On July 30, Illinois Governor Pat Quinn signed an anti-wage theft law which advocates are billing as among the nation’s toughest and a possible model for other states and/or federal legislation.
Among other things the new law makes it easier to file and win smaller cases – for amounts under $3,000 – through an administrative process in the state labor department, as opposed to enforcement entailing a lawsuit by the attorney general’s office. There were about 10,000 wage claims filed with the Illinois Department of Labor in 2009, three quarters of them under $3,000, and half under $1,500.
The new law lets employees sue individual owners, not just companies, whether they obviously knew about the wage theft or not. This is especially important when a company goes bankrupt. The law provides for a $250 fine and interest on the unpaid wages, unlike existing law where at worst employers just had to pay the back wages if they were caught.
And the new law also lets employees recover legal fees from their employer if they win a wage theft case, an important incentive for private attorneys to take cases.
Ana Guajardo is executive director of Centro de Trabajadores Unidos, which is a member of the Just Pay for All Campaign, a coalition of community and immigrant workers groups that pushed the legislation. In a statement, she said:
We have witnessed a market increase in numbers of workers who are simply not getting paid for their work. It’s a situation where basically employers are forcing their employees to give them an interest-free loan. In the unlikely case that they are caught, employers just pay back what they took.
This bill passed almost unanimously in the state House and state Senate. In April, around the time it passed in the state senate, Labor Secretary Hilda Solis visited Chicago talking about the administration’s renewed focus on wage theft after the issue was nearly completely neglected during the Bush era. Some cities and counties including San Francisco and Miami Dade County have municipal or county wage theft laws, and New York, New Mexico and Massachusetts also have strong state laws.
Chicago’s Interfaith Worker Justice organization is among the many Chicago groups that have made wage theft a high profile issue in recent years, including IWJ executive director Kim Bobo’s book Wage Theft in America. Wage theft affects many industries, including white collar ones, but it is especially prevalent in temp jobs, day labor, restaurant work, child care and other sectors of the underground and low wage economy that employ immigrants or other vulnerable workers.
Curtis Black at Community Media Workshop notes that
…some advocates describe (wage theft) as an emerging business model in an economy increasingly dependent on contingent labor.
An April study by the University of Illinois at Chicago found that Chicago workers have about $7.3 million in wages stolen from them every single week. Black’s blog notes:
The study found that foreign born workers were 1.5 times more likely than those born in the U.S. to face wage violations, and that among U.S.-born workers, African Americans were 27 times more likely than whites (and 3 times more likely than Latinos) to face workplace violations.
Since the bulk of these are lower-income workers who need the money badly and would likely spend it – pushing it right back into the local economy – this theft must have significant economic not to mention social ripple effects. A study of workers in Los Angeles, Chicago and New York in 2008 found that more than two thirds of workers suffer wage theft.
Black’s blog notes that:
Pervasive workplace violations keep working families in poverty, reduce consumer spending and tax revenues, and force responsible employers into unfair competition, threatening standards throughout the labor market, said researcher Nik Theodore.
Illinois workers note the felony charges provision in the new state law is only fair given they would be criminally prosecuted for stealing money or goods worth much less than many workers lose to wage theft.
Kari Lydersen is a Chicago-based journalist, author and assistant professor at Northwestern University, where she leads the investigative specialization at the Medill School of Journalism, Media, Integrated Marketing Communications. Her books include Mayor 1%: Rahm Emanuel and the Rise of Chicago’s 99%.