Wage Theft Epidemic Leaves Workers in Philly and Beyond Short Changed
January. 16, 2017
Information technology'south taking place throughout Philadelphia and across the country, and many people don't even know it. Simply put, workers—particularly low wage workers and immigrants—are getting screwed by their employers. Employers are stealing from their employees' paychecks, skimming off the top, stealing tips, withholding pay, shaving off hours, making illegal deductions, making people work extra hours for free…you lot name it. Information technology's called wage theft. And it's illegal. For those individuals and families who are already struggling to make ends see, wage theft tin cripple them. And because wage theft is then underreported, the practise is more widespread than yous would ever imagine.
A number of high-profile cases have helped to bring attention to this growing epidemic. For case, last year 10,000 current and past Chipotle employees filed a class activity lawsuit confronting the restaurant concatenation, alleging they were made to work off the clock for boosted hours without compensation. According to the suit, "Chipotle routinely requires hourly-paid eatery employees to punch out, and then proceed working until they are given permission to leave." This is the largest wage theft form action in history.
Just Chipotle is not alone. Terminal year, New York Chaser General Eric Schneiderman and the U.S. Department of Labor announced a $500,000 agreement with a Papa John's franchisee, whose three stores violated minimum wage and overtime laws, and took illegal deductions from 200 workers' wages past declining to fully reimburse all piece of work-related expenses. McDonald'due south was on the hook for tens of millions of dollars a franchisee stole from 500 employees; the franchisee settled for $700,000. And in 2022 the Pennsylvania Supreme Court upheld a $187 million verdict by a Philadelphia jury on behalf of Wal-Mart employees who were owed lost wages from missed paid breaks and off-the-clock work.
Meanwhile, several reports released in recent years have shed light on the scope of wage theft. A 2009 written report by the National Employment Law Project and others—Broken Laws, Unprotected Workers: Violation of Employment and Labor Laws in America's Cities—studied nearly four,400 depression-wage workers in New York City, Los Angeles and Chicago. The written report constitute that 26 percent of workers had been paid below the minimum wage, while 76 percent of those who worked over forty hours were non paid at the required time-and-a-half overtime rate. And 17 percentage of the employees worked "off the clock" either earlier or afterward their shifts. Low-wage workers in these three cities lost an estimated $56.iv 1000000 each calendar week, with the boilerplate worker losing $two,634 out of $17,616 in total earnings. The full wage theft from these three cities was close to $iii billion.
"Employers do threaten calling immigration on their workers," says Nadia Hewka, staff chaser at Community Legal Services of Philadelphia. "At that place are literally direct threats confronting my clients, when all they endeavour to practice is get their wages."
A 2022 report from the Economic Policy Found estimated that wage theft costs workers more than than $l billion annually. "All of the robberies, burglaries, larcenies, and motor vehicle thefts in the nation cost their victims less than $14 billion in 2012, according to the FBI's Uniform Crime Reports. That is well over ane-tertiary of the estimated cost of wage theft nationwide," the report said.
Locally, the Sheller Eye for Social Justice at the Temple Academy Beasley School of Police force issued a written report in 2022 on wage theft in Pennsylvania. The report discussed the diverse types of wage theft, including minimum wage violations, overtime violations, illegal deductions from a worker'due south paycheck, undercounting of hours worked, and delayed or missed payments. The authors judge that in a given workweek, 397,673 low-wage Pennsylvania workers feel a minimum wage violation, while 326,647 workers experience an overtime violation, and 257,204 workers are not paid for off-the-clock work before and later their shift. In the five counties of the Philadelphia metropolitan area, those numbers are 128,476 minimum wage violations, 105,458 overtime violations, and 83,344 of-the-clock violations. These workers lose 15 percent of their earnings due to wage theft, leading their families to brand tough decisions, "such equally whether to forego purchasing food or confront the consequences of unpaid bills for housing, utilities, and health care."
A sampling of occupations tells the real story. For example, an estimated 49 percentage of dazzler, dry cleaning and general repair workers and 66.iii per centum of childcare workers in Pennsylvania are victims of minimum wage violations in a given week. In addition, 67.8 percentage of cooks, dishwashers and food preparers and 86 percent of stock office clerks and couriers are denied overtime pay, and 72.5 percent of building services and grounds workers and 90.4 per centum of abode healthcare workers face off-the-clock wage violations.
Further, the report concluded that stolen wages deprive the state of tens of millions of dollars in tax revenue each yr, and places law constant businesses at a competitive disadvantage.
"I recollect the hardest thing about the whole issue is we know that it happens frequently, but it is completely under reported for a huge variety of reasons," says Jennifer J. Lee, banana clinical professor of law at Temple Academy Beasley School of Law. Lee heads the Social Justice Lawyering Clinic at the Sheller Heart, where she works with police force students assisting low-income people, especially low-income workers and immigrants. "The underreporting happens considering of fearfulness of retaliation, that makes a lot of sense," Lee noted, adding that while wage theft occurs across the spectrum, it is pronounced in lower paying jobs, equally "people in tenuous low wage jobs don't want to jeopardize their jobs because of remainder of ability problems. And if you're someone who doesn't have immigration status or has tenuous immigration condition, it isn't only existence fired, simply being deported." Typically, some employers will seek out immigrant workers for exploitation, on the belief they will not complain about bad working weather.
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"Conspicuously wage theft is a problem for people living paycheck to paycheck when you tin can't pay your bills and your rent, and you lot're struggling," says Nadia Hewka, staff attorney at Customs Legal Services of Philadelphia. "It appears wage theft is a bigger problem than all kinds of other theft and property crimes combined. Information technology's staggering when you think about it, because you know how many people go swept upward in little crimes, and nosotros know it is unreported because we have situations where only i or two people step forrad."
Co-ordinate to Hewka, the most common wage theft culprits include minor mom and pop pizza places, small-scale restaurants, dark-green grocers and delis, home healthcare and childcare, and low wage, unregulated environments where there is no union in identify and no i to monitor the employer's activities.
Wage theft costs workers more than $fifty billion annually. According to a 2022 written report past the Economic Policy Plant, "all of the robberies, burglaries, larcenies, and motor vehicle thefts in the nation cost their victims less than $14 billion in 2012, co-ordinate to the FBI's Uniform Criminal offence Reports. That is well over i-third of the estimated cost of wage theft nationwide."
Some other form of wage theft, Hewka notes, occurs when workers are misclassified equally independent contractors, as is the instance with nine per centum of Pennsylvania workers. Further, in the age of the "fissured workplace," there is distance between workers and their employers. Temp agencies and subcontractors come in to insulate the employer, creating uncertainty as to who writes the paychecks and who takes ultimate responsibility for workplace health and rubber, "and everyone leans on the guy above them when they're not paid." Lee noted a number of cases where employers unsuccessfully claimed their workers were independent contractors, including workers folding laundry in a laundromat, and employees on a construction site working as a subcontractor to a larger contractor.
Fortunately, there are solutions to wage theft. For example, the Sheller Center report recommended stronger penalties for employers; increasing funding to the Section of Licenses and Inspections (DLI) for enforcement of wage and hour laws; working with community groups to determine enforcement priorities, and the utilize of license revocations and wage liens for employers. Meanwhile, Philadelphia enacted a wage theft ordinance last year, allowing employees to file wage theft complaints with the City of Philadelphia'south Wage Theft Coordinator. Experts believe information technology is too soon to appraise the implementation of the ordinance and its impact.
Hewka believes the enforcement of wage laws is of import, only must be strategic and focus on certain industries where wage theft occurs. In addition, she says information technology is important for agencies to take anti-retaliation seriously. And she is concerned that under a Trump administration, immigrant workers will be concerned near coming forrard. "Employers practise threaten calling immigration on their workers. In that location are literally direct threats confronting my clients, when all they try to practise is get their wages," she says. Further, Hewka emphasizes the need to devote resources in other parts of the country for similarly situated workers.
"We need a forum for workers to organize, more unionization of workers. Workers organizing more than informally through workers' centers," Lee says. "That is crucial to overcoming that imbalance of power." Lee adds that while enforcement is of import, enforcement lonely will non piece of work, particularly if resource are limited. "We need to make consumers more aware of what is going on," she noted, using the example of the Restaurant Opportunities Centre (ROC) "Loftier Road" Diner's Guide to Upstanding Eating, which highlights restaurants with the highest wage and labor standards. "People in Philadelphia are incredibly progressive, and if they know at that place is a list of restaurants that don't pay their workers, they would respond."
Header photograph by Quinn Dombrowski on Flickr 
Source: https://thephiladelphiacitizen.org/wage-theft-epidemic/
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