Employers Steal Up to $50 Billion From Workers Every Year. It’s Time to Reclaim It.
A recent victory over wage theft shows what workers everywhere need to claw back their stolen pay—support, resources and enforcement.
In recent years, mainstream media has been dominated by stories of increased crime, but rarely do outlets cover one of the most common and insidious offenses in our society: wage theft.
Employers steal billions of dollars from workers every year by paying less than minimum wage, making employees work off the clock, not paying earned overtime, misclassifying workers as independent contractors and more. While wage theft is all too common, it is rarely reported. As a result, stolen wages are rarely recovered, leaving already-low wage workers even poorer — and bosses even richer. But around the country, workers have been fighting back by organizing with unions and using the tools available to them at labor departments on the municipal, state and federal levels.
In January, non-union construction workers at Unforgettable Coatings LLC who partnered with the International Union of Painters and Allied Trades (IUPAT) scored a major victory in the fight against wage theft by winning back more than $3 million that had been stolen from them. IUPAT’s success has shown that fighting back against wage theft is possible — although it can require time and resources that many workers lack.
According to the Economic Policy Institute, wage theft costs U.S. workers as much as $50 billion per year — a number far higher than all robberies, burglaries and motor vehicle thefts combined. While we’re taught to be vigilant and lock our homes and cars to prevent robberies, most workers are not trained on how to identify wage theft and claw back stolen wages. Wage theft is also more likely to affect low-wage workers, immigrant workers, and workers with less education and fewer resources.
Wage theft is particularly common in the non-union construction industry which often operates “underground,” with workers either being misclassified as independent contractors or being paid in cash off the books. The industry operates under very little oversight, with regulators either turning a blind eye to violations, not having the resources to enforce laws or not being able to pinpoint responsible parties due to multiple layers of subcontracting. And because more than 1 in 10 construction workers are undocumented immigrants, employers are often more likely to engage in abuse, as workers may not know their rights — or fear retribution for asserting them.
A surprising victory
Painters employed by Unforgettable Coatings LLC in Arizona, Nevada, Idaho and Utah fought for six years before successfully winning back stolen wages. Between 2016 and 2020, the owner of the company, Cory Summerhays, reportedly falsified pay records to avoid paying nearly 600 workers earned overtime pay, and then threatened the workers who questioned that behavior.
Cristian Cespedes, now an organizer with IUPAT Local 159 in Las Vegas, previously worked for Unforgettable Coatings and had his wages stolen by Summerhays. Cespedes, who worked at the company for nine years, told In These Times that he never got paid overtime when he was a helper, sprayer or full-time painter. And when he worked his way up to foreman and supervisor, he saw that other workers similarly weren’t getting paid overtime.
Since 2019, IUPAT has been organizing with these workers and supporting them as they’ve worked to recoup the money owed to them. After a five-month investigation, the U.S. Department of Labor obtained a consent judgment in January 2023 requiring the company and its owner to pay more than $3.6 million in back wages, liquidated damages, interest and penalties to 593 employees. According to Cespedes, the victory was monumental: “the workers would struggle with money — with Christmas, with medical bills… but nobody thought [winning our money back] was going to happen. It’s changing a lot of lives.”
The union’s hardfought success wasn’t easy — and it wasn’t quick. There are many challenges to winning back stolen wages, most notably that employers know they can generally get away with it. CBS News recently compiled a database of more than 650,000 wage theft complaints and found that state agencies ruled in favor of workers only about half the time. And even when workers did win their cases, they didn’t always get their money back: wages were not recovered in more than one third of winning cases. Meanwhile, employers who are penalized sometimes continue to engage in wage theft after paying employees back. Take Summerhays, the owner of Unforgettable Coatings: in 2013, he was required to pay $47,393 back to employees in Utah after stealing their overtime wages — yet he continued to steal from his workers even after being fined.
According to Ryan Kekeris, Communications Director of IUPAT, the union helps non-union workers advocate for themselves for multiple reasons. “We’re not only righting a wrong, we’re helping to fix injustices in our industry,” he says, adding, “on a purely economical level, when you have companies that don’t play by the same set of rules, how could a union company ever compete? It’s in our interests and our members’ interests.” But winning, when it happens, takes a long time, and even if undocumented workers know the law, it’s still a daunting process. Kekeris said in the case of Unforgettable Coatings, continuing to organize the workers over a multi-year period, through agitation and inspiration, was important in keeping their hopes high and sticking with the process.
Immigrant rights are worker rights
Kekeris told In These Times that “In our industry, you have the twin threat of, not only am I stealing your wages, but I can call ICE on you.” Even though wage theft is illegal, those who steal money from their employees are rarely charged with a crime — so undocumented immigrants who report it are not protected with U visas the way victims of other crimes might be (U visas provide temporary immigration status to undocumented people who are victims of crimes and are willing to work with law enforcement and the judicial system for the prosecution of those crimes). That’s something IUPAT is organizing to change. “One thing that our union is fighting for is getting victims of labor-related crimes, like unfair labor practices or wage theft, a process to get a U visa, or some other kind of framework to remove this obstacle from fighting wage theft,” says Kekeris. “If I’m owed even a couple thousand dollars, would I want to risk splitting up my family or [getting deported]?”
Local labor departments around the country are tasked with dealing with wage theft complaints, but laws differ state to state, and some workers have more protections than others depending on where they live. In big coastal cities like Los Angeles and Philadelphia, workers have different avenues for assistance through either the city, state or federal government. Victims of wage theft in less worker-friendly states like Alabama and Florida, however, have no state-level process for reporting claims. But it’s not just southern states where employers break the law.
Maria Garcia, a non-union drywall finisher in the Washington DC area, says she was forced to work 12 hours per day, 7 days per week for Meblis Construction, a company building an Amazon distribution center, and never received overtime pay. She spoke to In These Times through an interpreter and said that after she and other workers complained about their treatment, “They kicked me off the job… they took us out to the parking lot as if we were criminals after all our effort and sweat from long hours of work at that warehouse.”
She worked with IUPAT and the Maryland Department of Labor and, last November, won back her stolen overtime of $1,193 for the work period of July through October 2021. According to Kekeris, “the policies and the will are there, but [labor department staff] just need resources to do their jobs effectively…Labor Agencies usually don’t have enough staff to cope with the high demand of cases.”
Nationally, the Department of Labor sees the need for more staffing. In July 2021, President Biden’s Labor Secretary Marty Walsh testified on the Hill, “If we don’t have the staff and don’t have the employees to protect the workers, then we can’t be on the job sites. We can’t be checking wage and hours.” That push is also being made at the local level.
In November 2022, the Philadelphia Department of Labor’s Office of Worker Protections (OWP) launched a Community Outreach and Education Fund, which works with community organizations to build trust with workers and inform them of their rights. The office also offers compliance support and “know your rights” trainings for both employers and workers. According to Candace Chewning, the Director of the OWP, “We often hear from employers that they didn’t know they were violating the law or that their intention wasn’t to violate the law.”
In 2021, the office saw 83 wage theft complaints and resolved 39. Chewning told In These Times that complaints generally take 6 to 8 months to resolve. The OWP recovered $230,130 for wage theft and other complaints, but Chewning said that “many people who experience wage theft do not file complaints for valid reasons including mistrust of government, fear of retaliation, and futility that nothing will happen, or not happen fast enough. This means violations are not being corrected and employers repeat these same behaviors.”
Similarly, in California, the state is coordinating with worker organizations to enforce wage and hour violations in what they call the California Strategic Enforcement Partnership. They’re targeting workers in eight low-wage industries, like construction, car washes, and restaurants, and using the relationships that labor non-profits already have with workers to identify bad actors. Through this partnership, a construction company, RDV Construction, was cited $11.9 million for wage theft, but there are still challenges with the program: staffing issues and the continuing pandemic make enforcement slower and more difficult.
While wage theft is illegal and there are avenues workers can use to fight it, much like all labor law in the United States, the deck is stacked in favor of employers. According to Kekeris, “these workers have a whole lot to lose and are still putting their neck out there and fighting for justice. When I try to put myself in their shoes, that gives me hope. But I don’t want to undersell how difficult this all is.” Despite the difficulties, Garcia told In These Times, “Workers have to pursue [their stolen wages]… They have to stick through the process.”
For the workers at Unforgettable Coatings, Cespedes said, “We’re going to make sure they’re paid correctly and respected as workers.”