How employers get away with denying workers income they used to earn.
More than 60 million U.S. workers have been shut out of the court system by companies that mandate arbitration in the event of a dispute.
ICE says immigrant detainees are only obligated to make their beds and avoid clutter. But a for-profit prison company is accused of forcing them to do much more – and for no wages.
Many migrant workers in California on H-2A temporary agricultural visas are forced to contend with unsafe working conditions, wage theft and other labor law violations.
Lawbreakers who happen to be bosses are, in cases of misclassifying employees as “contractors,” treated with an enviable amount of understanding by the IRS.
A new Congressional bill would reduce a broad range of agriculture workers to the status of “guest workers.” California’s dairy owners are ecstatic. Co-published by International Business Times.
During a six-week investigation of President Trump’s nominee for Secretary of Labor, Andrew Puzder, Capital & Main has found a widespread pattern of alleged employee abuse at CKE Restaurants, of which Puzder has been CEO since 2000.
“I want this message to be loud and clear: Until Pacific 9 reclassifies its workers, until they return our wages, until they obey the law, we will not stop the fight.”
– Amador Rojas, port truck driver
As Capital & Main reported yesterday, drivers with one of the larger trucking companies serving the ports of Los Angeles and Long Beach went on strike just before dawn Monday. They struck XPO Logistics, a major international freight transportation company, while at the same time other drivers picketed Pacific 9 Transportation as they entered the 15th week of a strike against that company.
These drivers are on the front lines of a critical fight impacting the future of work in the United States. “Misclassification,” a condition in which companies wrongly treat their workers as “independent contractors” rather than as employees, is a growing problem that is receiving increasing attention.
Truck drivers at the ports of Los Angeles and Long Beach will begin a strike at 6 a.m. today against local subsidiaries of XPO Logistics, a Connecticut-headquartered freight transportation company. The drivers are taking the action because they say that XPO misclassifies them as independent contractors rather than as employees – a practice that allows companies to claw back pay, duck labor standards and pass vehicle maintenance costs onto drivers.
Misclassification policies amount to wage theft, according to labor advocates and increasingly one-sided rulings by courts and regulatory agencies. Studies have found that between 10 and 20 percent of employers misclassify at least one employee in nearly every American industry, from construction to home care to janitorial services to transportation.
At the same time that XPO’s drivers will be walking picket lines, drivers protesting similar treatment from Pacific 9 Transportation, another freight-hauling company servicing the ports, will enter the 15th week of a strike against that business.
Why are the port truck drivers on strike? It is well known that the U.S. economy relies in part on jobs generated or networked around the imports of manufactured commodities. The Ports of Los Angeles and Long Beach form a nexus of the global supply chain, where multinational corporations focus on every opportunity to keep labor costs low and profits high. One of the unrecognized links in the global supply chain is the port truck driver.
Port truck drivers play a pivotal role in the distribution of goods that makes them a critical piece of the profit puzzle. Professional drivers work long hours hauling nearly $4 billion worth of cargo every day from American seaports for companies like Walmart, Home Depot, Target, Costco and Polo/Ralph Lauren. Yet they often receive paychecks below the minimum wage, and on occasion, end up owing money to the firms that hire them.
Due to the privatization policies of the Nixon-Reagan era,
Los Angeles may be a capital for entertainment, tourism and culture, but for many local workers L.A. is synonymous with working off the clock, unpaid overtime and other labor-law violations. L.A. workers lose an estimated $26.2 million every week to bosses who fail to pay employees what they earn. However, we can learn something from other parts of the state that have taken serious measures to curb wage theft. From raising penalties on employers who steal, to shielding workers from retaliation, there are numerous strategies that can be used to put more earnings into workers’ pockets.
When it comes to enforcing labor laws, “the main obstacle is lack of resources,” Ruth Milkman, a sociology professor at the City University of New York and co-author of a 2010 UCLA wage-theft study, tells Capital & Main. “The scale of the problem is so much bigger than the capacity of these agencies to deal with it,” she continues.
In March, seven class action lawsuits filed in California, Michigan and New York suggested that for the country’s 30 million-strong low-wage workforce, getting one’s paycheck ripped off by some of the largest and wealthiest employers in America is too often business as usual.
Contending that the McDonald’s restaurant chain had been “systematically stealing” from its workers, the suits detailed company-wide practices of managers regularly ordering employees to work off the clock, shaving hours from their time cards and not paying overtime. Three of the California suits also claimed that McDonald’s and its franchise owners illegally altered pay records and denied employees meal periods and rest breaks. Other plaintiffs alleged McDonald’s used a sophisticated computer program that monitored real-time sales volume: When sales dropped below a certain level during any given hour, attorneys said, some managers would routinely order workers from the incoming shift to not punch in for an hour or two until there were more customers.
California has roughly a dozen labor codes governing wage-theft on the books, with more proposed each year in the state legislature. Are these laws proving effective? Fausto Hernandez is one worker who doesn’t think they are. The 55-year-old native of Oaxaca, Mexico, has labored in the carwash business for a decade.
“For several years I worked at Slauson Carwash in South L.A. — 10 to 11 hours a day,” he told Capital & Main. “The employer would only pay me for three hours, never for all the hours I worked.”
According to Hernandez, he sought relief by contacting the CLEAN Carwash Campaign, a community coalition led by the United Steelworkers union. The campaign helped him file a claim with the Division of Labor Standards Enforcement (DLSE), an office of the state’s Labor Commissioner.
Workers who take such action face employer retaliation. Hernandez’s employer fired him, he said.
Wage theft is a serious yet seldom-reported crime that victimizes millions of Americans – particularly low-income and immigrant workers. Today, as part of an ongoing examination of workplace issues, Capital & Main debuts a new series focusing on wage theft, beginning with a primer on the problem by Bobbi Murray, followed by Joe Rihn’s profile of a port truck driver who works in an industry where wage theft is a daily fact of life.
The expression “wage theft” is a deceptively gentle term. Perhaps “paycheck mugging” more accurately describes the violence done to the earnings of millions of Americans each year.
If you are a target of wage theft no one pistol-whips you to acquire your valuables–but you definitely get robbed. Every week Los Angeles workers get held up for $26.2 million through unpaid overtime, being pressured to work through unpaid breaks or off the clock;
For Victor Vitela life revolves around work. A reserved man with dark hair and a powerful frame, Victor makes his living driving an 18-wheeler loaded with cargo back and forth from the ports of Long Beach and Los Angeles to the Inland Empire. His tone is matter of fact when he talks about his job with QTS Inc., a Gardena-based hauling firm. Victor often works late, until three or four in the morning, leaving just enough time to catch a few hours of sleep before the day begins again at 7 a.m. In his line of work, 20-hour days are the norm. That doesn’t leave enough time to return to his family in Ventura County, so he spends Monday through Friday living out of his truck.
Victor may spend a huge amount of time working for QTS, but you wouldn’t know it from his paycheck, which is eaten up by the kind of expenses and deductions many employers would be expected to pay – the insurance on his truck,
Readers of Capital & Main are all too familiar with wage theft and job misclassification – twin plagues that afflict American workers, especially truck drivers at the Los Angeles and Long Beach ports. Employers use wage theft to shortchange employees out of their wages and benefits by shaving hours off time cards; job misclassification, on the other hand, allows companies to deny that the people working for them are even employees at all, but freelancers who are ineligible for government-provided benefits such as unemployment insurance and workers’ compensation. By misclassifying their workers, employers do not pay the kinds of payroll taxes that provide these and other services to workers.
Now, thanks to an epic investigative series published yesterday by the McClatchy news syndicate (publisher of the Sacramento Bee), in partnership with ProPublica, these two issues have been pushed before a national audience.
California wage earners received encouraging news Wednesday when Assembly Bill 2416 (Wage Theft Recovery Act) cleared a major hurdle by passing 44 to 27 on an Assembly floor vote — three votes more than needed to move to the Senate.
The measure, introduced in February by Mark Stone (D-Scotts Valley), is modeled after a successful Wisconsin wage lien law. It is designed to tie off loopholes in California that currently allow unscrupulous businesses to evade paying monetary judgments to thousands of shortchanged, mostly low-wage workers by simply transferring ownership or even by declaring bankruptcy.
According to a 2013 study by the National Employment Law Project and the UCLA Labor Center, of the 18,683 workers who filed claims for unpaid wages with the California Division of Labor Standards Enforcement (DLSE) between 2008 to 2011, only 3,084, or 17 percent, recovered any money at all.
In 60 percent of those rulings,
The gaudy evidence of income inequality is all around us: stratospheric CEO “wages,” private plane shuttles to Coachella, gated enclaves and all the rest. But few things say “class war” more eloquently than wage theft, the practice by unscrupulous businesses of short-changing their employees by undercounting work hours or shaving off time for breaks that were never taken.
Wage theft is probably about a minute older than ancient history’s first labor handshake and partly exists because most workers who suffer it are too financially insecure to complain. Now, however, there is increasing pushback from some city and state governments, and from workers themselves –McDonald’s low-wage employees have filed class action lawsuits in several states to recover wages they allege were gouged from their paychecks.
In California, Assembly Bill 2416 (“California Wage Theft Prevention Act”), introduced by Mark Stone (D-Monterey Bay), seeks to curb wage theft by allowing workers to file liens against the real and business property of employers they claim owe them wages.
Last week, we reported on the legal struggle at port trucking company Seacon Logix, whose drivers filed claims with the California Division of Labor Standards Enforcement (DLSE) seeking reimbursement for a number of wage-and- hour violations, including illegal paycheck deductions made by the company. After the DLSE ruled in favor of the drivers in early 2012 – finding that the drivers were not independent contractors, but were actually misclassified employees – the company appealed the ruling.
On Thursday, a California Superior Court judge ruled in favor of the drivers in every respect, coming to the same conclusions as the DLSE. The court found that drivers were misclassified and ordered the company to pay the four drivers $107,802. Five additional drivers at the same company have similar claims pending.
This is the first in an anticipated wave of rulings addressing conditions for misclassified port truck drivers.
Every year millions of Americans are victims of what some call wage theft — a practice in which a company fails to compensate workers for their time, short-changes them on their benefits or intentionally misclassifies employees in order to save money. And even though all that is illegal, Kim Bobo, executive director of Interfaith Worker Justice and author of Wage Theft in America, says it’s surprisingly common in the U.S.
“Minimum wage and overtime violations are two of the most common ways that wage theft occurs. Another way is payroll fraud, when employers intentionally call people independent contractors when they are really employees. Now if your boss — not you — declares you an independent contractor, you probably aren’t one. Then there is also tip stealing. About 10 percent of tipped workers actually don’t get their tips; their employers just don’t give it to them,” says Bobo.