The concept of wage theft is unfamiliar to most people but Rebecca Galemba has devoted her career to the research of this all too common injustice. She exposes the ways employers in various industries steal from workers in order to increase the bottom line.
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Rebecca Galemba discusses a topic that is either unknown or unnoticed by most. Wage theft is a concept that involves the hiring of others to perform work without compensation, disguised as a paying opportunity, until the promise of income is not met.
". . . workers are losing 50 billion dollars a year to wage theft - but most people haven't even heard of the problem."
"Wage theft is not exceptional. It's just one more way we've undermined workers in the name of profit and flexibility."
Transcript
When you work, you expect to be paid for it. You don't expect to be paid less than you were promised, or worse, nothing at all. -But that's exactly what's happening to millions of Americans who work in a range of industries. It's especially a problem in agriculture, construction, restaurants, garment factories, poultry plants, nursing homes, in day labor, and among independent contractors. It's called wage theft and chances are, you or someone you know has experienced it.
Wage theft occurs when individuals do not receive their legally owed wages and benefits. Wage theft can take many forms - paying below the minimum wage, withholding earned benefits, overtime, breaks or tips, mis-classifying employees as independent contractors, and even outright non-payment. The Economic Policy Institute estimates that workers are losing 50 billion dollars a year to wage theft - but most people haven't even heard of the problem. If it's hard to picture 50 billion dollars, consider the yearly economic losses to auto theft, robbery and burglary combined come to much less at 14 billion a year.
Wage theft impacts more than just the workers who don't get their wages. It lowers wages in those workplaces and across entire Industries. Plus it robs communities of tax dollars and even more broadly, it rewards cheating, undermines competition and creates a race to the bottom that hurts us all. Although wage theft impacts many Industries, my research focuses on one of the most vulnerable sectors, day laborers, most of whom are immigrants from Latin America who seek daily work for cash.
You may have seen day laborers at a worker center, at a home improvement store, or on a street corner. On a typical morning at a street corner, hiring site trucks screech to a halt and employers yell out how many workers they need and the pay rate and workers rush to the passenger side window. Day laborers may just have a couple minutes to negotiate their wages, hours and working conditions, all in competition with other workers and frequently with limited English proficiency. This rapid pace of the hiring process, unstable work, lack of immigration status and working in one of the least regulated sectors of the economy makes day laborers particularly vulnerable to wage theft as well as other forms of exploitation, harassment and victimization.
Since 2015, my research has focused on immigrant day laborers’ experiences with wage theft in Colorado. I've also trained teams of graduate students as field workers in taking them out to street corners and a worker center, El Centro Humanitario. 30 in total. We interviewed 170 day laborers and conducted a follow-up survey of over 400.
Day laborer Bernal's story demonstrates how wage theft happens. Bernal was recruited at a street corner hiring site in Denver, Colorado by an employer, who then drove him 70 miles away for a construction project. Bernal worked from 9 in the morning until late at night. When the work was completed his employment didn't pay him. What's more, he's stranded him in the parking lot, over an hour from home. The employer told him tomorrow I'll come back and pay you, I didn't bring any money. When Bernal insisted on being paid, the employer relented and gave him a check. But when Bernal went to cash that check it had no funds. So then he was stuck with a bounced check fee on top of his unpaid wages.
Bernal's story shows, in many ways, how employers try to cheat workers out of their wages. They strand them far from home. They promise to pay later. They claim they don't have the money to pay or they issue checks with insufficient funds. Employers often say that wage theft is an accident but day laborers' experiences show an intentional practice to benefit at workers' expense.
Sadly Bernal's story is not unique. My survey results found that 62% of day laborers had experienced wage theft and 19 percent just in the six months prior to being surveyed. When day laborers try to confront employers for their unpaid wages, they may stop answering the phone, change their numbers or even threaten the worker, because day laborers work informally off the books. Some employers claim to have never hired a worker at all. Some employers vaguely, or even directly threatened to call Immigration when workers speak up or complain. This is illegal but employers get away with it anyway. That's because retaliation protections are weak and immigrant day laborers don't tend to come forward because they don't trust the system. To protect them, US wage and hour laws require employers to pay wages for all work completed regardless of legal status. Otherwise, there's a perverse incentive to cheat.
However, the labor rights enforcement system is under-resourced and largely depends on individuals to come to it to pursue cases. That's a big ask for anyone and especially for vulnerable populations like day laborers. Not only does it take a good amount of legal knowledge to even know where to begin but there's also a steep opportunity costs day laborers. Worried about spending days, weeks, months, even years chasing unpaid wages when they could just be out working the next job.
They also worried about retaliation. That's why many workers never file or give up their claims. As many workers said, they don't want to go around fighting. So that continues because employers know, they're likely to get away with it. That doesn't mean that day laborers do nothing to prevent wage theft or try to upgrade their working conditions. At street corners, day laborers try to organize a wage floor to prevent undercutting and warn workers of employers with bad reputations. When they walk by, for example, they shout "this one doesn't pay" to blacklist employers who mistreated workers in the past. Other strategies include only accepting cash, not checks, and insisting on getting paid every day rather than waiting for employers who promise to pay at the end of the week or even bimonthly.
Still day laborers recognize that, due to lack of work and employers' relative power over them, there's no guarantee. Only half of day laborers who'd experienced wage theft did anything to recover their unpaid wages, including even asking the employer for the money they owed them. Just a third took the additional step of seeking assistance from others. As many workers told me and student researchers, there's nothing you can do.
Every year when I collaborate with students on this project, some students tell me that they realize that they too have experienced wage theft. Theirs are quite different positions than immigrant day laborers but they also work in industries that are prone to wage theft such as childcare, restaurants, bars, and low-paid and non-paid internships. In fact, half a million Coloradans suffer wage theft every year.
The nature of work is changing. We've seen it in the rise of freelancing, independent contracting, piece rate and part-time working contingent work. Not only has there been a resurgence of day laborers but more jobs look increasingly a lot like day labor, even if It's not what we would call them. Of course, there's a lot of flexibility and competitiveness that comes from these new kinds of jobs but there also can be risks when they're also increasingly characterized by low pay, no benefits or job insecurity. Lack of employer responsibility and are primed for labor violations like wage theft. They may be further prone to labor practices that are quite harmful and humiliating but perfectly legal US labor laws are still based on relatively traditional definitions and relationships between employers and their employees. Work arrangements that increasingly carve workers out of employee status not only lessen employers' responsibilities but make it all the more challenging to hold them accountable for labor violations as well as unsafe working conditions.
Wage theft is not exceptional. It's just one more way we've undermined workers in the name of profit and flexibility. It's critical to update labor rights enforcement to better evolve towards the changing nature of work but that's not enough. We also need to rethink and upgrade employment so that people's work can actually support their lives.
-And when we look for contractors to remodel our homes, look for childcare, or eat out at restaurants, we need to ask more questions. Not just about the quality of a job or a service or where the ingredients in our food come from, but also tune to help workers are being paid and being treated. When we see rapid construction growth in our cities, we see signs of development and of progress, but we should also ask for whom and it will cost the insecurity and risks of day laborers. We should worry, all of us, about the future of work unless we transform our approach to whose lives and labor matter.
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