neighborhood or volunteers at our church.

Yet much of what we imagine is a fairy tale just like Little Red Riding Hood. On the whole Americans will suffer more than twice as much in financial losses from their employers than from armed robbers. According the crime statistics collected by the F.B.I. in 2012 American individuals and businesses combined suffered $414 million in losses. In that same year the US Department of Labor, various state departments of labor and their attorneys general as well as private attorneys reported recovering $933 million in back wages and other stolen compensation according to the Economic Policy Institute.

The data collected by the Economic Policy Institute doesn’t include dollar amounts from Alabama, Arizona, Delaware, Indiana, Louisiana, and Vermont from which such information was unavailable. While armed robberies are almost always reported wage theft often is not; either because the employee doesn’t know to whom to report the crime or they fear that they’ll lose the job that provides for their families, so the total is likely much higher.

Here are just a two examples starting with an upscale Manhattan restaurant, reached a settlement in March 2012 with New York State Attorney General Eric Schneiderman’s office over its illegal theft of wages from 25 employees. The restaurant paid employees less than the minimum wage, failed to compensate them for overtime work, and cheated them out of tips.

Two busboys were paid no wages at all for their work and had to subsist solely on their share of pooled tips. Then, once a manager began to oversee tip distribution, their meager earnings shrank further. After checking with waitresses, they realized the manager was illegally taking a share for himself. At this point, Jacal and Suarez got in touch with an advocacy group and subsequently the attorney general’s office.

After he was sued, restaurant owner retaliated against the two known whistleblowers — first cutting their hours and then firing them. The case settlement required the restaurant to pay restitution of $25,000 to each of the two busboys and $150,000 to the other 23 workers.

In 2012, the Oregon Bureau of Labor and Industries (BOLI) dealt with repeated wage theft offenses by contractor Affordable Safe and Professional Flagging, LLC. The company routinely paid less than the prevailing wage and failed to pay overtime to employees who conducted traffic control on public construction projects. The company was forced to pay a total of $107,010.24 in back wages and disqualified from holding further state contracts for 5 years. The firm was allowed to finish its work on the current contract, which led to yet more instances of stolen wages as employees’ paychecks bounced on several occasions and most received no pay for an entire month.  In 2013, the Oregon Bureau of Labor and Industries obtained another settlement of $113,000 in back wages for 36 employees.

The Oregon example is evidence that state and federal law don’t provide sufficient penalties to dissuade repeat wage theft offenses. Unlike armed robbery stealing from your employees doesn’t incur jail time, perhaps it should.

If you or someone you know has suffered wage theft contact the Texas Workforce Commission at 800-832-9243 to file a claim.

Published in the Seguin Gazette - December 1, 2017