Wage Theft (NYT, ABC News!)

by Chris Sturr | March 26, 2009

Kim Bobo, director of Interfaith Worker Justice and author of Wage Theft in America (which we excerpted here and here), appeared on Good Morning America yesterday:

Plus, Tuesday’s New York Times had a great article by Steven Greenhouse on nonenforcement of labor regulations by the Labor Department. The GAO report that is the focus of the article actually uses the term “wage theft”:

Labor Agency Is Failing Workers, Report Says

By STEVEN GREENHOUSE | March 24, 2009

The federal agency charged with enforcing minimum wage, overtime and many other labor laws is failing in that role, leaving millions of workers vulnerable, Congressional auditors have found.

In a report scheduled to be released Wednesday, the Government Accountability Office found that the agency, the Labor Department’s Wage and Hour Division, had mishandled 9 of the 10 cases brought by a team of undercover agents posing as aggrieved workers.

In one case, the division failed to investigate a complaint that under-age children in Modesto, Calif., were working during school hours at a meatpacking plant with dangerous machinery, the G.A.O., the nonpartisan auditing arm of Congress, found.

When an undercover agent posing as a dishwasher called four times to complain about not being paid overtime for 19 weeks, the division’s office in Miami failed to return his calls for four months, and when it did, the report said, an official told him it would take 8 to 10 months to begin investigating his case.

“This investigation clearly shows that Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn,” the report said. “Unfortunately, far too often the result is unscrupulous employers’ taking advantage of our country’s low-wage workers.”

The report pointed to a cavalier attitude by many Wage and Hour Division investigators, saying they often dropped cases when employers did not return calls and sometimes told complaining workers that they should file lawsuits, an often expensive and arduous process, especially for low-wage workers.

During the nine-month investigation, the report said, 5 of the 10 labor complaints that undercover agents filed were not recorded in the Wage and Hour Division’s database, and three were not investigated. In two cases, officials recorded that employers had paid back wages, even though they had not.

The accountability office also investigated hundreds of cases that it said the Wage and Hour Division had mishandled. In one, the division waited 22 months to investigate a complaint from a group of restaurant workers. Ultimately, investigators found that the workers were owed $230,000 because managers had made them work off the clock and had misappropriated tips. When the restaurant agreed to pay back wages but not the tips, investigators simply closed the case.

In another case, the accountability office found that workers at a boarding school in Montana were not paid more than $200,000 in overtime. But when the employer offered to pay only $1,000 in back wages as the two-year statute of limitations approached, the division dropped the case.

“We have a crisis in wage theft, and the Department of Labor has not been aggressive enough in recent years,” said Kim Bobo, executive director of Interfaith Worker Justice, a group that advocates for low-wage workers. “The new secretary of labor says she’s the new sheriff in town, but I’m concerned she’s facing the wild, wild West of wage theft.”

Read the rest of the article.

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