- The Problem of Wage Theft: What it is, its causes, & its consequences
Wage theft refers to the problem of workers from all industries who are losing billions of dollars year after year as a result of either unpaid wages, unpaid overtime work, misclassification of labor, deduction violations, or tipped job abuse. In other words, wage theft occurs when workers are denied wages and benefits they have earned as protected by both federal and state laws. Indeed, wage theft is a significant issue all across the US, and especially in Colorado. As an example, there were 274 cases of wage theft filed in Colorado alone in 2016 – the Colorado Fiscal Institute estimated that workers are losing about $750 million dollars. This means that many workers, and especially day laborers, who already get paid poorly, may lose as much as 15% of their wages because of it. More concerning, is the fact that most of them are immigrants who come with the purpose of overcoming economic hardship in their country of origin, only to be denied the often already low wages they are owed. What is worse is that these numbers only reflect the cases of wage theft that were filed – many don’t file claims due to the countless barriers they face as part of the process, which include among many others: fear of visibility; language, legal, and social barriers; as well as lack of time and information. In Colorado, the two sectors that are affected the most by wage theft are the construction and hotel/food services industry; and though the construction industry accounts for only 5.7% of all employment in the State, construction wage theft accounts for the largest share of wage theft with 21.2% of FLSA violations.
Additionally, it must be noted that existing vulnerable populations, such as low-wage immigrant day laborers, are particularly susceptible to wage theft and its impacts. Day laborers suffer regularly from multiple kinds of employer abuse including wage theft in its many forms, discrimination, and workplace injuries; they are also often unfairly targeted by merchants and police through insults, arrests, citations, and the refusal of services by local business.
Consequently, it is imperative to understand why fighting against wage theft is so important. There are many factors that contribute to its occurrence, including: the rise of day labor and day laboring hiring sites, xenophobia, the criminalization of undocumented immigrants, and the deportation threat dynamic. What Elizabeth Fussell calls the deportation-threat dynamic, occurs when there is an increased threat to deportation through restrictive migration policies that is accompanied by a constant demand for unauthorized migrant laborers. This, thus enables a highly exploitative interpersonal dynamic between migrants and those who seek to take advantage of them as unscrupulous employers and criminals commit wage theft, workplace violations, and/or robbery, and migrants don’t report the crime due to fear of deportation. Indeed, this dynamic has been on the rise since 1996, when the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) and the Anti-Terrorism and Effective Death Penalty Act (AEDPA) where put in place. It is evident that it is through these policies that gave broader power to arrest, detain, and deport unauthorized immigrants, while eliminating their right to appeal, that migrants are further exposed to labor abuses and crime victimization, and specifically, to wage theft.
Moreover, because spending drives the economy, wage theft not only affects direct victims and their families, but it also undermines the economy, local businesses, and the community and state (in the form of unpaid tax revenue and lack of purchasing power). In actuality, of all types of workers, low-wage workers spend the highest percentage from their income in the local Colorado economy – when employees are cheated out of their wages, this generates a negative impact on spending and sales tax.
For all these reasons, it is without doubt that wage theft is a problem that concerns the wider community and is of special importance in Colorado. It is essential to work on how to better solve this problem and protect those affected.
- The Direct Action Team’s Work:
Fortunately, there are many organizations that work in the fight against wage theft and help its victims to recoup their wages.
The Direction Action Team (DAT) is a group of volunteers at a Denver-based day labor center (El Centro Humanitario) who listens, strategizes, negotiates with employers, and engages in direct action to help workers recoup unpaid wages. Usually, once the DAT is contacted by a worker who expresses their need for help to recover their wages, the DAT starts engaging in what can be called an “escalation strategy,” which is mostly based in community organizing and social pressure. First, they talk to the worker about their case and gather as much information and evidence as possible. Then, they reach out informally to the employer to get his/her side of the story and to request the worker’s wages. If this does not work, they escalate interactions with the employer through demonstrations and delegation visits to the employer’s home or workplace. As a last resort, the DAT will help the day laborer pursue justice through small claims court. An additional new option, due to an amendment to the Colorado Wage Protection Act of 2014 (which went into effect January 1, 2015), is to help the worker navigate a new, free administrative process through the Colorado Department of Labor and Employment (CDoLE), which enables low-wage workers to pursue claims for wage theft of $7,500 or less.
Workers are usually referred to the DAT by Towards Justice, a non-profit legal services organization, which aims to empower low-wage workers and serves as a clearinghouse for intakes and referrals. They connect workers with appropriate legal and community resources such as the DAT, the Colorado Department of Labor and Employment (CDoLE), and lawyers. The DAT often receives the cases that are smaller and more difficult to resolve, meaning that lawyers are reluctant to take the cases and administrative procedures and small claims court pose additional bureaucratic hurdles. In practice, there are very few avenues for low wage workers, and this, makes the DAT’s work critical.
- Student-led Research & its Results:
The DAT’s efforts have been further supported in different ways by the University of Denver’s Just Wages Project and Professor Galemba’s Qualitative Research Methodologies class. As part of a research project entitled “Workers & Volunteers Fighting Wage Theft Together,” my group and I engaged in participatory action research as both participant observers and volunteers in taking wage theft cases with the DAT in the spring of 2017. Our research was built upon our observations and the expressed needs of the DAT. The DAT conveyed their desire to increase community participation in the DAT process (mainly by day laborers), and the possibility of wanting to make it an entirely community-led organization. Hence, through 9 weeks of participatory observation, 17 interviews (with both day laborers and DAT volunteers), and our engagement and volunteer work on 6 wage theft cases, we were able to gather data, code for themes, and analyze the results to contribute recommendations for the DAT as well as write policy briefs related to the subject.
To learn more about some of the key briefs and findings of our research, please read the following upcoming blogs:
- “Challenges for Day Laborers in Denver” by Ariane Williams: A brief overview of the social and legal challenges day laborers face in the United States and in Denver specifically, drawing on academic and ethnographic research.
- “Day Labor and Immigration Status: Formation of an Inequitable Relationship” by Aaron Nilson: A discussion on the link between immigration status and wage theft and its role in the exploitative relationship between employers and day laborers.
- “In Between the Legal Lines: The Effect of Labor and Unemployment Laws on Immigrants” by Nathaniel Kern: How “protective” labor and immigration laws, in reality, disenfranchise immigrants in the US, and especially, undocumented workers.
- “Clarifying DAT: The Necessity for Mission & Identity” by Joanna Beletic: A research-based discussion on the necessity to clarify the DAT as either a service-based organization or a community-based cooperative.
- Wage Theft: Tackling DAT’s Differing Perceptions, Increasing Outreach, & Addressing Fear” by Andrea Mártires Abelenda. A research-based approach on how the DAT can maximize its impact in the fight against wage theft in Denver and become more community led.
*RESEARCH & DATA NOTE: Study data were collected and managed using REDCap electronic data capture tools hosted at University of Denver.1 REDCap (Research Electronic Data Capture) is a secure, web-based application designed to support data capture for research studies, providing 1) an intuitive interface for validated data entry; 2) audit trails for tracking data manipulation and export procedures; 3) automated export procedures for seamless data downloads to common statistical packages; and 4) procedures for importing data from external sources.