For many low-wage workers, it’s not a hypothetical question.
Businesses routinely refuse to pay the correct hourly wage, dodge taxes by misclassifying workers, refuse to pay workers earned overtime, and make employees work “off the clock.” More than 2 out of 3 low-wage workers experienced at least one type of wage theft in the previous week according to a 2010 survey of 4,000 workers in low-wage industries. The estimated average amount of wages stolen annually? $2,634 out of total average earnings of $17,616. That’s like an extra 15% tax on the poorest workers!
As Mayor Gray prepares his budget, one of the most effective investments he can make in DC’s economy is to beef up enforcement of basic wage and paid leave laws designed to protect workers from wage theft.
Why do employers steal so frequently from their employees? They know that enforcement is lax, they’re unlikely to get caught, and that, even if they are investigated, they’ll face few or no penalties. And yet, DC keeps cutting the staff of the agency charged with enforcing these laws even as the enforcement needs continue to grow, from 25 investigators down to 6. Unsurprisingly, the Office of Wage-Hour isn’t keeping up with the demands of the hundreds of workers who go there because they have been cheated out of their pay.
Even when OWH is able to help a worker get their wages paid, the OWH rarely pursues any penalties or additional damages. Why? First, the measly $300 or $500 civil penalties it is allowed to assess don’t even cover the cost of the penalty hearing to collect them. Second, the OWH is failing to obtain additional liquidated damages to compensate employees for the harm caused by stolen wages because it often caves to business opposition in order to avoid litigating.
With little risk of penalties or sanctions, lawbreakers have nothing to fear. The worst that happens to them when they rip off their employees is that they have to pay what they already owed in the first place. It’s like punishing burglars by asking them just to give back the TV and call it a day!
How do we fix this broken system? We can start by requiring wage law violators pay the costs of enforcing the law just as we ask polluters to pay for the costs of environmental cleanup. That’s a much fairer solution than the status quo, which places the burden on low wage workers and honest businesses to pick up the tab for those who break the rules.
DC suffers when workers are robbed of their livelihood. By increasing penalties and requiring those found guilty of wage theft to pay the District’s enforcement costs, the Mayor could crack down on wage theft while increasing the District’s revenue. It’s a rare budget win-win.
-Ari Weisbard, Advocacy Manager, D.C. Employment Justice Center
For further recommendations on Creating Opportunities to Work in DC, please see here.