Employers steal far more money from their employees than robbers steal from victims. On Wednesday, lawmakers will introduce a bill aimed at tamping down on the wage theft epidemic.
Democratic Sens. Patty Murray (WA) and Sherrod Brown (OH) with Rep. Rosa DeLauro (CT) will unveil the Wage Theft Prevention and Wage Recovery Act, a bill that would beef up existing protections and add some new provisions to make it less appealing for the country’s bosses to stiff workers on wages by refusing to pay at least the minimum wage, denying overtime pay, making people work off the clock, stealing tips, or illegally misclassifying them.
The legislation would do a number of things, but chief among them is increasing how much workers can demand back from cheating employers and making the penalties for cheating stiffer. Currently, workers can only seek back pay at the minimum wage, even if their hourly rate is above that, but the bill would allow them to recoup their full compensation. Employees could also seek triple the wages they’re owed in damages, which is currently limited to double their wages, plus interest on what they were supposed to be paid. The lawmakers also propose increasing current civil penalties and creating new ones for violating minimum wage and overtime laws, cheating on record keeping, and repeating willful violations.
Ross Eisenbrey, vice president at the Economic Policy Institute and one of the people who advised the lawmakers while they were drafting the bill, thinks these provisions could have a real impact. “By making it treble damages and raising the civil penalties, it makes it less likely that employers will take the chance,” he said. His research on the impact of different state laws aimed at combatting wage theft found that it takes tripling the damages to get employers’ attention and increase compliance with the laws; it just wasn’t happening at the double rate. “You start from a different place when what’s owed is three times,” he said.
And while it is already a crime to willfully violate minimum wage and overtime requirements, the bill would ensure that the Department of Labor refers any employer that willfully steals wages, falsifies records, and retaliates against employees who try to speak out to the Department of Justice for criminal prosecution. Eisenbrey thinks this will also dissuade employers from cheating. The last time a case was referred to the Department of Justice was decades ago, so the bill wouldn’t “leave it to the whim and the will of the Department of Labor, but actually direct them to refer these cases.”
There’s a good deal of room for improvement. When the Economic Policy Institute ran the numbers, it found that at least $933 million was paid in back wages for wage theft violations in 2012, nearly three times more than the $350 million stolen in all robberies that year. But given that the protections are weak enough that many workers don’t recover what they’re owed, it estimated that the real total amount taken through wage theft came to nearly $50 billion a year, far more than the $14 billion taken from victims of robberies, burglaries, larcenies, and car thefts. “A lot right now is not punished,” Eisenbrey said. “It’s pretty hard for workers to get a real remedy for what’s happening, which is why it’s so widespread.”
“Too many people across the country go to work every day to support themselves and their families only to have their bosses cheat them out of their hard-earned pay,” Murray said in a statement. “This bill would help even the playing field for the vast majority of businesses that are treating their workers fairly, and it would empower more workers by making sure their paychecks reflect the hours and hard work they put in on the job.”
DeLauro added, “The greatest economic challenge facing our country today is that too many people are in jobs that do not pay them enough. That issue is exacerbated by the growing epidemic of wage theft. Plain and simple—employees should be paid for their work. All of their work.”
The problem of wage theft may be growing, or workers may be more aware, given that the number of cases filed in federal court jumped from 5,000 in 2008 to 8,000 in 2013 and has more than quintupled over the last 20 years.
But taking action against an employer puts the onus of risk and resources on an employee. To really eradicate the issue, the country needs more investigators to proactively enforce current laws, Eisenbrey said. As of 2014, there were just 1,100 investigators responsible for keeping an eye on all of the country’s workplaces.