'Wage theft' prevails in post-recession economy

A growing number of employers have violated wage and labor laws enacted 75 years ago in response to worker mistreatment prevalent during the Depression.
BY YVONNE WENGER Modified: February 15, 2013 at 11:00 pm •  Published: February 17, 2013
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Behind the counter at a convenience store in Princess Anne, Md., Elvira Orellana worked 72 hours a week, making sandwiches, cleaning the kitchen and ordering the ingredients to prepare oxtail, curry chicken and cheese steaks.

Her employer paid her $648 a week — $324 less than she was owed under laws requiring workers to be paid time and a half for clocking more than 40 hours a week. When she complained, Orellana said, her boss threatened to cut her wages, then fired her.

Orellana's case, which she won in federal court, illustrates a problem that historically has been more pronounced in the wake of recessions. Since the most recent downturn, worker advocates and law enforcement officials say, a growing number of employers have violated wage and labor laws enacted 75 years ago in response to worker mistreatment prevalent during the Depression.

Employers in this floundering economy have increasingly denied workers benefits and mandatory overtime pay, according to worker advocates. Some have doctored time sheets and even failed to pay minimum wage. The practice is widespread in low-wage jobs such as waiting tables or cleaning hotel rooms but has been bleeding into middle-class professions, they say.

And studies show that victims can lose up to 20 percent of their earnings due to what those advocates call “wage theft.”

Lawsuits claiming wage and labor law violations have skyrocketed, and state and federal officials have beefed up scrutiny. The U.S. Department of Labor has hired 300 more investigators.

The business community has opposed some legislative measures but contends it supports strong enforcement of the laws, because by underpaying employees, scofflaws introduce false competition into the market. Business groups also say recession and its lingering effects left many employers cutting back while struggling to stay in business.

Tallying the extent of wage law violations is difficult. Many workers are grateful to have work in a tight job market and too scared to speak up, said Catherine Ruckelshaus, legal co-director of the National Employment Law Project.



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