Why the New Law Combating Wage Theft in Chicago’s Cook County is a Big Deal

Kevin Solari February 17, 2015

The Cook County Board President said the law "will make Cook County a national leader in targeting wage theft.”

In a win for local work­ers, last week Illinois’s Cook Coun­ty Board of Com­mis­sion­ers unan­i­mous­ly passed what work­ers’ advo­cates say is one of the strongest ordi­nances to com­bat wage theft to date in the U.S.

The Cook Coun­ty Wage Theft Ordi­nance aims to pun­ish com­pa­nies guilty of short­chang­ing their work­ers by tak­ing away lucra­tive coun­ty con­tracts and var­i­ous tax incen­tives. Unscrupu­lous employ­ers can steal from their work­ers in a num­ber of ways, includ­ing not pay­ing a min­i­mum wage, incor­rect­ly clas­si­fy­ing employ­ees as con­trac­tors, steal­ing tips and not pay­ing over­time. Cook Coun­ty Board Pres­i­dent Toni Preck­win­kle said the ordi­nance would be a mod­el for sim­i­lar leg­is­la­tion nationwide.

The ordi­nance uses the eco­nom­ic lever­age of the coun­ty to remove eco­nom­ic incen­tives from employ­ers who steal wages. Busi­ness­es con­vict­ed of wage theft could risk los­ing their busi­ness licens­es, as well as being barred from receiv­ing con­tracts with the coun­ty and prop­er­ty tax incen­tives for a peri­od of five years.

In 2013, Arise had suc­cess pass­ing a sim­i­lar ordi­nance in Chica­go (which is locat­ed in Cook Coun­ty). Under that ordi­nance, com­pa­nies con­vict­ed of wage theft would have their busi­ness licens­es revoked. After the suc­cess of that cam­paign, accord­ing to Adam Kad­er, direc­tor at Arise’s Work­er Cen­ter, they want­ed to explore what could hap­pen at the coun­ty lev­el. A major cam­paign this sum­mer sur­round­ing Source Inter­link, Kad­er says, sped things up.

It showed in a dra­mat­ic way, to elect­ed offi­cials, why wage theft is a fact that mer­its atten­tion,” says Kader.

When Source Inter­link, a mag­a­zine pub­lish­ing com­pa­ny, shut down its McCook, Illi­nois, dis­tri­b­u­tion cen­ter with­out notice on May 30, over 200 work­ers were left with no work or sev­er­ance pay. The Illi­nois Work­ers Adjust­ment and Retrain­ing Noti­fi­ca­tion Act requires large com­pa­nies to pro­vide 60 days’ notice about the lay­offs, but Source Inter­link did not. Arise sup­port­ed the work­ers in find­ing new employ­ment and in a class action law­suit to recov­er their 60 days’ worth of wages against Source Interlink.

Arise also brought the issue to the atten­tion of Jef­fery Tobol­s­ki who, in addi­tion to being a coun­ty com­mis­sion­er, is the May­or of McCook. Tobol­s­ki said that wage theft was a grow­ing prob­lem in Cook Coun­ty that hurt both work­ers and law abid­ing businesses.

Many busi­ness­es are tar­get­ing low wage work­ers,” he says, who lack either the sophis­ti­ca­tion or the resources to ade­quate­ly defend themselves.”

The lan­guage of the ordi­nance was the result of col­lab­o­ra­tion between Arise and the Board of Com­mis­sion­ers. Arise worked with Tobolski’s and Preckwinkle’s staffs to turn what was Arise’s con­cept into a func­tion­ing law.

This was actu­al­ly a col­lab­o­ra­tive effort. This wasn’t like Arise came in with demands and had to fight the coun­ty over it,” says Kad­er. This was tru­ly a com­mu­ni­ty partnership.”

Aside from cov­er­ing a greater geo­graph­ic area than the pre­vi­ous wage theft law, the Cook Coun­ty ordi­nance is larg­er in scope as well, going beyond busi­ness licens­es and impact­ing the poten­tial prof­its of dis­hon­est businesses.

It received over­whelm­ing sup­port from the Board of Com­mis­sion­ers, includ­ing Pres­i­dent Preckwinkle. 

In a sense, this is the least con­tro­ver­sial law ever,” says Kad­er. This is say­ing, If you vio­late laws, you’re not going to get oth­er pub­lic benefits.’ ”

Wage theft is a prob­lem with large amounts of mon­ey at stake, espe­cial­ly for low-wage work­ers. In 2008, a joint study by the Cen­ter for Urban Eco­nom­ic Devel­op­ment, the Nation­al Employ­ment Law Project, and the UCLA Insti­tute for Research on Labor and Employ­ment found that near­ly 60 per­cent of the sur­veyed work­ers had expe­ri­enced some sort of wage vio­la­tion. The vio­la­tions includ­ed exam­ples of not receiv­ing over­time pay, breaks short­er than legal­ly required, and being paid below the min­i­mum wage. In Cook Coun­ty alone, the study found that $7.3 mil­lion is being stolen from work­ers every week.

The study con­clud­ed that many employ­ment and labor laws are reg­u­lar­ly and sys­tem­at­i­cal­ly vio­lat­ed, impact­ing a sig­nif­i­cant part of the low-wage labor force in the nation’s largest cities.”

More recent­ly, the Eco­nom­ic Pol­i­cy Insti­tute pub­lished a study in an attempt to gauge the amount of mon­ey work­ers lose due to wage theft. In 2012, the study sur­veyed the depart­ments of labor or attor­neys gen­er­al offices of nine states, and found that although those insti­tu­tions had recov­ered near­ly $1 bil­lion in stolen wages, around $50 bil­lion is being stolen from work­ers annu­al­ly. The study sug­gest­ed increas­ing the penal­ties for wage theft vio­la­tions, not­ing that the max­i­mum civ­il penal­ty is just $1,100.

In recent years, states and local gov­ern­ments have made some progress in set­ting stricter fines for vio­la­tors, and stricter penal­ties for repeat offend­ers. Cook County’s ordi­nance, by using the car­rot and stick of coun­ty con­tracts — as well as apply­ing to first time vio­la­tors — is the harsh­est in the nation thus far, and should serve as a bench­mark for future campaigns.

The leg­is­la­tion passed today will make Cook Coun­ty a nation­al leader in tar­get­ing wage theft,” said Preckwinkle.

Kevin is an edu­ca­tor and free­lance writer in Chica­go. Fol­low him on Twit­ter at @kevinsolari_.
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