How Millions of Americans Are Robbed of Their Legal Pay

Stopping scofflaws becomes more difficult as a smattering of cities and states bump up minimum wages.

How Millions of Americans Are Robbed of Their Legal Pay Photo (cc) by The All-Nite Images

Raising the minimum wage is a hot topic across the United States as local and state governments, like those in New York, Los Angeles, Seattle and Portland, Maine, approve plans to bump up the pay of their lowest-earning workers.

But according to the Associated Press, even as advocates of a higher minimum wage make progress on increases, there are still millions of Americans whose employers deny them even the current legal wage.

“Plenty of scofflaw businesses don’t pay the legal minimum now and probably won’t pay the new, higher wages either,” the AP said.

It’s estimated that more than 1.7 million U.S. workers are cheated out of earning minimum wage, two-thirds of them women. The federal minimum wage is $7.25 per hour. Some of the cheated workers are undocumented, while others are afraid to quit or file a complaint for fear of not finding another job.

The issue is enforcement. The U.S. Labor Department, which investigates wage violations, recovered more than $270 million in back wages for 270,000 workers during the last federal fiscal year, the AP said.

But the Labor Department is stretched, with just 1,000 employees to investigate 7.3 million businesses and 135 million workers for federal wage compliance. Also, because they don’t typically enforce local and state wage laws, cities and states that bump their minimum wage above the federal rate are on their own with enforcement efforts.

“A lot of states are facing that challenge now,” David Weil, administrator of the U.S. Labor Department’s Wage and Hour Division, explained to the AP. “It is very important to pass those minimum wage increases. … Then, how do we make sure workers really receive them?”

According to the Portland Press Herald, Portland’s minimum wage ordinance, which hikes pay from the state minimum of $7.50 to $10.10 an hour, puts the city manager’s office in charge of wage enforcement. Unfortunately, the ordinance doesn’t include any funding or an outline of enforcement procedures.

Portland spokeswoman Jessica Grondin told the Press Herald that the city doesn’t expect to receive many worker complaints because most Portland workers earn more than $10 per hour. Still, the city could add a designated staff person to handle wage investigations if the need is warranted, Grondin said.

Tia Koonse, a researcher at the UCLA Labor Center, predicts that a bump in legal wages without the threat of regulation could cause some businesses that previously complied with the wage laws to start underpaying workers.

“If there is not a credible threat of a compliance check, then what happens?” she said.

At my former job, one of my duties was to check construction employees’ wages for compliance with Davis-Bacon wages on federally funded projects. I never had any issues, but one of my co-workers dealt with a contractor who was cheating his employees out of thousands of dollars of wages on a project. The state had to get involved, and it was a mess.

What do you think about employers who cheat their employees of a legal wage? Share your comments below or on our Facebook page.

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