The recent story of an Indian diplomat in New York arrested for labor abuses garnered national headlines, but the mistreatment suffered by her domestic worker employee barely received a mention. The worker, Sangeeta Richards, alleged she was required to work more than 100 hours per week, for a wage that amounted to just under $1.50 per hour.
Ms. Richard's experience is not unique. Across our country, employers steal millions of dollars out of the paychecks of their workers every week, in fast food restaurants and factories, in child care centers and construction sites. The practice is called wage theft, and though it's a crime in many states, it's hardly ever prosecuted outside of a few high-profile cases.
Wage theft takes many forms. Some employers simply refuse outright to pay workers their wages at the end of the day. Paychecks bounce. Workers put in hours that go unpaid, for workplace meetings and time spent opening and closing shop. Tips are stolen. Rest and meal break times slip by unacknowledged.
Ms. Richards was a domestic worker, employed in an occupation notorious for wage and hour violations. (More than 40 percent of workers who work in private households experience minimum wage violations according to one study.) But had Ms. Richards been employed in a different occupation, would she had fared better? Not necessarily. One in four workers in retail and drug stores have their wages stolen every week.
The news coverage about Ms. Richard's employer focused on the unjust use of diplomatic immunity. But many U.S. employers have effective immunity for wage violations. They know that strapped labor investigators will likely never catch up to them, no matter how serious their actions are. In fact, the average employer has just a 0.001 percent chance of being investigated by the Department of Labor 's Wage and Hour Division or by OSHA in any given year. Workers report being told by their employers that "we don't pay for overtime work," as if the failure to comply with one of our best known, best established and most universally applicable laws is simply a business choice.
Unscrupulous employers commit wage theft directly, but they also employ structures that contribute to and mask violations. Retail giants like Amazon and Walmart place low-bid subcontractors like temp and staffing agencies between themselves and their workers, then look the other way when the intermediaries rob workers of minimum wages and overtime pay. A Walmart subcontractor just settled a workers' wage and hour lawsuit for $4.7 million. In another lawsuit, Walmart itself has been added as a defendant. Across the country, port truck drivers have millions stolen from them by companies who illegally claim that the workers are independent businesses, forcing the workers to front their own costs, requiring the workers to purchase their own trucks in order to get work.
Why don't workers complain? When they do, more than 4 in 10 experience illegal employer retaliation. After Ms. Richard complained to her employer, news reports say that her family in India was harassed and intimidated. Claims of retaliation against workers are pending againstWalmart, at least one trucking company, and Subway, after workers took part in concerted actions meant to raise wages and improve working conditions.
Wage theft is one part of the story about the deterioration of labor standards that has become a key contributor to burgeoning inequality in our country. Wages are stagnant or falling for most workers, but the jobs that experienced the highest growth in the recovery and that are projected to grow in the next 10 years have two things in common: High rates of wage theft and low wages. Among them, retail (average hourly wage $10.97), food preparation (average hourly wage $9.04), laborers and freight workers ($11.44), waiters and waitresses ($7.69) and personal and home care aides ($10.18).
On top of low, torpid wage rates, the average low-wage worker loses nearly $3,000 to wage theft every year. When annual earnings hover around $18,000, that's a big chunk missing from workers' already meager paychecks.
Fortunately, at the behest of workers' rights organizations and strong community coalitions, states across the political and geographic spectrum are taking action. In the past three years, nearly half of the states have passed more stringent laws governing wage theft and payroll fraud. These include such diverse states such as Illinois and Iowa, New Hampshire and New Mexico, Tennessee and Texas. This session, measures are expected in some 16 states.
If we are to end wage theft and raise standards in our fastest growing occupations, much more needs to be done: more stringent penalties, more robust enforcement, better collection tools, better retaliation protection, more regulation of temporary agencies and the companies that use them. After Ms. Richard's story broke, a number of stories described the outrage at the treatment of her employer during her arrest. That anger is misplaced. Let's direct our outrage at the right place - against wage theft and the abuse of our most vulnerable workers.
Rebecca Smith is a Deputy Director at the National Employment Law Project.