"It doesn't add up" - What Can Be Done about Wage Theft in North Carolina?

I average five to seven hours of overtime every week. I’m not getting paid for five to seven hours of overtime every week. I’m maybe making two to four hours of overtime on a paycheck, so every two weeks. - Sarah

Read about Sarah, who worked at a preschool, where she wasn't paid for overtime hours and was expected to use "volunteer time" to work on curriculum.

While the findings of this report (get the full report here) are not designed to be generalizable, the stories of the 10 workers featured in the report demonstrate the damaging impacts of wage theft and the need for solutions.

Each participant was asked what should be done about wage theft. Most participants spoke generally about the need for change. Some had specific recommendations, such as more enforcement of labor laws, more support through community organizations, more information for workers, and more protections against retaliation.

The individual and collective experiences of the ten participants can inform policy in the following general ways:

>> Remedies must be more accessible. Not one of the respondents was able to successfully reclaim lost wages at the time of the interview. The very real fear of retaliation as well as financial obstacles and gaps in information kept most respondents from successfully seeking redress.

If I go complain, he is going to fire me.... One has to endure it, right? Well, it can’t be helped. - Diego

Read about Diego, who worked in landscaping and whose employers denied him overtime pay, underpaid him, and made illegal deductions from his paycheck.

The threat of retaliation was the primary obstacle to redress for participants, which is far from uncommon. A National Employment Law Project national survey found that 43 percent of workers who complained to employers about wage violation or working conditions experienced some form of retaliation.[i] Worker complaints are the primary way wage theft is brought to the attention of administrative agencies and the courts. As such, workers need strong protections from employer harassment or retaliation when they come forward to complain or file a complaint.

Other obstacles for participants were related to lack of information – many participants simply did not know where to turn for help. While the services of worker centers, community agencies, and legal services organizations are crucial, more outreach by the Wage and Hour Bureau would assist workers in knowing where and how to file a complaint. In addition, requiring employers to provide new hires with basic information, including name, address, and employer identification number, would help workers once they reached the stage of filing a claim.

Finally, participants spoke about financial obstacles. While filing a complaint with the Wage and Hour Bureau does not cost money, most participants never made it to this stage. Some were referred to Small Claims court. One participant tried to hire a private attorney, but could not afford the fees. More agency funding would allow the Wage and Hour Bureau to take on more cases, thereby allowing workers to access a complaint process without worrying about paying additional fees. In addition, providing for guaranteed attorneys’ fees would make legal assistance more accessible to wage theft victims.

>> Wage theft is a pressing problem; prevention and the ability to collect are key. Respondents clearly voiced the potentially devastating financial impacts of wage theft. In one case, a single lost paycheck meant the difference between tenuous financial stability and homelessness.

The money that I had saved up, I had to pay my car insurance and everything else. So, that’s what led me here [to the homeless shelter].”

Read about Carrie, who worked as a home health aide but ended up homeless after her employer withheld her paychecks.

Stiffer penalties for violating the law would deter many employers from routinely stealing workers’ wages. A comprehensive publicity campaign by the Wage and Hour Bureau would let employers know they could be scrutinized, while also informing more workers about how to make claims.

Even if employees are able to access the complaint process, the collection of lost wages is often challenging. Extending the statute of limitations for wage claims would enable workers to wait to recoup wages until they have left their employment. Providing a simple way for workers to place liens on employers who fail to pay wages can be an effective tool for fast recovery of wages owed.

I mean, if you’re not going to get it, most people just let it go and walk away from it instead of raising a big stink about it or trying to get a lawyer. A lot of people just eat the money, which is terrible because then it gets to points like these where it’s becoming so popular to not pay your workers because nobody’s doing anything about it. There’s no repercussions for anything in [the restaurant] industry.

Read about Roger, who works in restaurants, where wage theft is rampant.

>> Addressing wage theft in isolation is not enough. Low-wage work can create unstable financial circumstances for workers and families. Respondents spoke about the difficulties of making ends meet even before the wage violation occurred. In addition to ensuring that workers are paid for the work they do, policymakers should ensure that jobs pay living wages and enable workers to support themselves and their families.

Rising outrage over wage theft has led to local and state organizing efforts across the country. Anti-wage-theft laws have been approved in such states as California, Washington, New York, Illinois, and Maryland.[ii] Last year, legislation to aid in the recovery of unpaid wages was introduced in North Carolina.

Enforcing laws to ensure that workers are paid for all hours worked and making sure all workers have access to basic wage protections are policies that reinforce the value of work, help struggling families, and accelerate the economic recovery.

[i] See Bernhardt et al. 2009.

[ii] See National Employment Law Project, 2012. “Winning Wage Justice: Round-Up of Recent State and Local Activity to Combat Wage Theft,” available at www.nelp.org.