Lawmakers’ vote on wage theft legislation comes down to a very simple choice

Chuck Sheketoff

Are you going to coddle those who steal millions in wages or are you going to stand up for Oregon workers and honest businesses?

With Oregon Senators expected to vote as early as this week on legislation (SB 612-A) intended to protect workers against wage theft, the Oregon Center for Public Policy has released an analysis of data of wage claims filed with state authorities. Not surprisingly, the analysis shows that the wage theft problem is extensive.

The Oregon Bureau of Labor and Industries (BOLI) received 1,664 wage complaints totaling nearly $5 million during the year spanning July 1, 2009 to June 30, 2010. Of the claims investigated over the course of the fiscal year, BOLI found that workers were owed a total of more than $2.5 million.

Wage theft can take different forms. It occurs when employers pay workers less than the minimum wage, don’t pay time-and-a-half for overtime hours, cheat on the number of hours worked, steal tips or don’t pay workers at all.

Lawmakers’ vote on wage theft legislation comes down to a very simple choice: Are you going to coddle those who steal millions in wages or are you going to stand up for Oregon workers and honest businesses?

The claims filed with BOLI are just the tip of the iceberg, because the numbers only reflect instances where workers knew of BOLI’s enforcement authority and actually filed a claim.

Workers whose wages have been stolen may not know they have recourse or may fear reprisal from their employer.

Because BOLI is constrained from pursuing some types of complaints, it is likely that the level of wage theft they find understates the extent of the problem. For instance, BOLI closes cases where they cannot locate the employer or the claimant was paid on commission and received at least minimum wage.

The construction industry is of particular concern, and that's why labor brokers working in that industry are a target of SB 612. Our friends at the Northwest Workers' Justice Project are seeing that builders increasingly have come to rely on loosely regulated construction labor brokers to supply workers.

Wage theft as a pervasive national problem came to light in a 2009 National Employment Law Project (NELP) survey of workers in low-wage industries in Chicago, Los Angeles and New York City. NELP found that more than two-thirds of those surveyed had been victim of some form of wage theft in the previous week. The study estimated that the affected workers lost an average of $2,634 annually due to the theft, out of total average earnings of $17,616.

Wage theft harms some of the most vulnerable workers and the economy. while forcing honest employers into unfair competition with those who cheat, drives down wages and labor standards and diverts dollars away from poor communities. And as a result of wage theft, the income taxes that would have been paid on the stolen wages never materialize.

Some states have begun to crack down. New York, for example, recently quadrupled the penalties for employers who steal workers’ pay.

Oregon would join the trend by enacting SB 612.

Learn more about the Coalition to Stop Wage Theft.

Will the legislature coddle or stand up?


Oregon Center for Public PolicyChuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

Comments

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    Chuck,

    It was kind of hard to read through the bill, but it looks to me like it mostly extends an existing law regarding licensed labor recruiting in agriculture to construction, and as if the major potential initial sanction is loss of license; couldn't figure out if the fines mentioned only apply to unlicensed recruiters or could kick in earlier.

    I didn't see any provision for actually restoring stolen wages to workers. Did I miss it?

    Also noticed that one of the reasons a recruiter could lose a license would be hiring persons who are not legal residents of the U.S. Since undocumented workers are among the most vulnerable I am trying to figure out if this creates counter-leverage for them, but it still seems they would risk exposure & deportation for complaining. Any thoughts?

    Are there standards in existing law now being extended to construction regarding % of end-user payment a labor contractor can take (e.g. contractor pays worker minimum, charges $11.00 per hour vs. $15.00 hour) -- difference might not be theft but is exploitation.

    Do you have any information about whether wage theft issues arise in temporary hiring in other sectors?

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    Knowing the law helps a lot. I've been in this situation, and was able to stand at the foreman's desk and tell him: You;ll pay me x for this day, y for this day and Z for this day. If you do not, I will file a complaint. I got every penny that I deserved under the law and was laid off to to "lack of work" two weeks later, which was fine with me. I've always preferred to avoid being cheated over holding on to a particular job.

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