Tomorrow’s Huge Wage Theft Action and Testimony Preview

Join us tomorrow when several EJC clients and allies and EJC’s Advocacy Manager Ari Weisbard will be testifying about wage theft in DC and what we can do about it. Whether or not you can come in person tomorrow, please still email Marion Barry today to tell him you support these workers.

Check back later this week for video, but for now, a preview of Ari’s testimony is here:

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

More than 400 workers have come to the 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 $2,634 per year – that’s 15% of their income—to wage theft.

Last year, a 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. In this year’s Budget Support Act, we need to do more to help the Office of Wage-Hour combat wage theft. To be effective, our enforcement system needs to accomplish three things:

1) Recovering all of the wages workers are owed, in as many cases as possible;

2) Ensuring that violators actually pay a price for breaking the law; and

3) Adequate staffing to investigate and adjudicate every wage theft claim fully and fairly.

Recovering all of the wages workers are owed

Currently, many workers report that the Office of Wage-Hour underestimates the wages owed to them, sometimes by hundreds or thousands of dollars. It seems OWH does not usually investigate whether DC’s Living Wage Act or federal prevailing wage laws apply, and instead often erroneously assumes a worker is entitled only to $8.25 an hour. When workers are promised more than that, OWH reportedly tries to talk them into just claiming the minimum wage unless they have a written contract, which is very rare. The Budget Support Act should clarify the definition of wages recoverable under DC law, which should include all wages a business promised or is legally-required to pay to the worker, not just the minimum wage, and that OWH has a duty to determine which laws may apply to each claim.

Ensuring Violators Pay a Price

Second, if we really want to prevent wage theft, we need to ensure that violators pay a real price for breaking the law. Our failure to do so explains why workers are more likely to have their money stolen by their own employers than having it stolen by strangers. Currently, DOES reports that the Office of Wage-Hour does not have the statutory authority to seek liquidated damages and also has not been pursuing penalties in any of its cases. As a result, most business who break the law come out way ahead: most of their victims don’t report the violations, fail to collect any of what they are owed, or manage to settle their claims for just a fraction of what they are owed. But even if more than a handful of workers got all of their unpaid wages, employers would still be forcing their employees to give them what amounts to interest-free loans that workers can’t afford.

It’s like the police show up when your TV is stolen and say “we probably won’t catch the thief, but if we do, how about you just buy your TV back for $20 and then we let him go?” The thief comes out ahead even when he does get caught because he gets money and gets to use your TV for free for awhile.

The way to fix this is simple: follow the lead of other states by allowing for damages up to triple the unpaid wages when businesses steal from their employees and clarify in the BSA that DOES can and should assess these damages against those who violate the law.

Adequate staffing to investigate and adjudicate every wage theft claim fully and fairly

Third, we need to ensure every wage theft claim is investigated and adjudicated fully and fairly, including all of a business’s other employees who may have suffered similar violations. 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.

Currently, these OWH investigators have only been holding “informal fact-finding conferences” for all claims. At the March, 2012 performance oversight hearing, Director Mallory explained that DOES did not yet have rules in place to hold hearings in wage theft cases and so referred cases not resolved at the administrative level to the Office of the Attorney General, though she suggested regulations for these hearings would be forthcoming.

Without a stronger administrative process in place, workers are unable to obtain fair adjudications of their claims and no penalties can be assessed. It is just as critical to fund administrative law judges to adjudicate these claims as it is to hire more OWH staff to investigate them. Without a strong enforcement process at the administrative level, workers without legal representation will not be able to obtain enforceable orders against businesses that steal their wages.

Ultimately, broader reforms of wage and hour laws will be necessary and should be considered through the normal legislative process. However, the changes I have discussed today are appropriate clarifications of DOES’s authority and should be adopted as amendments to this year’s Budget Support Act. Without these changes, we’ll be hiring people to bail water from a sinking ship. We cannot delay fixing the structural holes in how DC responds to wage theft. In this budget, we need to both fund more staff and clarify the law to provide the right disincentives for violating it.

Finally, we would like to thank you for your leadership in passing the Accrued Sick and Safe Leave Act of 2008 and the Unemployed Anti-Discrimination Act of 2011. These laws protect workers when they get sick, when they are dealing with domestic violence, or when they are unemployed and looking for work. We look forward to your continued support for ensuring that these workplace protection laws are funded in this year’s budget, strengthened, and fully implemented. Unless two full-time positions to implement Unemployed Anti-Discrimination Act are funded in this year’s Office of Human Rights budget, unemployed DC residents will continue to be subject to hiring discrimination without any recourse.

In conclusion, we urge the D.C. Council to strengthen worker protection laws, to expand workers’ rights to reasonable damages, and to adequately authorize and fund enforcement of these laws in this year’s budget. Thank you very much for the opportunity to provide you with this testimony.