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Boss ripping you off? Here’s what to do about it

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Earlier this year, beloved celebrity chef Mario Batali agreed to settle a lawsuit brought by his employees for $5.25 million. Their claim? Batali’s restaurants were allegedly confiscating tips from workers to increase profits.

Maybe it comes as a surprise to you; maybe it doesn’t. But wage theft is a pretty common occurrence in the United States. Kim Bobo is the author of Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid-And What We Can Do About It. She says the issue is a systematic problem that’s often assumed and accepted, despite the fact that it’s illegal.

“It’s a business model that is accepted. It’s almost like the Wild, Wild West in terms of wage theft right now. It’s so pervasive in this society,” Bobo says. “I think what happens is that so many of us think it’s just an individual problem. We don’t think about it as sort of a systemic problem.”

Bobo explains that the problem exists in a variety of industries, but especially construction, retail and restaurants. Essentially, low-wage workers are targeted most. In fact, about $2,600 a year is stolen annually per low-wage worker.

And it’s not limited to skimming tips.

Types of wage theft

Bobo says overtime denial is the most common form of wage theft.

“This happens in various ways,” Bobo says. “Employees work through their lunch hour, they come in early, or clock out and stay late every day…this really adds up for low-wage workers. And many times, employers tell employees, ‘You’re not eligible for overtime.’ In this economy, a lot of people accept it, and say, ‘Well, at least I have a job.’”

Aside from stealing tips and not paying overtime, other examples of wage theft include:

  • Classifying full-time employees as “independent contractors”
  • Paying workers less than minimum wage
  • Withholding paychecks

The independent contractor thing is also pretty common. “It’s a way that some unethical employers cheat workers,” Bobo explains.

Kim Bobo

With independent contractor status, employers get away with paying less than minimum wage, because the workers aren’t classified as full-time employees, despite working 40 or more hours per week. Plus, “they get no payroll taxes paid, no worker’s compensation or benefits,” Bono adds.

“Somehow in society, there’s a whole set of employers that have it in their minds that they can just make up categories that exempts them from the labor law.”

Wage theft affects everyone

When an employer rips off an employee, not only are they being jerks to the individual, but, because wage theft is so rampant, their behavior also contributes to a larger problem.

Former White House adviser Van Jones has said that wage theft “keeps lawfully earned pay from being spent where it will do the most to strengthen our economy.”

Wealth inequality is a hot button issue right now, and it’s interesting that, although people will complain about disparity and the one percent, many people also accept wage theft because they’re simply glad to have a job. As Bobo explains, this contributes to the pervasiveness of the problem and is the type of thinking that allows employers to get away with breaking the law.

“Wamart has settled 55 class action lawsuits from managers stealing wages from workers … They can afford to pay their workers fairly, and well. But instead, there’s this very high concentration of wealth. They could do better, and they have made an intentional decision not to. Fast food chains have quality control with their food, yet there’s no regulation to make sure low-wage employees are treated fairly.”

But what about the argument that, if you don’t like Walmart, you simply shouldn’t work at Walmart?

“That’s not very realistic,” Bobo says. “There are just way too many jobs that don’t treat or pay people well. We have to organize and change this.”

What to do about it

If you’re pretty sure your boss is stealing from you, you should first learn your rights. CanMyBossDoThat.com is a great online resource for learning workers’ rights when it comes to everything from computer monitoring to paid time off.

If you know you’re being ripped off, you have the option of filing a complaint with the U.S. Department of Labor’s Wage and Hour Division. You’ll have to provide your name, contact information and the contact information of your company. Of course, you’ll also need to explain the issue.

Unfortunately, “retaliation is a common occurrence,” according to The National Employment Law Project (NERP).

“A national survey found that 43 percent of workers who complained to their employer about their wages or working conditions experienced retaliation…The national survey also showed that about 20 percent of surveyed workers never made complaints in the first place, often because they fear retaliation or because they do not think it will make a difference.”

NERP is working on amending legislation to protect employees from retaliation, via anonymity and confidentiality, among other tactics. Six states allow workers to file complaints anonymously: Colorado, New Jersey, California, Connecticut, Illinois, and New York. Nine states allow confidential complaints: Arizona, Arkansas, Kentucky, Ohio, Illinois, Nebraska, New Jersey, North Carolina, and New York.

According to Bobo, another way to fight retaliation is by getting your co-workers to take a stand with you.

“If two or more workers are organized and there’s retaliation, you can file an Unfair Labor Practice Charge.

There are about 200 Worker Centers that exist around the country. If you’re experiencing employer retaliation, they can usually help. “But if you’re doing it by yourself, it’s not going to protect you,” Bobo says, stressing the importance of taking an organized stand.

Another option for dealing with wage theft is contacting an advocate. Interfaith Worker Justice, for example, is a nonprofit organization, founded by Bobo, that campaigns for workers’ rights.

“On some level, wage theft has probably been a problem forever,” Bobo says. “But I do think it’s gotten dramatically worse in the past twenty years.”

She attributes part of that to a decline in enforcement staff. Right now, there are only about 1,000 federal investigators nationwide who make sure labor laws are enforced.

New York State has recently cracked down on cases of bosses ripping off employers. Two years ago, the State passed the Wage Theft Prevention Act, requiring guilty employers to fully reimburse their employees and pay a fine up to twice the shortchanged amount. According to news site Alternet.org:

“The previous penalties were so slight–about one-fourth of the new penalties–that many employers treated them simply as a cost of doing business. That obviously is the attitude of wage-cheating employers in other states, where penalties are minimal.”

Have you ever experienced wage theft? If so, what did (or didn’t) you do about it? 

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3 Responses to “Boss ripping you off? Here’s what to do about it”

  1. Venktesh says:

    Interesting facts on employment and wage theft! Bobo has had his own experience and seems realistic and best of the knowledge. But in this libertarian news and economy! Thanks

  2. Elizabeth says:

    Thank you for addressing this issue!

    • Kristin Wong says:

      Definitely! I didn’t really understand how important of an issue it was until talking to Ms. Bobo and learning how wage theft contributes to our income inequality. I just accepted it, too. Pretty important stuff.


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