A qualitative report from the NC Justice Center’s Workers’ Rights Project and the UNC Immigration/Human Rights Clinic

I’ve read about it before in the newspaper, but never in [my] life did I think it would happen to me.
– Freddy, a farmworker who often was not paid minimum wage and didn’t receive his final paycheck

This qualitative inquiry into wage theft is designed as a first look at the impacts of wage theft on North Carolina workers, the conditions that make workers vulnerable to the severe consequences of wage theft, and the options—or lack of options—available to workers for redress.

Wage theft, or an employer’s underpayment or nonpayment of wages to workers who have earned those wages, is a growing epidemic. Recent studies and surveys confirm staggering rates of wage and hour violations—such as minimum-wage and overtime violations, the shorting of hours, and the refusal to pay workers at all—in low-wage industries across the country.[ii] Get more information about wage theft here.

I may have not studied much or know math, but I know how to add the numbers, and when we do our own calculations, it doesn’t add up to what she said. It’s always less. – Natalia, a housecleaner whose employer manipulated her hours

This report offers insight into these questions through 10 workers’ experiences. While each worker’s story is unique, the following common themes emerged and are instructive for moving policy forward:

Wage theft creates economic uncertainty, and even small wage violations have significant financial consequences.

While the dollar amounts stolen from participants might be considered relatively small, these amounts undermined participants’ financial stability, pushing some deeper into debt or even into homelessness. Most participants described how they meticulously budgeted their limited resources, and when employers failed to pay promised wages, the inability to plan ahead caused stress and uncertainty. For some participants who experienced multiple wage-theft violations, living with uncertainty became the norm.

Serious barriers to redress exist, including the threat of retaliation, financial obstacles, and a lack of information about options.

Not one of the 10 participants had been able to recoup their lost wages at the time of the interview. By far, the greatest obstacle to redress was the threat of employer retaliation, especially in the cases of undocumented workers. Other barriers included the inability to pay court filing fees, a lack of information about legal and administrative options for redress, and little faith that anything could be done.

I went to put in the complaint and first you had to give $80 to do the fine and then another 30 for who knows… if one doesn’t have any money— they didn’t pay you—one doesn’t have any money, one can’t do that. – Carlos, who worked in construction and only received partial payment for his work

Low-wage work increases worker vulnerability and the severity of consequences when wage violations occur.

While the Triangle region of North Carolina is often known for its technology boom and steady economic rise, participants in this study did not reap the rewards of the area’s recent job and wage growth. For all participants, their work, which combined low wages with often sporadic or unpredictable hours, created unstable financial realities. Some participants were already living paycheck to paycheck and barely able to meet basic needs before wage violations occurred. Moreover, for some workers, the lack of available job opportunities in the current economic downturn affected their ability to leave jobs with poor conditions.

“I’ll be 61 in May, and this is the worst I have ever seen myself in a predicament like this.”- Karen

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.

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, who wasn’t paid for overtime at a preschool at expected to use “volunteer time” to work on curriculum

The individual and collective experiences of the 10 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, who was underpaid and denied overtime in his landscaping job

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. 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]. – Carrie, a home health aide who 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.

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. – Roger, a restaurant worker

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. 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.