More Wage Theft Complaints Filed By Employees Against Their Employers

The New York Times reported recently about a surge in lawsuits by workers against their employers:

"... a flood of recent cases — brought in California and across the nation — that accuse employers of violating minimum wage and overtime laws, erasing work hours and wrongfully taking employees’ tips... Some federal and state officials agree. They assert that more companies are violating wage laws than ever before, pointing to the record number of enforcement actions they have pursued."

One possible reason why wage theft is increasing:

"... underlying changes in the nation’s business structure. The increased use of franchise operators, subcontractors and temp agencies leads to more employers being squeezed on costs and more cutting corners... companies on top can deny any knowledge of wage violations [by contractors]...".

The news story reported plenty of examples:

"... Guadalupe Rangel worked seven days straight, sometimes 11 hours a day, unloading dining room sets, trampolines, television stands and other imports... Even though he often clocked 70 hours a week at the Schneider warehouse here, he was never paid time-and-a-half overtime, he said. And now, having joined a lawsuit involving hundreds of warehouse workers..."

One wage-theft tactic is to force workers to sign blank timesheets:

"Julie Su, the state labor commissioner, recently ordered a janitorial company in Fremont to pay $332,675 in back pay and penalties to 41 workers who cleaned 17 supermarkets. She found that the company forced employees to sign blank time sheets, which it then used to record inaccurate, minimal hours of work."

Reclassifying jobs is another tactic:

"... in California, a federal appeals court ruled last week that FedEx had in effect committed wage theft by insisting that its drivers were independent contractors rather than employees. FedEx orders many drivers to work 10 hours a day, but does not pay them overtime, which is required only for employees. FedEx said it planned to appeal."

And, the wage theft problem is spreading:

"Commissioner Su of California said... My agency has found more wages being stolen from workers in California than any time in history... This has spread to multiple industries across many sectors. It’s affected not just minimum-wage workers, but also middle-class workers..."

Terrible business practices and unethical behaviors. The tiny bit of good news: more workers are learning what their rights are and are standing up for their rights.

I am not surprised at all by these mounting wage-theft allegations. Why? First, professor and former U.S. Labor Secretary Robert Reich summarized the ethical problem well in September 2013 on Twitter.com while discussing wrongdoing at the big banks:

"Fines effective only if risk of being caught x probability of being prosecuted x amount of fine > profits to be made."

Besides banks, executives in other and medium-sized businesses have done the math, too. Browse the website for the atate attorney general where you live. Some enforce wage laws vigorously. Others, not so much -- leaving it to workers to file civil suits. Low- and minimum-wage workers often don't have the funds to hire an attorney; if they know their rights. They are busy trying to survive, feed their families, and pay their bills.

Second, many unethical executives have concluded that labor laws in their states are weak. This 2013 study by NELP highlighted the problem: 83 percent of workers still had problems collecting unpaid wages -- even when they already had a court decision in their favor. That means, employers realize there are likely no consequences from violating labor laws.

Third, with any search engine you can easily find news reports about wage-theft settlements. I have reported about some recent cases in New York State: Domino's, McDonald's, and Masonry Services. Fourth, you see similar unethical behavior by executives with employer-operated retirement plans. This blog post reported about some typical cases. Overall, the U.S. Department of Labor recovered $1.2 billion in 2012 for workers. The facts speak for themselves.

What are your opinions of the wage-theft allegations?