Wage Theft Costs California’s Workforce Nearly $2 Billion Each Year

Minimum wage workers are the most affected by wage theft in California, according to a report released by the Economic Policy Institute, a nonprofit think tank in Washington. According to a news report in the San Francisco Chronicle, employees who are supposed to be getting paid the minimum wage in California, are on average, losing $64 per week and about $3,300 annually, which amounts to 22 percent of their earnings, from employers who are shortchanging their hourly workers.

Even though the current state minimum wage of $10.50 an hour translates to an annual salary of $21,840, minimum-wage workers don’t always have full-time work. So, on average, they get about $11,700 a year in wages. This often forces them to rely on public assistance programs to survive and provide for their families, the report states. The report’s findings suggest that in spite of California’s reputation as a worker-friendly state with laws against wage theft, employers still violate those laws.

Wage theft is the illegal practice of not paying workers for all of their work including; violating minimum wage laws, not paying overtime, forcing workers to work off the clock, and much more. It is a major problem statewide. According to the UCLA Labor Center, in Los Angeles alone, low-wage workers lose $26.2 million in wage theft violations every week–making it the wage theft capital of the country.

A Shift in Strategy

Labor Commissioner Julie Su tells the Chronicle that her department is very much aware of the problem and is looking for ways to battle it. Su says her office has historically attempted to fight this problem by conducting workplace inspections, a tactic she says is not enough to penalize employers who are violating wage laws. Su says she has shifted her agency’s resources taking a more focused approach to enforcement relying more on hearing about workplace violations from employees on the inside.

She says her agency has also become much more aggressive about reclaiming money employers owe workers when these wage violations are uncovered. She says employers go to great lengths including hiding their assets in their own bank accounts. Laws that took effect in 2016 allow the state to recover stolen wages from individuals as well, not just corporate accounts.

To get the words out, Su initiated a multilingual campaign in 2014 titled “Wage Theft is a Crime,” which is designed to flush out violations at the source. This campaign is now being renewed through 2018 using billboards, social media campaigns and a website.

Workers Who Are Most Affected

The report says the workers who are most affected by wage theft are those who earn minimum wage. Farm labor contractors, car washes and garment manufacturers are among the types of companies that have historically had a track record of wage theft. For this reason, these types of businesses are required to get special licenses from the labor commissioner’s officer so the state can pay better attention to them.

In 2018, janitorial business will be added to that list along with restaurants, housekeeping, residential care homes and construction businesses. Violations are particularly common in the construction industry where deadline pressures force workers to cut meals and breaks short and return to work. Worker advocates say construction workers are commonly paid only portions of what their employer owes them. Over several months, that could add up to thousands of dollars.

One segment of workers this report probably did not look closely at, are undocumented immigrants, who will be particularly vulnerable because of the Trump Administration’s more rigorous deportation policies. ICE raids have increased in immigrant communities, which means workers who are undocumented will be wary about reporting wage violations to the authorities for fear of deportation. It is important that the labor department comes up with ways to offer these workers protections should they decide to blow the whistle on their law-breaking employers.

Some Signs of Wage Theft

Many workers don’t even realize that they are victims of wage theft. Of course, when your employer does not pay you at all, it is easy to realize that you are being bilked. But if your employer continues to pay you on time, but you suspect you are not being paid all of the money you are duly owned, you know this could be sign that they are stealing your wages. If you suspect wage theft, it is important that you begin to document the hours you work everyday to make sure you being paid correctly.

There are a few other things for which you need to watch out. If your employer has categorized you as a supervisor, but you have no supervisory duties, that’s a red flag. Employers often resort to this strategy to avoid paying employees overtime. Some restaurants withhold tips keeping a percentage for themselves and then dividing the rest in a tip poo. This is of course illegal and amounts to wage theft.

When your employer makes you work through breaks, but doesn’t pay you for that time, that also amounts to wage theft. Employers are also required to pay you your last check and accrued vacation time when you quit your job. Failing to do so also amounts to wage theft. If any of these situations happen you, please remember that you have a right to receive compensation for your losses.

If you believe you are being underpaid or have not been paid the wages you are owed, you can file a complaint with state and federal labor authorities, such as the U.S. Department of Labor’s Wage and Hour Division. Document the number of hours you work and save all your paystubs. Talk to other workers to see if this is happening to them as well. If you are being victimized, it is very likely that other workers are being treated the same way. It would also be in your best interest to contact an experienced lawyer for collecting unpaid wages who will fight for your rights and represent you in court if your case goes to trial.