Editor’s Note: This is part of a blog series by the Office of Labor-Management Standards on the various ways unions support workers. OLMS Director Jeffrey Freund introduced the series by writing about how unions serve the interests of members and non-members alike “beyond the bargaining table.” Last month, OLMS highlighted how union support for pre-apprenticeship programs helps provide a bridge to better employment opportunities. Today’s piece looks at wage theft and the unsung role unions and labor federations play in trying to stop it from happening.
What is Wage Theft?
Imagine working hard for 10 hours a day, 6 days a week, for 5 weeks, and not being paid your wages. Wage theft is when an employer fails to pay workers some or all the wages that they earned. It disproportionately victimizes low-wage earners, including immigrants who may hesitate to report unscrupulous employers. Employers sometimes hide wage theft by misclassifying their employees as independent contractors to deflect certain financial obligations to the workers. The Department of Labor’s Wage and Hour Division enforces federal minimum wage, overtime, and other pay-related laws, and provides compliance guidance to employers regarding these laws. In addition to these federal protections, many state governments have offices that enforce state laws prohibiting wage theft.
Union Carpenters Fight Wage Theft Against Non-union Workers in Construction
Unions, labor federations, and union-community coalitions are leading efforts to help end wage theft. For example, to raise awareness of the problem in their Massachusetts’ community, members of Carpenters’ Local 336 demonstrated at a public building construction site where employers allegedly cheated non-union drywall hangers out of more than $50,000 in earned wages. Approximately $64,000 was eventually recovered for the non-union workers.
Employers that receive public funds for construction projects often must pay workers at least the “prevailing wage rate.” Prevailing wage rates are, where appropriate, derived from union rates for an occupation – established through collective bargaining agreements – that are paid in the relevant geographic region. For federally funded projects, the Davis-Bacon Act and related statutes set prevailing wage rates. Paying workers less than the federal or local prevailing wage rate is a form of wage theft.
Unfortunately, wage theft is not uncommon in the construction industry. And the detrimental effects do not just victimize individual workers; our cities and states lose tax revenues as well.
Service Employees Union Helps NYC Building Workers
Wage theft is not confined to the construction industry. The Service Employees International Union (SEIU) Local 32BJ played a key role in drawing attention to wage theft at two luxury residential buildings in Queens and Brooklyn. A state investigation concluded that over a two-year period, the property developer – who received tax exemptions from the city of New York – cheated 24 non-union janitorial, concierge, and other building services employees out of more than $700,000 in unpaid wages and benefits. In exchange for those tax breaks from the city, the developer had agreed to pay the employees working at the buildings the prevailing wage rates plus benefits, which equated to roughly $22.00 to $26.00 per hour. Instead of honoring that pledge, the developer paid the workers between $8.50 and $15.00 an hour – with no benefits. In addition to ordering the developer to pay the workers the wages it illegally withheld, the New York Attorney General fined the employer $1.8 million.
While individual workers can initiate wage theft complaints with Federal and state agencies, labor unions and worker advocacy groups frequently file them on behalf of workers. If you have information concerning potential wage theft violations of federal law, contact the Department’s Wage and Hour Division and/or your state’s wage and hour agency for guidance. The identity of persons or organizations who make complaints to the Wage and Hour Division are confidential and an employer generally is prohibited from retaliating against a worker for exercising their rights, filing a complaint or cooperating with an investigation.
To learn more about labor unions and their far-reaching impact, stop by the Department’s Worker Organizing Resource and Knowledge Center – or WORK Center. We also invite you to visit the Office of Labor-Management Standards to learn about our work to advance democracy and financial integrity among over 20,000 labor organizations in the United States.
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