E-Alerts & Press Releases

When $2 billion in stolen wages is only a “drop in the bucket”

Attorney Sulma Guzmán talks about the Economic Policy Institute’s new report and the PJC’s fight against wage theft.
 
January 31, 2018: In December, the Economic Policy Institute released a report showing that $2 billion in stolen wages were recovered in 2015 and 2016 by the U.S. Department of Labor, state labor departments and state attorneys general, and the ten largest class action lawsuits. Despite that staggering figure, the report describes it as a “drop in the bucket” of a much bigger problem.
 
The Public Justice Center’s Workplace Justice Project sees the impact of the wage theft epidemic every day as they represent workers seeking to recover unpaid wages. We sat down with PJC attorney Sulma Guzmán to talk about the EPI report and the PJC’s role in fighting wage theft.
 
Q: $2 billion in unpaid wages recovered over two years. What does this number tell us about the prevalence of wage theft?
 
A: It shows that the amount of wages employers steal isn’t chump change. Worse yet, as the EPI report acknowledges, the $2 billion estimate is just the tip of the iceberg, representing a mere sliver of the wages that are actually stolen. It doesn’t account for people who aren’t aware that they’ve been cheated out of their full pay. It doesn’t include untold numbers of people who chose not to complain when their wages were stolen for fear of retaliation. You also don’t know how many people tried to file a case without a lawyer but didn’t know how to navigate the court system or administrative complaint rules. People frequently give up along the way when they don’t have help. And since the report only includes the top ten class actions, we don’t know how much was recovered through successful individual and smaller group cases. So the report is a great starting point for understanding that wage theft is a significant problem, but the actual figure is likely much higher.
 
Q: The report describes the many ways that employers cheat workers out of wages, as well as the impact of wage theft on workers’ lives. What concerns do workers share when they call the Public Justice Center? How does a worker figure out they’ve been shorted?
 
A: One of the hardest things about fighting wage theft is that workers often can’t identify that they’re not being paid enough because they don’t know the wage laws. So workers may call the PJC because they felt something wasn’t quite right but they want to figure it out. They may be working around the clock but earning very little. When we take a closer look, we often find that they have been denied overtime pay, or they have been forced to work off the clock, or they have been told they are independent contractors and paid a salary equivalent of $5 an hour. Workers are often shocked after talking to an attorney – wait a minute, I’ve been working for so long and you’re telling me that I’m owed all of this money?!
 
The vast majority of workers who call PJC are in low-wage industries, working long hours for little pay at a minimum wage so low it’s tough to keep a roof over your head. So when they’re not fully paid, it’s even harder to make ends meet. And the harm isn’t limited to income. In one case, opposing counsel asked our client on the stand how he could remember the weekends that he worked. Our client responded that he remembered because that’s the time he didn’t get to spend with his family.  The lost time is invaluable.
 
Q: What barriers prevent workers from suing for their unpaid wages?
 
A: As I mentioned earlier, it’s often hard for workers to tell that they’ve been cheated. They may not know their legal rights, and their employer also might not be providing paystubs that show how they’re being paid. (For that matter, Maryland law does not require employers to provide much information to the worker in terms of how their pay was calculated). And if workers are in an industry like home care, where they are isolated and often don’t see their colleagues, they often don’t know that other people are facing the same thing. 
 
The fear of retaliation also keeps workers from speaking up. Employers may threaten to fire or blacklist workers if they complain, or even suggest that they could turn undocumented employees over to federal immigration authorities. In the current climate, these fears are very real. And these threats are very effective.
 
And even when workers want to sue, the legal system doesn’t make it easy. It’s hard to navigate without an attorney, and there aren’t enough attorneys to take all the cases that could be filed. Many of these cases are for amounts that, while significant for the workers’ families, are relatively small – a couple hundred or a few thousand dollars. In cases where the recovery is low, there’s an issue of the cost of private attorneys pursuing them, even though there’s fee-shifting. The Public Justice Center and other civil legal aid providers represent workers in wage theft cases, but we receive far more requests for assistance than we can take.
 
Q: The report outlines several policy recommendations. How is the PJC fighting wage theft?
 
A: The PJC’s Workplace Justice Project fights wage theft through litigation, education and outreach, and policy advocacy. We bring individual, small group, and class action lawsuits to hold employers accountable and target industries known for wage theft violations. We talk to community, labor, and organizing groups, offering know-your-rights presentations and brochures. We write articles for local media, like the Somos Baltimore Latino newspaper. We also educate other attorneys in employment law through legal publications, conference presentations, and workshops. On the policy front, we advocate with state legislators and government agencies. Those that relate to EPI report’s recommendations include bills related to paystub transparency and anti-retaliation protections. Maryland currently doesn’t require employers to provide very much information on paystubs. Without that, it’s hard to determine your rate of pay, whether you’ve been paid correctly, or sometimes even who the employer is. We’d like to see state law that requires employers to ensure that paystubs include basic information about employees' wages and hours. We’re also looking at how we can combat retaliation against workers, so that workers aren’t penalized for asking to be paid correctly.
 
In the end, we’re trying to raise the volume of outrage about wage theft.  And we want to raise the cost of non-compliance, increase the price tag, so that businesses making the calculus decide it’s not worth the price of getting caught cheating. And that will level the playing field for law-abiding employers as well. It’s robbery, plain and simple. If someone’s car is stolen, there’s an outcry. Why shouldn’t it be the same when people aren’t paid?


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