It is simple to point to DC’s protective laws and falsely claim that workers do, in fact, have recourse for wage theft — wage theft is the act of denying an employee their wages by withholding their stated rate of pay, overtime, or other earned compensation (e.g., vacation) –so they can rest assured that their claims will be taken seriously.
However, this is not the case as victims do not only have to deal with the Office of Wage and Hour Compliance’s (“OWH”) lack of willingness to pursue claims but also with the fact that they are left with little to no protection from retaliation by employers and little to no financial benefit if they win their case. With restaurant workers among the most victimized and as two-thirds of employees find themselves facing at least one incident of wage theft every week, lack of recourse and weak wage law enforcement leave victims trapped.
While it is also simple to point to the methods by which employers cheat the system — from misclassifying their employees as independent contractors (as they are not entitled to the same minimum wage, overtime, and other protections as employees) to not keeping record of wages (since the OWH will only seek higher wages if there is concrete proof of such wages, even if the employee has been earning more than the minimum wage under that employer for years) — the truth of the matter is this: even before victims can get to a point where they feel comfortable pursuing action against their employers, they are strongly dissuaded from doing so.
Along with the possibility of being fired for filing a claim, the fact that victims do not stand to gain much financial benefit from winning their case only allows for employers to continue their wage theft practices. And this hurts everybody.
For low-wage earners, wage theft makes the difference between being able to pay bills on time (or at all) and being able to provide for their families, a majority of them supporting at least one child.
For non-victims, it has even deeper repercussions: on the state level, wage theft reduces overall DC revenues annually, robbing the district billions of dollars in tax and payroll fraud and reducing consumer spending essential for fueling the economy. Even worse? It punishes law-abiding employers by placing them at a competitive disadvantage, essentially incentivizing wage theft.
Thus, allowing wage theft to happen, we end up feeding into this cycle of abuse — even encouraging it — at the expense of all law-abiding parties involved.
This, however, is where the “Wage Theft Prevention Amendment Act of 2014” comes in. A solution to an issue that has plagued DC for years, this act will do several things:
It will create formal procedures for wage theft victims to receive both damages and their stolen wages, increase protection against employer retaliation, increase penalties for offending employers, and ease victims’ accessibility to legal representation.
Furthermore, it will — within forty-five days of a request — grant claimants the option of having on-the-record formal hearings held by Administrative Law judges, who would have the authority to make official judgments, with default judgments issued against businesses that fail to appear. This differs vastly from victims’ current plan of action: to go to an informal, off the-record meeting that tends to take months to schedule, does not result in a formal judgment, usually ends with no resolution, and is mediated by an investigator rather than a judge.
If found guilty, the maximum penalty for wage theft would rise to $50 per day for the first violation, $100 per day for subsequent violations, and up to $500 for not providing workers with notice of their rights or similar violations. If business owners decide to not comply with administrative or judicial orders, the Department of Consumer and Regulatory Affairs would be able to suspend their business licenses and require them to post a public notice of their violations.
Moreover, the Statute of Limitations would be tolled when employers fail to post notices of worker rights and workers would be able to bring class actions or have their rights supported in court by labor or community organizations.
Finally, employers would be required to provide workers with a form detailing the rate and method for calculating their pay along with the employer’s contact information. This way, if employers refuse to keep record of wages, the worker’s testimony would suffice. Among those affected by this would be tipped workers, who receive a low minimum wage and who therefore tend to be susceptible to wage theft.
Without the “Wage Theft Prevention Amendment Act of 2014” to either prevent wage theft from happening or to penalize and award the appropriate parties in the case that it does happen, workers are left to suffer the financial and emotional repercussions of wage theft with nowhere to turn.
I urge Mayor Gray to sign the “Wage Theft Prevention Amendment Act of 2014”. It’s time to stand with workers to pay them the wages that they earned.
By Allison X Esquen-Roca, Research and Policy Fellow at Restaurant Opporunities Center-DC