More Workers Are Claiming eWage Theftf
By STEVEN GREENHOUSE
AUG. 31, 2014 - New York Times
MIRA LOMA, Calif. — Week after
week, Guadalupe Rangel worked seven days straight, sometimes 11 hours a day,
unloading dining room sets, trampolines, television stands and other imports
from Asia that would soon be shipped to Walmart stores.
Even though he often clocked 70
hours a week at the Schneider warehouse here, he was never paid time-and-a-half
overtime, he said. And now, having joined a lawsuit involving hundreds of
warehouse workers, Mr. Rangel stands to receive more than $20,000 in back pay as
part of a recent $21 million legal settlement with Schneider, a national
trucking company.
gSometimes Ifd work 60, even 90
days in a row,h said Mr. Rangel, a soft-spoken immigrant from Mexico. gThey
never paid overtime.h
The lawsuit is part of a flood of
recent cases — brought in California and across the nation — that accuse
employers of violating minimum wage and overtime laws, erasing work hours and
wrongfully taking employeesf tips. Worker advocates call these practices gwage
theft,h insisting it has become far too prevalent.
Some federal and state officials
agree. They assert that more companies are violating wage laws than ever before,
pointing to the record number of enforcement actions they have pursued. They
complain that more employers — perhaps motivated by fierce competition or a
desire for higher profits — are flouting wage laws.
Many business groups counter that
government officials have drummed up a flurry of wage enforcement actions,
largely to score points with union allies. If anything, employers have become
more scrupulous in complying with wage laws, the groups say, in response to the
much publicized lawsuits about so-called off-the-clock work that were filed
against Walmart and other large companies a decade ago.
Here in California, a federal
appeals court ruled last week that FedEx had in effect committed wage theft by
insisting that its drivers were independent contractors rather than 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.
Julie Su, the state labor
commissioner, recently ordered a janitorial company in Fremont to pay $332,675
in back pay and penalties to 41 workers who cleaned 17 supermarkets. She found
that the company forced employees to sign blank time sheets, which it then used
to record inaccurate, minimal hours of work.
David Weil, the director of the
federal Labor Departmentfs wage and hour division, says wage theft is surging
because of underlying changes in the nationfs business structure. The increased
use of franchise operators, subcontractors and temp agencies leads to more
employers being squeezed on costs and more cutting corners, he said. A result,
he added, is that the companies on top can deny any knowledge of wage
violations.
gWe 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,h Mr. Weil said.
His agency has uncovered nearly $1
billion in illegally unpaid wages since 2010. He noted that the victimized
workers were disproportionately immigrants.
Guadalupe Salazar, a cashier at a
McDonaldfs in Oakland, complained that her paychecks repeatedly missed a few
hours of work time and overtime pay. Frustrated about this, she has joined one
of seven lawsuits against McDonaldfs and several of its franchise operators,
asserting that workers were cheated out of overtime, had hours erased from
timecards and had to work off the clock.
gBasically every time that I
worked overtime, it didnft show up in my paycheck,h Ms. Salazar said. gThis is
time that I would rather be with my family, and they just take it
away.h
Business advocates see a hidden
agenda in these 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.
Walmart says that it seeks to
ensure that its contractors comply with all laws, and that it was not
responsible for Schneiderfs employment practices. Schneider said it gmanages its
operations with integrity,h noting that it had hired various subcontractors to
oversee the loading and unloading crews.
Business groups note that the
lawsuits against McDonaldfs have been coordinated with the fast-food workersf
movement demanding a $15 wage. gThis is a classic special-interest campaign by
labor unions,h said Stephen J. Caldeira, president of the International
Franchise Association. In legal papers, McDonaldfs denied any liability in Ms.
Salazarfs case, and the Oakland franchisee insisted that Ms. Salazar had failed
to establish illegal actions by the restaurant.
Lee Schreter, co-chairwoman of the
wage and hour practice group at Littler Mendelson, a law firm that represents
employers, said wage theft was not increasing, adding that many companies had
become more vigilant about compliance. But that has not stopped lawyers from
bringing wage theft complaints because of the potential payoff, Ms. Schreter
said. gThese are opportunistic lawsuits,h she said.
Michael Rubin, one of the lawyers
who sued Schneider, disagreed, saying there are many sound wage claims. gThe
reason there is so much wage theft is many employers think there is little
chance of getting caught,h he said.
Commissioner Su of California said
wage theft harmed not just low-wage workers. gMy agency has found more wages
being stolen from workers in California than any time in history,h she said.
gThis has spread to multiple industries across many sectors. Itfs affected not
just minimum-wage workers, but also middle-class workers.h
Many other states are seeing
wage-theft cases. New Yorkfs attorney general, Eric T. Schneiderman, has
recovered $17 million in wage claims over the past three years. gIfm amazed at
how petty and abusive some of these practices are,h he said. gCutting corners is
increasingly seen as a sign of libertarianism rather than the theft that it
really is.h
In Nashville last February, nine
housekeepers protested outside a DoubleTree hotel because the subcontractor that
employed them had failed to pay a monthfs wages. gThe contractor said they
didnft have the money, that the hotel hadnft paid them,h said Natalia Polvadera,
a housekeeper. gWe went to the hotel manager — he showed receipts that they had
paid the contractor.h
Nonetheless, the protests persuaded
DoubleTree to pay the $12,000 in wages owed.
Mr. Weil said some executives had
urged him to increase enforcement because they dislike being underbid by
unscrupulous employers.
His agency has begun cracking down
on retaliation against workers who complain, suing a Texas company that fired a
janitor when he refused to sign a statement that falsely said he had already
received back wages due him from a Labor Department investigation.
gThis is just not acceptable,h Mr.
Weil said. gYou canft threaten people to lose their jobs because they are
asserting rights that go back 75 years.h