Raising hourly pay is a rallying cry for 2018, but states often fail to get workers the money that’s owed them.
As Democrats make raising the minimum wage a centerpiece of their 2018 campaigns, and Republicans call for states to handle the issue, both are missing an important problem: Wage laws are poorly enforced, with workers often unable to recover back pay even after the government rules in their favor.
That’s the conclusion of a nine-month investigation by POLITICO, which found that workers are so lightly protected that six states have no investigators to handle minimum-wage violations, while 26 additional states have fewer than 10 investigators. Given the widespread nature of wage theft and the dearth of resources to combat it, most cases go unreported. Thus, an estimated $15 billion in desperately needed income for workers with lowest wages goes instead into the pockets of shady bosses.
But even those workers who are able to brave the system and win — to get states to order their bosses to pay them what they’re owed — confront a further barrier: Fully 41 percent of the wages that employers are ordered to pay back to their workers aren’t recovered, according to a POLITICO survey of 15 states.
That’s partly because, in addition to lacking resources, states lack the tools to go after the landscaping firms, restaurants, cleaning companies and other employers that shed one corporate skin for another, changing names while essentially continuing the same businesses — often to evade orders to pay back their workers.
This failure to enforce both the minimum hourly wage — $7.25 under federal law — and rules requiring higher pay for overtime distorts the economy, giving advantages to employers who break the law. It allows long-term patterns of abuse to take root in certain service industries, especially restaurants, landscaping and cleaning. Advocates for lowest-wage workers describe families facing eviction and experiencing hunger for lack of money that’s owed them. And, nationally, the failure to enforce wage laws exacerbates a level of income inequality that, by many measures, is higher than it’s been for the past century.
“Low-income workers are already in this fragile balance,” said Victor Narro of the UCLA Labor Center. “One paycheck of not being able to get the wages they’re owed can cause them to lose everything.”
Interviews with scores of state officials, legal-services advocates and labor specialists indicate that the failure to enforce minimum wages touches every corner of the country, but is especially acute in the six states that have no investigators probing wage violations at all.
All six states that have no minimum-wage investigators are in the South, and in a seventh, Florida, former Gov. Jeb Bush eliminated the state Department of Labor over a period of years in the early 2000s. In theory, its responsibilities were distributed among other state agencies, but in practice Florida failed to undertake a single enforcement action for more than four years. Georgia, Louisiana, Alabama, South Carolina, Tennessee and Mississippi all have labor agencies, but workers can’t file minimum wage or overtime claims with them; they must instead appeal to the U.S. Department of Labor, which takes cases only selectively, based in part on the number of employees involved and the extent of the wrongdoing.
“In Louisiana, it would have a substantial impact on the lives of working families to be able to call someone and say, ‘My employer hasn’t paid me in three weeks — what do I do?’ and to have someone who can go in and help you with that,’’ said Andrea Agee, staff attorney at the Workplace Justice Project in New Orleans.