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Sat, Sept. 21

Column: Easy leads on wage-theft ignored

Here's a simple idea that might significantly reduce wage theft. If wage theft doesn't interest you for the raw injustice of it, here are some selfish reasons to care. People who don't get the pay they've worked for could qualify for that much more in food stamps, are that much less able to keep up with their bills, are discouraged from working, and spend less, which is a drag on the whole economy.

What kind of wage theft? It can be getting paid less than minimum wage, not getting overtime pay, not paid for time at the start or end of a shift, and other illegal ways that pay can be calculated to come up short. Sometimes it's obvious, but other times employees don't know the rules, or the shorting is hard to see in a confusing paycheck.

The size of the problem is huge, and it's here in Prescott too. The University of Illinois found over half - yes, over half - of low-wage workers who put in overtime don't get fully paid for it. Temple University found about a quarter of the workers they studied across Pennsylvania were shorted, typically 15 percent of their pay, equaling tens of millions of dollars. That's not per year, that's tens of millions every week. From my own knowledge of cases in upscale restaurants here, and from talking to the local Community Legal Services, and employment attorney Tony Shaw, this area is far from immune to the problem.

So if there's a lot of it, and it's important, we want to catch all that we can, right? And when an employer is found to have shorted the wages of one employee, there's a good chance they're doing the same to other employees, right? So when one employee wins a wage dispute, surely the state Labor Department follows up and looks into that employer, right? Nope.

After repeated going back and forth with the state Labor Department to try to get a straight answer I finally got a weak, vague one. Spokeswoman Rachael Brockway wrote, "There is no follow-up with the employer unless another complaint is filed against the employer. Occasionally, although infrequently, the Labor Department may follow-up and expand its investigation of an employer if there is a red-flag or some indication of a company-wide problem."

So there is no taking the initiative based on the suspicion raised when an employer shorts an employee's pay. From that statement it's not clear if further complaints trigger an employer investigation or if they're still treated as individual cases. It's not clear what constitutes "indication of a company-wide problem," though we know it is "occasional" and "infrequent." Common sense would say that the first case is a good indication.

There was no answer to the additional question, "how many?" I had asked that if they do any follow up, how many businesses have they done that on. In the past they have been forthcoming on, for instance, the number of wage cases brought to them, so why no numbers on this? I am left assuming it's because the number is so low.

The lack of reasons given for their policy wasn't for lack of trying. I urged them to take the opportunity to explain the reasons for their policies, but no explanation was given.

From the department's own statistics, in fiscal year 2012/13 wage cases tended to be found in favor of the employee: 880 some cases. Plus about 700 more where the employer settled before a finding was made. At that, the department handles a narrow slice of the total cases. If the claimed amount is under $2,500 it's a small claims issue. If it's over $5,000 it becomes a private suit. The Labor Department only deals with cases in the range between and not all of those. If federal wage laws are involved it might go to federal court.

I asked the labor departments of some other states how they handle this. Massachusetts tracks wage cases even if they are a civil suit. As Oregon investigates cases, it tries to see if it affects other employees. Vermont's Labor Commissioner, Anne Noonan, said, "If we find wage violations ... the Department does look at the overall labor law compliance by that employer."

Just those cases that our Labor Department found in favor of employees, those 880 cases, is a big pool of possible offenders. The total number of employees in those businesses that might be affected, the total amount of money, could be huge. These hourly-wage employees are the very definition of who needs protection. These 880 cases are the very definition of low hanging fruit. We're not following up. The logical next question is, why not?

Stay tuned. There will be more to this.

Tom Cantlon is a local business owner and writer and can be reached at Comments at TomCantlon.com.

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