Wage Theft Confidential: Finding Solutions

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. Milkman says putting more funding and staff into enforcement is a crucial component of stopping wage theft. Darío Maciel of Human Impact Partners, an organization behind the Health Impact Assessment of the Proposed Los Angeles Wage Theft Ordinance, says “putting together a wage theft fund and a wage theft bureau” in L.A. could help the city reduce wage theft.

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Unlike Los Angeles, San Francisco has a local agency dedicated to enforcing labor laws. Miranda Dietz of the U.C. Berkeley Labor Center points to that city’s Office of Labor Standards Enforcement (OLSE) as a strong example of how San Francisco has addressed wage theft.

“Workers who have been victims of wage theft will file a complaint with the office,” Dietz tells Capital & Main. “They talk to the worker and then they actually investigate.”

OLSE investigations “look at the entire employer,” Dietz says. According to a report from the City of San Francisco, the OLSE method of responding to complaints by looking into a business operation as a whole preserves complainant privacy and often reveals other instances of wage theft. Investigators with the OLSE make workplace visits and review employers’ books for discrepancies.

“I think tougher penalties for employers who steal from their employees is another way we can strengthen labor laws,” says Maciel, suggesting classifying wage theft as a misdemeanor and revoking city permits from violators as examples. Rebecca Smith, a deputy director with the National Employment Law Project (NELP), says penalties need to be “high enough that employers loose the incentive to violate the law,” likening wage theft to an “interest-free loan” for employers who do not face serious consequences. Catherine Ruckelshaus, General Counsel and Program Director with NELP, stresses the importance of being “strategic about targeting repeat offenders of wage theft.”

The flipside of increasing consequences for unfair employers is strengthening protections for workers. Nikki Fortunato Bas, Executive Director of the Partnership for Working Families, says Oakland’s recently passed Measure FF is a significant piece of new legislation in the fight against wage theft because it addresses “minimum wage, paid sick leave and wage theft,” in the same measure. “What’s really groundbreaking about the Oakland measure is that it combines these three really important standards for workers,” she says. The law directly responds to wage theft by specifying that tips given to service industry employees must go to the workers and not their employers.

In low-wage industries where workers are living from paycheck to paycheck, confronting an employer about wage theft can be daunting, especially for undocumented workers.

“Often times employers will threaten to have immigration called on them,” says Fortunato Bas. According to Maciel, giving U visas to undocumented workers who have had their wages taken is one strategy that could encourage them come forward. Usually granted to undocumented victims of serious crimes, U visas would protect workers from deportation, allowing authorities greater leverage to go after cheating bosses.

Experts also believe that turning to community organizations, such as worker centers, can help government agencies police wage theft. Milkman says these groups can act as “the eyes and ears of the enforcement agents.” Given their direct involvement with workers who experience wage theft, and their deep ties to local communities, worker centers and community groups often hear about wage theft before government agencies do. Involving local organizations to advocate for workers can also help “ensure that enforcement is led by the affected community,” adds Smith. Maciel says community organizations can also help run wage-theft clinics to educate workers about the problem and help them file claims.

Milkman thinks enforcement could use a major attitude adjustment. She calls for the “kind of vigilance that we see with things like jaywalking,” pointing out how traffic laws are policed much more strictly than wage and hour violations.

“If that approach were taken with wage theft I think it would diminish dramatically,” she says.

Note: In an earlier version of this story an editing error incorrectly credited the infographic’s creators as Health Impact Partners. The correct credit is Human Impact Partners.