Knock LA

On the job training is a fantastic resource: just recently my company spurred me to learn about wage theft.

The holiday season is always busy for new media companies. Branding deals fly fast and furious, products need to be sold, consumers need to be wrangled. I’ve always appreciated that part of the holidays; as an editor I pull a lot of seasonal overtime. In fact, it wasn’t until this year that I realized how much I relied on overtime to get me through the end of the year. Gifts, travel, holiday breaks all add up. I’m somewhat new at my current gig, but I figured the cycle would repeat itself and I would be able to afford a plump Christmas tofurkey.

There had been some chatter about doing weekend shifts before Thanksgiving and in the run up to Christmas, so I figured I’d be giving up some weekends. Finally, towards the end of week before Thanksgiving my post-supervisor approached me formally. He told me they were looking to run weekend shifts, either Saturday or Sunday or both. He then went on, if you want to work Saturday then we’re asking you to bill that day as next Thursday. I found this odd but wasn’t free to work Saturday anyways, so I signed up for Sunday and went about my day.

Basically, if I worked that Saturday shift I would have worked a 6 day week, and that would be full day of overtime pay if I billed accurately. If I bill for Thursday though I would be billing for a 5 day week instead, and while I would definitely get paid for the Saturday hours it would be at my normal rate.

As I thought about it, I was bothered: this didn’t seem on the up and up. I started doing some digging. I wondered, well what if I agree to not bill for overtime, does that get the company off the hook? Are they going to pay overtime since we’re technically billing for Thanksgiving day? What exactly are my options if I want to report this to the state?

No, you can’t waive your right to be paid overtime, you have to be paid the correct rate if you work the hours (CA Labor Code section 1194, specifically). No, employers don’t have to pay overtime if you are working normal hours on a holiday, but they always have to pay overtime for overtime worked on a holiday. There are some options to seek relief, but they aren’t burden free.

Luckily, or perhaps not, these answers were really easy to find, because wage theft is rampant in California. The numbers are brutal.

The Economic Policy Institute released a report in May that detailed wage theft and its impact across the 10 most populous states. They found that wage theft primarily impacts low wage workers, especially those in the service and agricultural industries. These workers disproportionately experience poverty: 6.9% of minimum wage workers in these states live below the poverty line, but 21.4% of the workers experiencing wage theft live below the poverty line. 22.9% of minimum wage workers access assistance programs like SNAP, while 33.1% of those experiencing wage theft access those programs.

Women also bear the brunt of these violations. Not only are women, especially women of color, more likely to be paid less but they are more like to experience wage theft on top of that. A minimum wage worker could be losing $3,300 a year; and for women earning minimum wage that is on annual wages of $9,900. That’s absolutely staggering to consider that 30% of an employee’s pay might be outright stolen by their employer, and this affects millions of workers everyday.

Many workers are already being penalized through part-time scheduling and flex schedules. Workers who work less than 35 hours a week are 3.5 times more likely to experience wage theft than those employed 40 hours a week. This doesn’t even take into account benefits that part-time employees may not be able to access like retirement account contributions, parental leave, sponsored healthcare plans, and paid time off.

Across these 10 states 2.4 million workers are cheated out of $8 billion worth of wages every year. If we extrapolate to the entire nation the total stolen from workers is $15 billion a year; the FBI estimates that there was $12.7 billion in property crime in 2016 (robberies, thefts, etc). Employer wage theft exceeds property crime by more than $2 billion every year.

Just think about that for a second: employers are the most effective thieves in America.

Unions present a line of defense, though, but many of the industries that are most affected are notoriously non-unionized. Unionized workers are only half as likely to experience wage theft as their non-union colleagues. It’s not perfect, but it shows the effectiveness of collective action. Atomized employees are easier to intimidate, to keep dependent, and the perverse incentives of the market will always reward abuse.

Strict regulations and enforcement of labor laws is also a proven method for combating wage theft. The 2011 California Wage Theft Prevention Act made it easier for employees to report violations and recover lost wages. Even with these increased protections only 13% of employees who win a wage theft claim against their employer ever recover their lost wages. Many owners will simply fold up shop and open another business, effectively walking away from the liability. They are effectively free to continue exploiting their employees. In 2016 the California Fair Day’s Pay Act went into effect. This update closes the loophole that allowed employers to run from their debt and allows liens to be placed on assets. Even more interesting: it makes executives and senior managers personally liable for the actions of the corporation. You could literally have your boss’s Ski-Doo seized for stealing your wages. Additionally, businesses that violate wage laws may be compelled to put up a bond to continue doing business. California is innovating these methods and making it too costly for businesses that violate these protections.

Employees have several options here in California if they have been the victim of wage theft. If you want to recover lost wages or file a compliance claim the Department of Industrial Relations is a very handy resource. Employees can file a complaint with the state to recover their lost wages, they can file complaints about possible violations initiating a field investigation, or they may outright sue their employer. If the employee wins the suit their employer is not only obligated to pay their back wages but is also responsible for interest on back wages and the employee’s attorney fees. All in all a fairly robust set of tools, but not burden free. The fear of retaliation or aversion to a long legal process keep many employees from seeking relief.

Wage theft, like most exploitation, happens more frequently to more vulnerable populations. Industries with lower wages see the most exploitation, and in many cases this is hard, even dangerous work that is already underpaid. But wage theft happens at every level, employees both white collar and blue collar are cheated by their employers. Preventing wage theft is triage, demanding collective rights and living wages is the only real solution in the current market. The right to profit does not supersede our rights to dignity in employment. When you see wage theft, when you feel pressured to not ask for what you’re entitled to, when you know your colleagues are being harmed: you should speak up, you should educate, you should agitate and organize.