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New Report: State Laws on Wage Theft Grossly Inadequate

 

FOR IMMEDIATE RELEASE
Wednesday, June 6, 2012
CONTACT: Charles Monaco, Director of Communications and New Media, Progressive States Network, (212) 680-3116 x115, cmonaco@progressivestates.org


New Report: State Laws on Wage Theft “Grossly Inadequate”

New 50-State Ranking From Progressive States Network Shows 44 States Receive Failing Grades on Growing National Problem of Wage Theft; New York and Massachusetts Cited as National Leaders


States Failing to Address Wage Theft
(Map of state wage theft grades, source: Progressive States Network)

New York, NY – Wage theft, or the systemic non-payment of wages by unethical employers, is a growing problem affecting millions of workers across the country and costing states billions of dollars in lost tax revenue. Yet, only a few states are starting to address the problem in earnest through legislation – and the vast majority have laws that are grossly inadequate.

Those are the conclusions of an extensive, first-of-its-kind evaluation of state laws, Where Theft is Legal: Mapping Wage Theft Laws in the 50 States, released today by Progressive States Network. The report grades individual states across the broad body of state laws needed to comprehensively address this growing national crime wave, and concludes that 44 of the 50 states (plus Washington D.C.) deserve failing grades.

The report – complete with a 50-state map and rankings for all 50 states in multiple categories – is available for download at: http://www.progressivestates.org/wagetheft

New York and Massachusetts are cited as two national leaders in the report, receiving grades of C+ and C respectively, with other states receiving passing grades including Connecticut, Illinois, North Carolina, and California. Two states, Mississippi and Alabama, bring up the bottom of the rankings, with essentially no protections for workers who are victims of wage theft.

With anti-worker, anti-middle class agendas on the docket in many state legislatures over the past two years, and with monthly jobs numbers still showing persistent unemployment and continuing insecurity for workers who do have jobs, strengthened state protections against wage theft are needed now more than ever both for workers and states, argue the co-authors of the report.

"Working people throughout the country are losing billions of dollars each year to wage theft, and this report shows why: the laws needed to protect workers are too weak," said Progressive States Network Senior Policy Specialist Tim Judson, co-author of the report. "If 'cracking down on wage theft' were a class, it wouldn't be filled with our best and brightest in 2012. Forty-four states would fail the basic test of enacting the right laws to address the crime. With millions more people being forced into lower-wage industries where wage theft is rampant, and states losing millions of dollars in unpaid taxes and economic losses, the stakes for failure are simply too high."

"Action at the state level is particularly crucial to creating the kind of systematic change needed to combat wage theft," noted co-author Cristina Francisco-McGuire, Senior Policy and Program Specialist at Progressive States Network. "Recent victories in New York, Massachusetts, California, and Illinois demonstrate the lasting difference that a holistic approach can bring – even as more work remains to be done. As our report highlights, states can play a unique role in innovating policies to meet the constantly evolving needs of workers, and it is more important than ever for state legislators to think outside the box to truly address the struggles of their constituents."

Wage theft is an issue that affects vast numbers of families in all states. Over 60% of low-wage workers report suffering wage violations each week. As a result, they lose 15% of their earnings each year on average – a total of $2,634 per year – with the majority of workers affected supporting at least one child. In addition to the direct effect on low-wage workers, these crimes also slow down the economic recovery, the co-authors note, "by depressing the consumer spending needed to fuel economic growth and by defrauding states and taxpayers to the tune of millions of dollars."

"The findings of this report are clear: state laws are not doing nearly enough to combat the growing and unacceptable problem of wage theft," said Iowa State Senator Joe Bolkcom, Chair of the Board of Progressive States Network. "When unethical employers are able to steal from their employees at will, it hurts workers, it hurts families, and it hurts state treasuries to the tune of billions of dollars in lost tax and payroll revenue. Even in states that have laws on the books, when bad employers violate the law, the most they get is a slap on the wrist. State policymakers will find this report helpful for how it clearly outlines the scope of the wage theft problem, the comprehensive approach needed to combat it, and the states that are making headway against it. Wage theft is increasingly a moral and economic blight on our nation, and state lawmakers have a critical role to play in ensuring that theft is a crime, whether it is committed by unethical employers or pickpockets on the street."

New York and Illinois are two of the states that receive passing grades in the report. Both have passed legislation over the past two years that has bolstered their wage theft laws. Lawmakers who sponsored the laws in both states mentioned their pride in leading on wage theft with approaches that are cited in the report as models for other states to pursue – and which are already having an impact on their constituents.

"I was very happy to join Assembly Member Carl Heastie in sponsoring and passing the Wage Theft Prevention Law in New York State," said New York State Senator Diane Savino, an original co-sponsor of New York’s 2010 law that helped gain the state its number one overall ranking in the report. "The law is helping hard-working New York families in their fight for economic security and justice. It will help New Yorkers recover billions of dollars in lost wages stolen by unscrupulous employers and will help New York State recover hundreds of millions of dollars every year in lost revenue from the underpayment of wages. It will further help end the competitive advantage that dishonest businesses hold over their honest competitors. Wage theft has slowed down the economic recovery – the Wage Theft Prevention Law is changing that."

"I sponsored Senate Bill 3568 [in 2010] after it was brought to my attention that multiple employers in Chicago had failed to pay their workers their back wages," added Illinois State Senator William Delgado. "This issue drew even greater attention after reports emerged of a pair of central Illinois restaurants failing to pay $200,000 in back wages to 62 employees. Because of the law passed by the General Assembly, the Department of Labor found additional labor violations in more than 50 restaurants in the state last year alone. I am proud that I was able to empower workers and give them a means to collect the money owed to them. The Illinois Manufacturers Association played a vital role in securing the final passage."

Florida, given a grade of F in the report, shows what a failed state approach to wage theft can look like. After abolishing the state department of labor ten years ago, conservatives in the state are now focusing on abolishing a promising wage theft ordinance enacted in Miami-Dade County.

"Workers in Florida experience terrible problems with wage theft," said Jeanette Smith of South Florida Interfaith Worker Justice, one of the members of the Florida Wage Theft Task Force who helped craft and enact Miami-Dade County's landmark wage theft ordinance. "Without a state level labor department and many workers not qualifying for coverage under the federal labor department, workers in Florida were falling through the cracks. Our wage theft law in Miami-Dade County, the only one in the state, is making a huge difference – workers won back more than $400,000 in wages in just the first year. But, it's hard to explain to workers in the next county why they aren't protected from wage theft. We really need the state legislature to step up and establish a statewide wage theft law."

The report, Where Theft is Legal: Mapping Wage Theft Laws in the 50 States – complete with a 50-state map and rankings for all 50 states in multiple categories – is available for download at: http://www.progressivestates.org/wagetheft

(The authors of this report, advocates at the state level, and state legislators backing wage theft legislation including State Senator Delgado (IL), State Senator Bolkcom (IA), and others are available for comment on this story. Please contact Charles Monaco at Progressive States Network, cmonaco@progressivestates.org, 212-680-3116 x115)

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Progressive States Network (http://www.progressivestates.org) is a non-partisan, non-profit organization dedicated to supporting the work of progressive state legislators around the country and to the advancement of state policies that deliver on the issues that matter to working families: integrating immigrants into our communities, strong wage standards and workplace freedom, balancing work and family responsibilities, health care for all, smart growth and clean energy, tax and budget reform, clean and fair elections, and technology investments to bridge the digital divide. For more information visit www.progressivestates.org.

 

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