Workers who have their wages stolen in Colorado will finally get some help from the state under a bill that’s headed to Gov. John Hickenlooper’s (D) desk this week.
The bill, which cleared its final legislative hurdle Monday, will give the Colorado Department of Labor and Employment (DOLE) authority to enforce wage and hour laws by assessing fines and increasing investigative resources. Under the current rules, all DOLE can do for workers who file wage theft complaints is refer them to small claims court. That means even workers who can prove wage theft — any employer action to deprive workers of pay to which they are entitled, such as manipulating timesheets or misclassifying full employees as contractors — are on their own to haul their bosses before a judge. Once Hickenlooper signs, though, the agency will be empowered to investigate the complaints, order employers to pay back wages, and tack on an additional 50 percent fine if investigators find that the theft was intentional. The bill does not impose criminal penalties, however.
But even without taking that tougher line, Colorado’s move looks like progress to Tsedeye Gebreselassie, a Staff Attorney at the National Employment Law Project (NELP). “It’s an acknowledgment that workers need multiple ways to pursue recovery of their unpaid wages,” Gebreselassie told ThinkProgress. “Retaining an attorney and going to court to recover your wages presents a lot of challenges. Many of these workers have very small claims, because they don’t get paid a lot. It’s a lot of money for them, but it might not be enough for an attorney to take their case.”
Rev. Michael Livingston, National Public Policy Director for Interfaith Worker Justice, also applauded the bill. “That’s a victory,” Livingston said. “Rather than resort only to the courts, a worker now has the authority of the state at his or her disposal.” While the law was tweaked to make it harder to deem employers willful violators of wage and hour laws, which Livingston called “unfortunate,” the broader signal it sends to workers and employers is a positive one.
“You celebrate that there’s at least something on the books now that can be built upon in future legislation,” Livingston said. “Workers won’t feel like they’re out there by themselves without the attention and concern and apparatus of the state.”
The law does not feature criminal penalties for wage theft or revoke business licenses for repeat violators, as a 2013 law in Houston does. But those concessions meant that business lobbyists who had killed similar laws in previous years stayed out of the Colorado fight in 2014, according to the Denver Business Journal.
Activists urge such harsh penalties in part because of the sheer scope of the wage theft problem — withheld pay steals more money per year than the combined haul of every store holdup and bank robbery — but also because even states with strong wage theft enforcement systems often fail to get workers their money. In California, even workers who win a judgment from the Labor Commissioner never see a cent of what they’re owed in 83 percent of cases because companies simply fold and reform under new names rather than pay up.
Giving states greater investigative and enforcement powers both supports workers who need to recovery money and signals to employers that robbing from staff won’t pay, Gebreselassie said, and that deterrent effect is crucial. “Employers look and say, well what are the chances I’m going to get caught? If you make the calculation that the risk is small, you’re going to take that chance,” she said.
That seems to be exactly what many employers are thinking around the country. Nine out of every 10 fast food workers reports experiencing wage theft. McDonald’s is being sued at both the franchise and corporate level in three states for its use of a computer system to determine when workers should be forced to work off the clock or clock out and just hang around when it’s not busy. Lawsuits have recently produced large settlements over wage theft at places like Domino’s, logistics warehouses that contract with Walmart, short-haul trucking companies, and even strip clubs.