'Wage theft' violations soar in post-recession economy
Behind the counter of a convenience store in Princess Anne, Md., Elvira Orellana worked 72 hours a week, making sandwiches, cleaning the kitchen and ordering the ingredients for curry chicken and cheese steaks.
Her employer paid her $648 a week — $324 less than she was owed under laws that require that workers earn time and a half for clocking more than 40 hours a week. When she complained, Orellana said, her boss threatened to cut her wages and then fired her.
Orellana's case, which she won in federal court, illustrates a problem that historically has been more pronounced in the wake of recessions. Since the most recent downturn, worker advocates and law enforcement officials say, a growing number of employers have violated wage and labor laws enacted 75 years ago in response to worker mistreatment prevalent during the Great Depression.
Employers in this floundering economy have increasingly denied workers benefits and mandatory overtime pay, according to worker advocates. Some have doctored time sheets and even failed to pay minimum wage. The practice is widespread in low-wage jobs such as waiting tables or cleaning hotel rooms but has been bleeding into middle-class professions, they say.
Studies show that victims can lose up to 20 percent of their earnings because of what those advocates call “wage theft.”
Lawsuits alleging wage and labor law violations have skyrocketed, and state and federal officials have beefed up scrutiny. The Department of Labor has hired 300 more investigators.
The business community has opposed some legislative measures but contends that it supports strong enforcement of the laws because by underpaying employees, scofflaws introduce false competition into the market. Business groups also say recession and its lingering effects left many employers, especially mom-and-pop operations, cutting back while struggling to stay in business.
Tallying the extent of wage law violations is difficult. Many workers are grateful to have work in a tight job market and too scared to speak up, said Catherine Ruckelshaus, legal co-director of the National Employment Law Project.
Speaking up can be “job suicide,” Ruckelshaus said. “There are 10 people waiting in line to take your job. Oftentimes, workers grin and bear it.”
Orellana, a native of El Salvador, said she did not speak up for months, wary of someone taking advantage of her as an immigrant. Then she learned about her rights by asking questions of a fellow churchgoer with connections to the Baltimore-based Legal Aid Bureau, which eventually represented her.
“I felt completely desperate,” Orellana, 41, said through a translator.
She recalled that a friend encouraged her to fight. “She told me not to be quiet, to learn to defend myself, to keep going forward, to not be afraid.”
The Salisbury, Md., woman won an $18,000 civil judgment for unpaid overtime in U.S. District Court, but the judge found that she had failed to prove a claim of retaliation.
Representatives of her former employer, Cienna Properties LLC, did not respond to requests for comment.
Aggrieved workers can take their cases either to law enforcement or to civil court.
The number of lawsuits alleging employer violations of the Fair Labor Standards Act has more than tripled in the past decade, according to an annual study released by Seyfarth Shaw, a law firm that specializes in labor and employment law. More than 7,000 lawsuits were filed from March 2011 to March 2012, up from 2,035 for the same period in 2002.
Meanwhile, U.S. Labor Department investigators collected more than $280 million in back wages last year, nearly $100 million more than investigators recovered four years earlier as the recession was getting under way.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Operating loss mounts at Highmark’s core hospital system
- FNB buying Harrisburg-based Metro Bancorp
- Polymer Enterprises finds success in specialty tire market
- Obama’s Clean Power plan doesn’t change much; opponents remain firm
- Muni bond funds stressed
- Coal producer Alpha Natural Resources files for bankruptcy
- Shell shovels millions into proposed Beaver County plant site
- Auto sales strong in July on SUV, luxury demand
- Slump in energy stocks drags down Dow, S&P
- Labor Department ruling broadens definition of ‘employee’
- Oil prices slip on persistent fears of glut