More Workers Winning On Allegations That Their Employers Are Committing Wage Theft

September 3, 2014  |  

When you work overtime, you’re supposed to get paid for it. And more employees are saying they aren’t — and they’re suing.

A group of warehouse workers are set to get more than $20,000 in back pay each as part of a recent $21 million legal settlement with national trucking company Schneider.

This lawsuit brought in California is just one of a rash of similar suits sweeping the nation. More and more workers are charging that employers are violating minimum wage and overtime laws, erasing work hours, and wrongfully collecting employees’ tips. Called “wage theft,” workers advocates say the practice is on the rise.

Just last week a federal appeals court in California ruled that FedEx basically committed wage theft by saying its drivers were independent contractors and not employees. “FedEx orders many drivers to work 10 hours a day, but does not pay them overtime, which is required only for employees. FedEx said it planned to appeal,” reports The New York Times.

In another case, also in California, Julie Su, the state labor commissioner, ordered a janitorial company to pay $332,675 in back pay and penalties to 41 workers who cleaned 17 supermarkets. The company had forced employees to sign blank time sheets, which the company then used to record inaccurate, minimal hours of work.

Wage theft cases are all over the country. New York’s attorney general recovered $17 million in wage claims over the past three years.  And in Nashville, nine housekeepers picketed outside a DoubleTree hotel because the subcontractor they worked for had failed to pay a month’s wages. The hotel, pressured, paid the $12,000 in back pay.

David Weil, the director of the federal Labor Department’s wage and hour division, blames an increase in wage theft on changes in the nation’s business structure. Americans are using more franchise operators, subcontractors, and temp agencies and this leads to more employers tightening their budgets. One result, he said, is that the companies on top can ignore wage violations.

“We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,” said Weil, whose agency has discovered nearly $1 billion in illegally unpaid wages since 2010.

Companies claim there is a hidden agenda in wage theft lawsuits. “For example, the lawsuit against Schneider — which owns a gigantic warehouse here that serves Walmart exclusively — coincides with unions pressuring Walmart to raise wages. The lawyers and labor groups behind the lawsuit have sought to hold Walmart jointly liable in the case,” reports The Times.

Business groups also point out that the lawsuits against McDonald’s have been organized with the fast-food workers’ movement calling for a $15 wage. “This is a classic special-interest campaign by labor unions,” said Stephen J. Caldeira, president of the International Franchise Association.

But according to Commissioner Su of California, wage theft not only hurts low-wage workers. “My agency has found more wages being stolen from workers in California than any time in history,” she said. “This has spread to multiple industries across many sectors. It’s affected not just minimum-wage workers, but also middle-class workers.”

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