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Wage Law Enforcement State Trend: Illinois Becomes Most Recent State to Crack Down on Wage Theft

A crime wave has been sweeping Illinois, with surveys of low-wage workers in the Chicago area showing an average of 146,300 cases of wage theft each week -- resulting in about $7.3 million each week in unpaid wages, or $380 million stolen from workers each year.  In order to crack down on this criminal wage theft, the Illinois General Assembly on May 3 nearly unanimously (56-0 in the Senate and 112-1 in the House) passed SB 3568, which will strengthen the state’s ability to enforce violations of the Wage Payment and Collection Act, including these new or enhanced provisions:

  • Criminal Penalties:  Both first offenses and repeat offenses will now be considered more serious crimes, with repeat offenders facing up to three years in prison.
  • Private Right of Action:  Employees are permitted to press their case in court and to recover attorney fees and other court costs. The law specifies that workers do not need to wait for a complaint filed with the Department of Labor is processed, but they can take their case directly to the state circuit court. This will relieve the state of some of the enforcement burden and allow workers to obtain relief more quickly.
  • Class Action Suits: SB 3568 for the first time expressly permits employees to file class action lawsuits.
  • Anti-Retaliation:  Employees are protected from retaliation for reporting alleged violations in public forums, such as to a community organization or at a public hearing. It also gives employees who have been subject to retaliation the right to file claims against their employers, either through the Department of Labor or in civil actions; and
  • Speedier Resolution of Claims:  Enables the Illinois Department of Labor to establish a process for adjudicating smaller violation claims more expeditiously.

The Legislature's action came in response to University of Illinois research highlighting that low-wage workers were losing an average of 16% of their earnings each year to employer malfeasance.

Wave of Wage Law Enforcement Around the Country:  Illinois' legislative action follows a growing number of states and counties enacting wage enforcement laws to address the crime of wage theft by employers.  In 2009, New Mexico, Delaware, Maryland and Iowa enacted wage enforcement laws, as did Washington in March of this year.  A wage law enforcement bill, S 07050, is now before the New York State Senate this session.  Municipalities are also taking up the issue, with Miami-Dade County passing a county-level wage enforcement law in February. The City of San Francisco also passed a strong enforcement statute as part of its minimum wage law a few years ago, and bills are expected to be introduced in the cities of Los Angeles and New Orleans

Some states have begun to address the issue through adapting their existing enforcement programs.  In the past few years, for instance, New York and California formed multi-agency task forces to compile information and target industries where violations are known to be rampant.  However, leaders in those states have usually found it necessary to strengthen the existing laws through creating stiffer penalties, expanding enforcement measures, and making the system more responsive to victims of wage theft.

The Cost to Communities from Wage Theft:  Legislators are responding to research highlighting the severe toll wage theft is taking not just on workers, but on local economies and state and municipal tax rolls.  Because low-wage earners spend a greater percentage of their income on local goods and services, wage theft on such a large scale does not merely affect workers and their families -- it has a major community-wide impact.  Research in Chicago mirrors results from other cities studied by the University of Illinois and the National Employment Law Project.  Even a business-community think tank, the Economic Policy Foundation, admits that wage theft is widespread:  it estimated $19 billion per year in unpaid overtime alone, not to mention other wage and hour violations.

The rise in wage and hour violations is particularly prevalent among businesses with a high percentage of low-wage employees and/or immigrant workers.  Lack of enforcement contributes both to downward pressure on wages and income levels and creates an incentive for employers to recruit undocumented workers, who are even less likely to know their rights and to press charges against their employers.  For this reason, forward-thinking legislators are also promoting wage enforcement as a positive measure states can take in support of comprehensive immigration reform and as an alternative to regressive, anti-immigrant measures such as Arizona’s SB 1070.  See  Progressive States Network's Promoting Wage Law Enforcement Policies in 2010 for more on key provisions, model legislation and resources to support state wage enforcement campaigns.

Resources:
Progressive States Network - Promoting Wage Law Enforcement Policies in 2010
Center for Urban Economic Development, University of Illinois at Chicago - Unregulated Work in Chicago:  The Breakdown of Workplace Protections in the Low-Wage Labor Market
National Employment Law Project - Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America's Cities
Interfaith Worker Justice - Thou Shalt Not Steal: A Toolkit on Wage Theft
Talking Points Memo - Sunlight and Enforcement Are the Best Disinfectants (Against Wage Theft)
Kim Bobo, Interfaith Worker Justice - Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About It (The New Press, 2009)