‘Wage Theft’ Lawsuits Are On The Rise

More and more U.S. workers in California and across the nation are filing wage-theft law suits, saying their bosses illegally failed to pay wages that are rightfully owed to them.

More and more U.S. workers in California and across the nation are filing wage-theft law suits, saying their bosses illegally failed to pay wages that are rightfully owed to them.

Wage-theft, a term coined by worker advocates, happens when an employer fails to pay overtime, erases hours that have been worked, or steals gratuities such as tips from their employees.

According to the New York Times, advocates and some federal and state officials agree that more companies than ever before, whether due to competition or corporate greed, are violating wage laws. The proof lies in the record number of companies under wage-law enforcement, they say.

In one example, Schneider Logistics, a national trucking company that distributes for Wal-mart, recently had to pay $21 million in unpaid wages to 1,800 employees who worked in their warehouse from 2001 to 2013.

David Weil, the director of the Federal Labor Department’s wage and hour division, says that since 2010, his agency revealed almost $1 billion in illegally unpaid wages.

He says many companies are getting away with wage theft by passing employment responsibility to those below them such as their franchise operators, subcontractors and temp agencies – thus giving them the opportunity to deny any knowledge of wage violations.

“We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,” Weil told the New York Times.

The workers victimized, he says, are much more likely to be immigrants. One Schneider employee and mexican immigrant, Guadalupe Rangel, says he would work seven days straight, sometimes 11 hours a day, for months on end.

“They never paid me overtime,” he said.

However, some business groups say that overall, employers have demonstrated increased compliance with wage laws and that the recent suits are nothing but “opportunistic lawsuits” part of a coordinated effort by the labor force to increase hourly wages.

These suits come in the wake of recent court rulings which found that various trucking companies throughout California were guilty of wage theft after misclassifying drivers as independent contractors when, in fact, they were full time workers.

In these cases, drivers were denied benefits normally given to full-time employees such as unemployment, overtime, disability and workers’ compensation, as well as reimbursement for business expenses, among other things.

Sources

New York Times

Forbes

LA Times