The amount of money employers had to pay because they were found guilty of wage theft is nearly three times greater than all the money stolen in robberies, according to a new report from the Economic Policy Institute (EPI).
EPI gathered figures of money recovered for victims of wage theft — which occurs when an employer has workers perform tasks off the clock or pay for their own uniforms, violating labor laws — from the Department of Labor, state labor departments, state attorneys general, and research firms. In 2012, $933 million was paid in back wages for wage theft violations, although that figure is an under-count because there were six state departments of labor and five attorneys general the organization couldn’t contact.
Compare that to the less than $350 million stolen in all robberies, including from banks, residences, stores, and on the street in 2012. That’s not just the figure for those that were solved, but for any robbery simply reported to the police.
Even the nearly $1 billion collected is likely an under-count of the problem given that most victims don’t contract lawyers or file complaints. Relying on a study of low-wage workers in Chicago, Los Angeles, and New York, which found that workers were losing nearly $3 billion to wage theft, EPI generalized to the rest of the country and estimated that it’s robbing people of more than $50 billion each year. And even that may be a low figure, given that the three-city study found that two-thirds of workers experienced at least one form of wage theft each week, yet a recent poll of workers nationwide found nearly 90 percent of fast food workers had experienced it.
That $50 billion figure dwarfs the $14 billion taken from victims of robberies, burglaries, larcenies, and car thefts in 2012. That’s less than a third of the cost of wage theft, according to EPI’s estimations.
The workers who aren’t getting the full paychecks they deserve can’t afford to lose that money, given that many victims are in low-wage jobs like fast food and retail. A minimum wage worker who loses just a half hour of a day’s pay would end up losing 10 percent of her yearly earnings when added up, “the difference between paying the rent and utilities or risking eviction and the loss of gas, water, or electric service,” the report notes.
It’s also a problem that seems to be on the rise. The number of cases filed in federal court jumped from about 5,000 in 2008 to nearly 8,000 in 2013 and have grown more than five times the number reported 20 years ago.
Wage theft is illegal under the Federal Labor Standards Act. But clearly it still happens. So various states and cities have enacted ordinances to further crack down on it by giving investigators more resources, making it easier for workers to bring complaints, and penalizing companies found guilty of the practice. EPI suggests at the federal level beefing up investigators, withholding government business from companies found to steal wages, and increasing the penalties. The maximum civil penalty for failing to give workers at least the minimum wage or overtime pay is $1,100.