An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year

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http://www.epi.org/publication/epidemic-wage-theft-costing-workers-hundreds/

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We know this because EPI canvassed the state labor departments and attorneys general,4 consulted the U.S. Department of Labor’s annual budget, and relied on research for NERA Economic Consulting by Denise Martin, Stephanie Plancich, and Janeen McIntosh on civil litigation settlements. Here’s what we found:

U.S. DOL recovered $280 million from wage and hour violators.5
State departments of labor in 44 states recovered $172 million.
State attorneys general in 45 states recovered $14 million.
Private attorneys recovered $467 million in wage and hour class action lawsuits.6
We have not been able to determine how much more was recovered for wage theft victims by six state departments of labor (Alabama, Arizona, Delaware, Indiana, Louisiana, and Vermont) and five attorneys general (Arizona, Arkansas, Louisiana, New Jersey, and Oklahoma), so the 2012 total is greater than $933 million.

Obviously, the nearly $1 billion collected is only the tip of the wage-theft iceberg, since most victims never sue and never complain to the government. It is notable that the number of Fair Labor Standards Act (FLSA) cases filed in federal court each year has been rising rapidly, from 5,302 in 2008 to 7,764 in 2013, according to Federal Judicial Caseload Statistics reported by Seyfarth Shaw LLP.7 The number of case filings is more than five times the number 20 years ago.

Congress must do much more to control this epidemic of wage theft, and could begin by granting President Obama’s request to add 300 investigators to the staff of the Department of Labor’s Wage and Hour Division. Ultimately, the current staff of 1,100 investigators should be doubled, along with the associated staff in the office of the Solicitor of Labor, which prosecutes the division’s cases. Congress should also finish the work begun in the House of Representatives and enact the various amendments that would prohibit the award of federal contracts to firms convicted of wage and hour violations. Amendments have been added to four fiscal year 2015 appropriations bills, and similar prohibitions should be added to every appropriations bill Congress takes up.