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Workers Win Court Cases, Can't Recover Stolen Wages for WNYC Radio

This story was originally produced for WNYC Radio on February 25th, 2015

http://www.wnyc.org/story/workers-win-court-cases-cant-recover-stolen-wages

The New York State Department of Labor boasts that it has recovered $169.4 million in stolen wages since 2011 through settlements and judgments against employers.

But workers are seeing very little of that money.

The DOL was unable to collect more than $101 million in wages the agency had already determined employers owed to workers during a ten-year period, from 2003 to 2013, according to a report by the SWEAT Coalition, made up of advocacy groups and lawyers.

 

The report, Empty Judgments- The Wage Collection Crisis in New York also surveyed 62 New York cases in which state or federal courts have issued judgments in civil cases, and found that $28 million owed to the workers had not been collected.

There's plenty of blame to go around: Some employers deliberately dissipate their assets to avoid paying workers – and current law does not hold employers personally accountable. Without meaningful penalties, there is little deterrence to ripping off workers, employee advocates say.

"The difficulty in collecting on wage theft claims is a widespread and well-recognized problem,” said Hollis Pfitsch, a lawyer at Legal Aid Society, which has represented hundreds of low-wage workers that haven’t been able to collect unpaid earnings.  

“Current New York law doesn't give us the tools other states have to prevent this problem," added Ms. Pfitsch, referring to a law in Wisconsin that allows judges to freeze employers’ assets during investigations.

Marcos Lino worked at Rosemary Farm grocery store for four years. Marcos worked six-day weeks, long shifts and received a day-rate which – when divided by the hours – was less than minimum wage plus overtime. The Department of Labor investigated his case and filed a judgment against his employer four years ago. He is owed $51,000 and has not yet received any money.

 

In a recent press release, New York State Governor Cuomo applauded the Department of Labor for the work they are doing. In 2014, $30.2 million was disbursed to nearly 27,000 workers – more than any previous year and a 35 percent increase in recovered funds over 2013. But advocates argue that without stronger enforcement, more investigations won’t help return more money to workers.

Judgments, like the one filed in court against Marcos’s employer, lack the teeth and government oversight necessary to enforce it.

“Employers tend to ignore it,” said Ms. Barbosa, a lawyer representing wage theft cases at Make The Road NY. “The employer can close up shop, or transfer the business to a mother or father, or leave, and now there’s a judgment against a company that doesn’t exist.”

Ms. Barbosa said a major issue for her clients is New York law does not allow judges to freeze employers’ assets at the beginning of an investigation. Advocates want stronger laws that make the employers personally accountable for wage theft.

 

Some workers have resorted to public shaming to get money from their employer. Placido Romero and Maria Corona who worked at Flaum’s Appetizing, a kosher food processing plant in Brooklyn, could not collect their money even after a judge had ruled in their favor.

With the help of Brandworkers, a community organizing group, the workers picketed in front of stores that carried Flaum’s pickles and hummus. It took years of protests before their former employer felt the pressure.

The group of 20 workers managed to convince 120 different stores to drop Flaum’s products from their shelves, only then did they get their money back. All of this, despite having the Department of Labor – and the law – on their side.

 

A study commissioned by the Federal Department of Labor found that between 3 and 6 percent of workers are not paid the minimum wage. That translates into 300,000 workers in New York State that are paid less than 8 dollars and 75 cents an hour. Workers lose about 20 to 29 million dollars in stolen wages each week.

“That number itself is alarming, but I think it’s even more powerful if you translate that into people’s budgets. And this study estimated the loss from not being paid the minimum wage amounted to something around 40% of people’s pay,” said Doctor David Weil, the Administrator of the Wage and Hour Division at the USDOL.

We simply don’t have enough investigators to attack the problem in that way. Another way I sometimes put it is… about trying to turn off the faucet than catch the water. We don’t want to play the game of whack-a-mole,” said Dr. Weil.

He said employers go out of business or shut down one business and open another under a new name to hide assets and evade judgments.

 

The SWEAT Coalition agrees; they represent many of these cases. The lawyers who work on them say they see the same thing over and over again and they say the laws are not strong enough.

At Green Café in Ithaca, New York, bussers, dishwashers, and other workers were not paid the wages they were owed by law or given regular days off. The DOL found the owner owed $623,000 for violations at his Ithaca location and another $377,000 for his deli in New York City. The Green Café closed down and the workers haven’t been able to collect the money they are owed.

On Manhattan’s Upper West Side, three workers filed a lawsuit in federal court against the owners of Saigon Grill Restaurant. Four months after the filing, the owners closed the restaurant and never showed up in court. In 2013, the court found that the workers were owed almost $181,000 in stolen wages but the workers haven’t seen any of that money.

“They organized and fought and even when they win, there’s no teeth behind it,” said Sarah Ahn, a workers’ rights organizer with Flushing Workers Center.

The hardest obstacle to overcome, according to the advocates, is that these rulings find the companies liable – not the person who owns it. This means that if the company is unable to pay, goes bankrupt, or changes owners, there is very little the worker can do to recover their money.

“That’s why people are ending up with a court judgment and it’s just a piece of paper,” said Ms. Ahn.