WAGE THEFT: AN "UNPROSECUTED CRIME" THAT IS HURTING BOTH THE VICTIMS AND THE LOCAL ECONOMY

Referring to wage theft as an “unprosecuted crime” that has reached epidemic levels, Reena Arora, the Workers’ Rights Attorney with the Empire Justice Center in Westchester County, explained to the large audience at the Larchmont-Mamaroneck Local Summit’s breakfast meeting on September 16, that wage theft goes far beyond simply not paying for labor and has a detrimental impact on the entire community. According to Arora, the bad economy and high level of unemployment have caused wage theft to become pervasive across American communities today.

What is wage theft?

Arora and Marrisa Senteno, who has been the Worker Coordinator at the Hispanic Resource Center for six year and whose responsibilities include the difficult and frustrating task of pursuing unpaid wage claims, described wage theft as the “failure to pay according to the labor laws;” it pertains to employers and business owners of all sizes. Examples of wage theft include:

· not paying for hours worked;

· not distributing tips in the agreed-upon way;

· not paying overtime;

· misclassifying workers, such as classifying workers as independent contractors instead of employees;

· not providing breaks;

· not providing paid time off; and

· charging employees a “quitting fee” for leaving a job.

While less-skilled workers are often the victims, Arora cited unpaid interns as another growing segment of wage theft victims, saying that “companies aren’t willing to pay entry level wages” any more. Arora made it clear that wage theft is not just a low-wage worker issue. (Previously, Arora was an associate at the plaintiff-side employment law firm, Outten & Golden LLP, where she worked on high profile cases such as a suit against Fox Entertainment Group on behalf of unpaid interns.)

How does wage theft hurt our community?

Senteno pointed out that wage theft cuts across the community and has a spillover effect on all segments of the local economy. As she explained, workers who are employed locally usually also spend locally; thus, if those workers do not receive their wages, they in turn will not be able to support the local economy.

Taking it a step further, Ann Heekin, a visiting professor of religious studies at Iona College and President of the Board of Don Bosco Workers in Port Chester, asserted that wage theft is everybody’s problem because of the ripple effects. Besides just impacting the local economy because of diminished spending power, she maintained that wage theft “places pressure on publicly funded services,” as unpaid and under-paid workers are forced to rely more heavily on such services. Eventually, all taxpayers are impacted.

In Mamaroneck alone, Senteno estimated that she typically handles 30-40 wage theft complaints a year; of these, only about half of the claimants follow through on filing a claim due to the lengthy process and complicated paperwork. Claims, ranging from a low of $200 to a high of $5,000-$10,000, totaled about $15,000 from last winter alone. Senteno shared that despite the tremendous time and effort put into pursuing employers and filing claims, the success rate is very low.

Why is wage theft so prevalent?

Arora blamed lack of knowledge, lack of resources, and lack of enforcement for the prevalence of wage theft. She explained that neither the workers nor employers really understand the intricacies of the labor laws. Even if workers realize that they are being underpaid, according to Senteno, “once in a job, even underpaid, the fear of losing the job keeps someone in a low wage, underpaid wage theft situation.”

Despite New York State having fairly good labor laws – such as the Wage Theft Prevention Act and the Domestic Workers’ Bill of Rights – Arora said that the “law is strong but meaningless” because it is not enforced. She shared that there are very few recourses under the law to go after perpetrators. There are very few lawyers who take on such cases, and, “if you file a wage claim with the New York Department of Labor, you can wait one, two, three, or even four years.” She explained that smaller claims are often taken up in Small Claims Court, but there is no enforcement of a judgment. As a result, she says that “the most vulnerable workers never will be able to access their rights.”

What recourse is available to victims?

New York State Department of Labor representative and 34-year veteran, Maritza Lamboy – currently the Assistant Director for the Division of Labor Standards – agreed that the shortage of investigators has caused a severe backlog that they are working hard to reduce. Charged with the difficult task of enforcing the labor laws, Lamboy said that the bulk of their work is related to claims by undocumented workers being paid less than the minimum wage. Lamboy clarified that “every worker has the right to be paid the state minimum wage regardless of their immigration status.”

Lamboy described that wage theft complaints can be made with the DOL in person, by mail or on their website; complaints may be filed by individuals or by advocacy groups on their behalf. The DOL’s goal is to reduce their current backlog, and be able to address claims within six months of the initial filing. (Lamboy estimated that the DOL gets 5,000-7,000 claims a year, and that $25 million was collected last year.)

According to Lamboy, the DOL is available to help educate employers through their monthly seminars and to assist employers get into compliance.

What can be done to address wage theft?

All panelists agreed that greater awareness of the issue is required. They believe that more education is needed for both workers and employers, a sentiment shared by local business owner and Local Summit Board member Nancy White, who expressed frustration in trying to understand the labor laws.

Senteno described an initiative involving five organizations that are working together to address wage theft on a regional level. Arora, who is also part of a coalition working to try to improve the enforcement aspect of the law, voiced her opinion that “it’s up to the community to start to care and want to do the right thing.”

In neighboring Port Chester, Heekin and the Don Bosco Workers have been very busy in their fight against wage theft. Theirs is a three-pronged approach: “Recovery, Reform and Redefining the problem.” Addressing recovery, they work with employees to document violations and attempt remediation with businesses, although Heekin admitted that the resolution rates have not been good. Their second prong involves legislative reform; for the last year, Heekin has been working to amend the NYS Wage Theft Law.

Finally, Heekin and the Don Bosco Workers are about to kick off a “No Pay, No Way” campaign against wage theft in Port Chester. Their message is simple one, but one Heekin hopes will provide a powerful incentive for local businesses: “Wage theft is bad for business.” Ten local businesses have agreed to set the example of being a “good workplace” and will publicly display a seal identifying them as such. Heekin hopes that public pressure will enable Port Chester to become a zero-tolerance community and to set an example for other Westchester communities. As Heekin said, “wage theft is not an individual problem, but a community problem. To solve it will take a community.”

This breakfast forum was hosted by The Larchmont/Mamaroneck Local Summit, an informal community council that seeks to make life better for all in the tri-municipal area. Its monthly public meetings are usually held at the Nautilus Diner in Mamaroneck at 7:45 a.m. on the third Tuesday of the month. The next breakfast meeting will take place on Tuesday, October 21. The topic of that meeting will be: “Women, Education & Culture: What We Are Doing in Our Community to Help Young Women Reach Their Potential.”