New Ideas for Combatting Wage Theft

New Ideas for Combatting Wage Theft

Wage theft is a common problem, afflicting low income workers disproportionately.

Wage theft may take such forms as a refusal to pay a day laborer, bouncing a weekly paycheck, or failure to pay overtime.  Unfortunately, it is not easy to enforce wage laws when relatively small amounts are involved.  Some workers do not complain for fear of retaliation. Others find themselves deprived of their last week of wages after they quit or are fired, but the costs of pursuing a claim of a few hundred dollars make the effort too difficult for most people.  In addition to filing and service fees, enforcement of a judgment includes delays and costs.  For example, filing and serving a bank garnishment costs at least $18, and then more filings are required to obtain the funds.  Moreover, courts often impose too high a standard of proof for employees, who do not routinely copy their timesheets or time cards, and therefore their testimony on the number of hours they worked does not carry the burden of proof.

Employers engaged in a pattern of wage theft gain an illegitimate competitive advantage.  Therefore, the effort to stop wage theft should gain support from workers as well as honest employers.  A new initiative in Florida may provide a useful template for solving the typical impediments to

Miami-Dade County, Florida, enacted a county-wide ordinance designed to streamline a process for complaining of wage theft.  The county has a high proportion of immigrants and low-paid workers.  After a year of work by the South Florida Wage Theft Task Force, working with the South Florida Interfaith Justice group, the ordinance passed unanimously.  One objective was to make the process easier than using small claims court.  There is no filing fee, a claim may be made and pursued by the employee or someone acting on his behalf (not necessarily a lawyer), and service of process is made by the County.  Under the ordinance, if the employer does not pay and a hearing is required, the successful employee receives an order awarding doubled (liquidated) wages dues, which are then tripled as a penalty for the violation.  In addition, the employer owes interest on the amount to both the successful employee and the County.

The design of this ordinance favors early conciliation (the employer can avoid some of the costs), easy access by the employee, and rapid resolution, that is payment to the employee.  Other cities are considering such legislation, and San Francisco already has one on its books.  The proliferation of this kind of legislation would even the playing field for workers and employers alike.

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