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Wage Theft In NYC; Ignorance or Malice?

Employers in New York are stealing from their employees while government agencies and regulators fight over how to spin it.

In June the State Comptroller’s Office released a report on the NY Department of Labor’s backlog of complaints. The report stated that there is a backlog of 17,000 cases and about 75% of those cases are more than a year old.

The report is very clear. “It is imperative that DOL do a better job resolving wage theft cases as workers across New York are often waiting too long for the compensation they rightly deserve,” said State Comptroller Thomas DiNapoli.

In 2013, 6,533 new wage theft cases were opened, setting a record for New York State. The State DOL also recovered a record high of nearly $23 million in stolen wages. In the first half of 2014, the State DOL has recovered more than $16.4 million and is on track for another record-breaking year.

The Department of Labor responded by denouncing the legitimacy of the report and pointed to the fact that the State Comptroller extrapolated its results from 49 cases. Alphonso David, the Deputy Secretary for Civil Rights at the Labor Department in NY, disagreed with the report’s findings.

“The basis for the audit was deeply flawed,” said Mr. David. “They looked at selected cases and used that as a basis to draw certain conclusions, which we determined to be incorrect and flawed. The process that the Department has used to process cases has been extremely effective.”

The Department of Labor has 112 investigators to deal with 6,000 to 7,000 new wage theft complaints each year. Janice Fine, a professor of labor studies at Rutgers University, said more investigators are needed.

“We’ve got a culture of non-compliance. Employers know that the wage complaints won’t be addressed” said Ms. Fine.

Ms. Fine estimated that there is one investigator per 100,000 workers. She said the State Department of Labor has become a complaint-based system. Ms. Fine recommended that the Department of Labor move toward a proactive and preventive system in order to crack down on employers.

“Back in the fifties and sixties they used to walk the streets and knock on the doors of restaurants and businesses and examine their accounting books,” said Ms. Fine referring to DOL investigators. She said returning to this type of policing is the only way to stop the problem.

Employers and the State Department of Labor disagree with Ms. Fine about the culture of non-compliance. James Versocki, a representative from the New York State Restaurant Association, said the instances of wage theft aren’t necessarily malicious.

“The reality is that people make mistakes. An employer may think they’re complying with the law by paying a weekly salary,” said James Versocki, alluding to difficulty complying with overtime regulations. “Is that a willful intent to take wages from the worker by a mom and pop restaurant? Probably not.”

Legal experts said the NYDOL needs more money to hire more investigators to handle the large number of cases and the court system needs to be streamlined.

The State DOL maintains it is doing a good job. “We have more workers that are aware of what their rights are, which is a good thing,” said Mr. David. He said the growing trend of wage theft complaints over the years is due to the Department’s advocacy campaigns. The next step is educating the employers.

Representatives for the State DOL, workers’ associations and experts agree that wage theft is on the rise; they just don’t agree on how to spin it.

“It’s difficult to say that you have more employers violating the law than simply not being aware of their obligations,” said Mr. David.

Sarah BarrettComment