In what advocates called “a stunning win” for workers across New York state, outgoing Governor David Paterson has signed a law that escalates penalties against thieving employers and protects workers who stand up against wage theft at their jobs.
New York employers steal close to a billion dollars in wages from their employees every year, according to a recent study from the National Employment Law Project (NELP).
The legal sanctions faced by employers have been so low—back pay plus 25 percent—that there is a “perverse incentive to steal workers’ wages,” according to Make the Road New York, the advocacy group that drafted the bill and led a coalition of unions and community organizations to get it through the legislature.
“We see it as a step in the right direction, and definitely a deterrent,” said Jeff Mansfield of the Restaurant Opportunities Center of New York, which targets restaurateurs that steal wages. “It’s going to help strengthen workers’ ability to organize against employers who are doing the wrong thing.”
Under the “Wage Theft Prevention Act,” workers can get double their stolen wages back. The law also protects workers who speak up—firing or disciplining a worker who charges wage theft can carry a penalty of up to $10,000.
The penalty for retaliation is particularly significant, said Chicago anti-wage theft campaigner Kim Bobo of Interfaith Worker Justice. She said this provision makes the New York law stronger than those passed elsewhere. “This really raises the bar for what we can do in other states,” she said.
The new law also simplifies the process for making claims, according to Catherine Ruckelshaus, NELP’s legal co-director.
Under the old law, workers had to inform not just the Department of Labor, but also the attorney general’s office of their charges against their employer, and had to correctly cite the portion of the law that the employer violated. If they didn’t, employers could have the charges dismissed. Now they don’t have to contact the attorney general’s office.
More importantly, Ruckelshaus said, workers’ claims won’t expire while they wait for government action. Previously, workers lost years of unpaid wages as claims hit the two-year deadline before they had churned through the system. With the new law, which takes effect in April, the clock stops as soon as a claim is filed.
The focus on wage theft, and the phrase itself, emerged from worker center organizing in the last five years, said Bobo, who wrote a 2009 book on the subject, Wage Theft in America.
Wage theft is the primary complaint of workers who seek help at worker centers. Bringing together these experiences created momentum to specifically target the problem. Campaigns to strengthen wage theft laws in Ohio and Oregon are under way, as are several city and county initiatives.
Wage theft takes many forms, including management stealing tips, paying sub-minimum wage or no overtime premium, forcing employees to work off the clock or for tips only, and never paying final paychecks. When one restaurant worker in Detroit pointed out missing time-and-a-half pay for overtime, he was told by a manager, “We don’t offer overtime.”
This year NELP estimated that wage theft in New York state accounts for $18.4 million a week.
NELP and other groups interviewed 4,387 front-line workers in 12 low-wage industries in Los Angeles, Chicago, and New York. Their 2009 report, “Broken Laws, Unprotected Workers,” estimated the average low wage worker lost $2,600 annually to employers who illegally withheld pay.
High unemployment and fewer unions to defend workers contribute to the crisis, Bobo said.
“I talk to workers all the time who say, I know my employer should be paying overtime, but he says, ‘if you don’t like it you can find another job,’” she said.
Employers are also emboldened to steal wages in an environment of draconian immigration enforcement. Bobo said wage theft is spiking in Arizona, because workers fear their employers will call immigration authorities if they object.
Enforcement Is Up to Us
New York’s law is helpful, but “the fight still has to happen,” said Mansfield, of ROC-NY. He noted the new law doesn’t provide additional enforcement mechanisms.
“We believe in organizing as the best enforcement,” Mansfield said. When workers in a ROC campaign succeed in court, their employers are often put under a court order, and worker committees enforce the order on the job.
ROC-NY has alleged wage theft at a New York restaurant owned by celebrity chef Mario Batali. Workers charge that managers pocketed tips intended for servers at banquets hosted by Batali’s upscale restaurant Del Posto.
Outraged that ROC has led protests in front of his restaurants, Batali sued the group for $6 million in November. A judge issued an order restraining ROC from picketing his restaurants. The group is used to the treatment. A previous target, Daniel Boulud, filed a state suit—which was eventually withdrawn—accusing ROC of defamation and harassment.
“It usually means they’re close to settling,” Mansfield said.