'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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Speaking up can be “job suicide,” Ruckelshaus said. “There are 10 people waiting in line to take your job. Oftentimes, workers grin and bear it.”

Orellana, a native of El Salvador, said she didn't speak up for months, wary of someone taking advantage of her as an immigrant. But then she learned about her rights by asking questions of a fellow churchgoer with connections to the Baltimore-based Legal Aid Bureau, which eventually represented her.

The Salisbury, Md., woman won an $18,000 civil judgment for unpaid overtime in U.S. District Court, but the judge found that she had failed to prove a claim of retaliation.

Representatives of her former employer, Cienna Properties LLC, did not respond to requests for comment.

Aggrieved workers can take their cases to law enforcement or to civil court.

The number of lawsuits alleging employer violations of the Fair Labor Standards Act has more than tripled in the past decade, according to an annual study released by Seyfarth Shaw, a law firm that specializes in labor and employment law. More than 7,000 lawsuits were filed from March 2011 to March 2012, up from 2,035 for the same period in 2002.

Meanwhile, U.S. Labor Department investigators collected more than $280 million in back wages last year, nearly $100 million more than investigators recovered four years earlier as the recession was getting under way.

The U.S. Labor Department has launched an initiative to crack down on businesses that wrongly classify employees as independent contractors to avoid paying overtime and benefits. It has signed an agreement with the Internal Revenue Service to share information to stop worker misclassification.

But Ruckelshaus, of the National Employment Law Project, said more needs to be done.

If current laws were better enforced, employers would be forced to hire more workers and the jobless rate would fall, she said.

MCT Information Services