True Crime: Examining the Scourge of Wage Theft in America

Posted on 12-15-2014 by
Tags: Real Law

Brought to you by the Real Law Editorial Team

Scott Greenfield’s popular legal blog Simple Justice is published with a disclaimer. Alongside articles that comment on current issues related to criminal defense, the New York City-based attorney, counsellor at law and esteemed legal analyst declares: “Nothing in this blog constitutes legal advice. This is free. Legal advice you have to pay for.”

That’s both amusing and true—the latter observation qualified only by the fact that like other individuals, lawyers may choose in certain circumstances to provide their services without an expectation of being compensated.

Indeed, pro bono work is an important component of the legal profession.

So Greenfield might have said that legal advice is something for which you usually have to pay. But that’s quibbling. The important point is that choice in the matter of compensation for work provided should be left to the person offering their services or expertise. It should not be for others to decide.

Yet the withholding of earned pay occurs frequently across the country—at a time, as The Atlantic reported recently, when American families are already “grappling with stagnant wage growth,” and, since the Great Recession struck in 2007, “the median wage for people between the ages of 25 and 34, adjusted for inflation, has fallen in every major industry except health care.”

“Many states and cities have passed measures designed to stop it,” notes State Net® Capitol Journal editor Rich Ehisen in an article examining the subject of wage theft, “but enforcing those laws is easier said than done.”

A Pervasive Problem

In the top story for the November 24, 2014 edition, Ehisen points out that wage theft may be “one of the costliest and most pervasive crimes in America today,” according to researchers such as the National Employment Law Project.

“Some companies force employees to do many hours of their job off the clock and to work through meal breaks. They might also pay workers less than the minimum or prevailing wage or, in extreme cases, not at all,” Ehisen explains.

And that’s in addition to employers “intentionally misclassifying workers as independent contractors to avoid paying payroll or workers compensation taxes,” he says.

Other highlights from the feature article include:

  • While wage theft can affect almost anyone, the vast majority of it occurs in low-wage service-sector industries such as agriculture, construction, food service and child care.

  • According to a 2009 study by the National Employment Law Project, wage theft that year among low-wage workers in just the cities of Los Angeles, New York and Chicago totaled almost $3 billion. To put that figure in context, the total value of cash and property stolen in 292,000 theft crimes reported across the United States in 2012 was approximately $341 million, according to a survey by the Economic Policy Institute released in September 2014.

  • State laws protecting against wage theft are “almost universally inadequate,” according to the Progressive States Network, which in its 2012 report considered such factors as access to civil litigation, employer record transparency and penalties.

  • Labor advocates point out that many low-wage workers fear retaliation if they complain, and so they suffer in silence. Wage theft cases can also be tremendously difficult to prove in court, and the process is often hampered by workers, witnesses and even employers who simply fall off the radar, having moved on to other work or locales.

For the bigger picture of how wage theft is affecting workers across the country, as well as insights into efforts on the part of state lawmakers to address the issue, you can read Ehisen’s complete article.

News and Views from the 50 States

There’s more that fills each weekly edition of State Net® Capitol Journal. It’s all compiled by the expert State Net editorial staff and freely available on the State Net website or in various formats via email.

When you are pressed for time, Capitol Journal delivers an intelligent overview of current events and other important issues that matter to the legal profession.

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