Why are workers so likely to have their wages stolen by their own employers?

You can watch EJC’s Advocacy Manager Ari Weisbard’s March 4 DOES Oversight Testimony below on video or read his written testimony (which is a little more comprehensive) below.

aritestifying“Committee Chair Barry and members of the Committee, thank you very much for the opportunity to testify on the performance of the Department of Employment Services.  My name is Ari Weisbard and I am Advocacy Manager at the D.C. Employment Justice Center.  EJC is a nonprofit organization whose mission is to secure, protect and promote workplace justice in the D.C. metropolitan area. We provide free legal advice to more than 1,200 workers a year and consistently refer many District workers to DOES’s Office of Wage-Hour.

First, I want to thank you for your leadership in passing several pieces of pro-worker legislation supported by EJC. We deeply appreciated your support of the Accrued Sick and Safe Leave Act of 2008 and, more recently, the Workplace Fraud Amendment Act of 2012, and the Unemployed Anti-Discrimination Act of 2011. These laws protect workers when they get sick, when they are misclassified by their employers, or when they are unemployed and looking for work. We look forward to your continued support for ensuring that workplace protection laws are funded in this year’s budget and fully implemented.

The performance of DOES’s Office of Wage-Hour is a critical issue for EJC. More than 400 workers have come to EJC with wage complaints in just the last two years.  Some of these workers are paid less than the minimum wage, some are illegally denied overtime, some are paid less than what they were promised, and many lose whole days or weeks of pay because their employers simply refuse to give them their paychecks. We consider all of these practices to be “wage theft,” because losing your wages is just as damaging as any other form of theft.

According to a 2009 survey of low-wage workers in three urban areas, low-wage workers lose on average $51 per week to wage theft, or $2,634 per year. That amounts to 15% of their annual income. Most of these workers are supporting at least one child.

And yet, the District is doing less than ever to combat wage theft. In 1971, the Office of Wage-Hour had a budget large enough to support a staff of 25.  Today, the Office has only three investigators. It is simply not possible with this limited a staff to adequately enforce DC’s minimum wage, unpaid wage, living wage, sick leave, and other worker protection laws.

But the issue is not merely one of adequate staffing. One recent national survey gave DC’s wage laws a grade of F due to the inadequate safeguards we provide for workers. The survey was titled “Where Wage Theft is Legal.” While stealing from your own employees isn’t technically legal here in DC, to be honest, they’re right. It may as well be. If we want to make sure that workers get paid what they’re owed, we need to address wage theft on a structural level.

Why are workers more likely to have their money stolen by their own employers than having it stolen by strangers? Why are the hundreds of employees who come forward and file wage theft complaints each year just the tip of the iceberg?

Well, most employees suffer in silence because they fear losing their jobs, especially in this economy. If the worker complains, the employer can retaliate with near impunity. So they keep working for weeks, hoping they can believe their employer’s promises to pay them eventually. And when they don’t, they can’t afford to hire a lawyer and spend months trying to get their wages back, often without success. For them, it’s throwing good money after bad.

And what happens when a worker actually does come forward and file a complaint? After months of waiting and investigating, the most they ever seem to get back is the money they were owed in the first place. No interest. No damages. No penalties. So wage theft perpetrators know they probably won’t get caught, and even when they do, they still come out ahead, with an interest-free loan from their own employees. And all those other employees who didn’t come forward? It’s like a special form of unearned loan forgiveness.

So it shouldn’t be surprising that so many employers are careful to keep their employees off the books. According to DOES, when an employer fails to keep records, even legally-required records, they’re not held accountable for any orally promised wages they owe their employees. Moreover, DOES does not believe they have the authority to assess liquidated damages and reports again this year that they have not assessed any administrative penalties or even set up the apparatus to hold formal hearings in order to impose them. Without better procedures and remedies for employees, wage theft will continue. Employees will suffer and honest employers won’t be able to compete on a level playing field.

In conclusion, we urge the Council to strengthen worker protection laws, to expand workers’ rights to a fair hearing and reasonable damages, and to adequately fund enforcement of these laws. Thank you very much for the opportunity to provide you with this testimony.”

Comments

  1. […] In his testimony, EJC Advocacy Manager Ari Weisbard thanked Chairman Marion Barry for his support on the Workplace Fraud Amendment Act of 2012, and asked for his leadership once more to protect workers from wage theft. Weisbard testified that since the Office of Wage-Hour does not enforce DC law allowing workers to collect liquidated damages for unpaid wages, “[Dishonest employers] still come out ahead, with an interest-free loan from their own employees.” […]

  2. […] In his testimony, EJC Advocacy Manager Ari Weisbard asked the 70 supporters in the room to stand up, thanked Chairman Marion Barry for his support, and asked for his leadership to protect workers from wage theft. Weisbard testified that since the Office of Wage-Hour does not enforce DC law allowing workers to collect liquidated damages for unpaid wages, dishonest employers still come out ahead, with “an interest-free loan from their own employees.” […]