Sitting on mountains of cash, U.S. corporations do too little to reduce income inequality – National Consumers League

The question of income and asset inequality has certainly moved center stage. Demands for an increase in the minimum wage are being met by howls of protest, and complaints about skyrocketing executive compensation, alas, are being met with apparent indifference in corporate boardrooms. So the struggle for justice continues, and NCL is right in there, as we have been since 1899.

There’s another player in this drama, though, that doesn’t get the same attention, even though it may have an even greater impact. That’s the fact that U.S. corporations are sitting on top of mountains of cash, but they’re not investing in creating new jobs. With the big increases in stock value — the Dow Jones Industrial Average gained more than 28% in 2013! — a reasonable person might think, why, let’s use some of this new wealth to help out all those unemployed Americans, our fellow citizens!

What are many corporations doing instead? They’re buying back their own stock, which increases the value of the shares still available to be traded. Great, if you’re a shareholder. If you’re one of the millions who lost their jobs in the great recession and whose unemployment benefits have just run out, not so good.

What can we do about it? If you are a shareholder, agitate! Let the company know you want it to invest in jobs, in community development, in public health. Tell the executive leadership to get off the sidelines. If you’re a public employee, contact your retirement system managers and tell them you don’t want them investing in companies that are basically on strike against unemployed and underpaid U.S. workers.

This holiday season, a present for DC’s workers: Part 2 – National Consumers League

Second in a two-part series examining the new worker protection bills just passed by DC City Council.

Earned Sick and Safe Leave Amendment Act of 2013 (bill text) — extends protections to 20,000+ new workers and boosts enforcement to ensure that the hundreds of thousands of workers already covered are actually able to get the leave they earn under the law.

The bill as a whole will go into effect once funds for implementation are included in DC’s spring 2014 budget.

Covering Tipped Restaurant Workers

First and foremost, the bill extends paid sick days to tipped restaurant workers, who were carved out by an amendment when the original Accrued Sick and Safe Leave Act passed in 2008. The bill guarantees that these workers will receive their normal base wage or the full minimum wage (currently $8.25) for each hour of leave they use, whichever is higher. They will accrue one hour of paid leave for every 43 hours worked, up to five days per year.

No More Year of Waiting for Leave

Current law allows employers to wait a whole year before letting their employees accrue even a single sick day. The bill would guarantee that workers in all industries can start earning sick days from their first day on the job and could start using them after 90 days and would close a loophole where workers could be fired and then rehired in order to cancel their accrued leave. Especially in high turnover industries like child-care, cleaning, security, construction, and restaurants, these changes are huge victories.

Real Enforcement Mechanisms

The bill includes some of the best enforcement mechanisms in the country for any paid leave bill. Employees who are denied paid sick days will get to choose between filing an administrative claim with the DC Office of Wage-Hour or suing in court. Either way, in addition to any lost pay for the days they took off, they would be owed $500 in damages for each day they were forced to work instead of taking leave they had earned, interest for pay owed, reinstatement if they were fired or demoted for taking leave, and attorneys fees and court costs to help enable them to bring a claim.

Workers will have three years to file a claim and longer if their employer failed to post the required notice of paid sick leave rights. Businesses will be required to keep records of hours worked and leave accrued for at least that long and, if they fail to keep required records, employees’ testimony about the failure to be paid leave will be presumed true. The District government will also be able to assess enforcement costs and $1000 or higher civil penalties for violations as well as suspend business licenses until the violations are cured.

To encourage employees to come forward and speak out about violations, the bill includes strong retaliation protections not only when workers file official complaints, but also when they advocate for their rights directly to their supervisor, share information during an investigation, or share information about the right to sick leave with their co-workers.

Public Education

Finally, the bill provides for a public education campaign to ensure workers and employers know about the new law and how to comply with it.

Minimum wage movement building momentum – National Consumers League

Our economic recovery is well underway, the stock market has reached record highs, and corporations are registering record profits. Yet American low-wage workers are struggling. A movement to increase the minimum wage, however, is gaining momentum. What could this mean for workers across the country? Will the federal government act to lift millions of Americans out of poverty.

“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty, and raise the federal minimum wage to $9 an hour. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.”

– President Barack Obama, 2013 State of the Union Address

Our economic recovery is well underway, the stock market has reached record highs, and corporations are registering record profits. Yet American low-wage workers are struggling. The federal minimum wage of $7.25/hr has not increased in four years, and the tipped minimum wage has remained stagnant for 22 years at the meager $2.13/hr. A movement to increase the minimum wage, however, is gaining momentum. How will this turn out for workers across the country?

At a time when unemployment remains high, the biggest employers of low-wage workers are able to play a game of supply and demand with workers and salaries as pawns. High unemployment rates means no need for competitive wages; if one person quits, another worker (or 50) will be anxiously waiting to fill the position. Unless new legislation mandating an increase in the minimum wage is passed, big companies can continue to pay low wages, and low-wage workers will continue to suffer.

This week, fast food workers are holding a series of one-day strikes in cities across the country. From New York, to Chicago, to Kansas City, St. Louis, Detroit, Milwaukee, and Flint, workers will take to the streets, risking their jobs, to demand increased wages. These strikes follow a series of stoppages by hundreds of federally contracted workers in Washington, DC last month.

Big companies claim that they cannot afford to pay workers more money. A close examination of their financials, however, tells a much different story. According to the National Employment Law Project (NELP), 78 percent of the 50 largest low-wage employers have been profitable every year for the last three years. During this time, the average top executive has received a $9.4 million salary each year.

Median pay for chief executives at the nation’s top corporations jumped 16 percent last year. Between 2006 and 2012, the bottom 20 percent of workers, however, have seen their income fall 5 percent—proof that the rich keep getting richer and the poor keep getting poorer, with a growing income gap.

In addition to stagnant wages, many companies have devised other methods for ensuring that what they pay their employees remains low. Caterpillar Inc., for example, pressured its long-term employees to accept six-year pay freezes despite record profits of $4.9 billion last year. Walmart has started hiring only temporary workers to fill open positions. Employees who work part time make, on average, $7/hr less than their full-time counterparts.

Despite some growth, the economy could use a boost. Increasing the minimum wage would result in a raise for millions of Americans and, with more money in their pockets, millions of consumers would spend more.

In his State of the Union Address, President Obama proposed a $9.00 minimum wage; the Fair Minimum Wage Act of 2013 (S. 460) (H.R. 1010) proposes a $10.10 minimum wage; the Washington, DC City Council recently approved a $12.50 minimum wage at big-box stores.

What do you think? Is it time to raise the minimum wage? Join the discussion at our Facebook page.

Saving workers’ lives with the ’10 cents’ pledge – National Consumers League

NCL has launched the 10 cents pledge campaign to harness consumers’ collective power and to send a message to retailers that we American consumers really do care about the health and safety of workers overseas who manufacture our clothes.

On April 24, in Bangladesh, the Rana Plaza garment factory collapsed and more than 1,100 people died. We have to do everything in our power to make sure that type of disaster never happens again.

The Worker Rights Consortium has calculated that for $3 billion total, every factory in Bangladesh could be renovated and updated to meet basic safety standards, preventing such tragedies. Updates would include construction of proper fire exits or fire escapes, as well as installation of emergency lighting, safety equipment, and electrical rewiring. Recent events have demonstrated the devastation and death that are inevitable when factories do not have these safeguards.

There is an estimated 7 billion individual garments imported every year from Bangladesh. A mere 10 cents tacked on to the price of each garment would generate $700 million a year – more than enough revenue to cover these necessary factory updates.

While European countries are making moves to show their support for improvement, only two American retailers (PVH and Abercrombie & Fitch) have signed an accord agreeing to improve factory conditions for workers in Bangladesh. Other American retailers including Walmart, GAP, JC Penney, and others think American consumers would be unwilling to pay the extra 10 cents needed to keep thousands of workers out of harm’s way.

Consumers need to SPEAK UP and let retailers know we are willing to pay 10 cents. Sign a pledge that you will pay 10 cents more to protect workers. When consumers band together, they have amazing power to influence even the biggest corporation’s decisions.

Let your voice be heard! Take the 10 cents pledge today!

Bangladeshi factory collapse igniting worker activist cries for improved safety – National Consumers League

The death toll following the Rana Plaza building collapse in Bangladesh on April 24 has climbed to more than 1,000. There are hundreds of people – mostly women – injured and countless others still missing. In the wake of this tragedy, perhaps the deadliest ever garment-factory disaster, it is clear factory safety must be reexamined, and worker’s rights in Bangladesh must be given the highest priority.

Deadly factory disasters are, unfortunately, nothing new. Last fall, NCL observed that the Bangladeshi factory fires that keep killing workers are reminiscent of the Triangle Shirtwaist Factory fire in the United States in 1911. That fire in New York City killed 146 — mostly immigrant – workers, galvanizing the labor community and government to make workplaces safer. Factories put in place fire codes, sprinklers, and new restrictions related to smoking and open flames inside the factory. Advocates hope the recent factory disasters in Bangladesh will have a similar effect on improving factory conditions for workers abroad.

The current situation in Bangladesh is complex, and there is much blame to go around. It would be easy to point to the Bangladeshi government, which often fails to enforce worker safety laws. What’s shocking is that a mere 24 hours before the Rana Plaza collapse, police warned that the building was unsafe to occupy after large structural cracks appeared in the support pillars. Factory owners decided to reopen the building the next day, forcing workers back inside. Those who refused to enter the building were told they would have to work three days unpaid for every day they missed.

The local and federal government in Bangladesh also has not provided a secure environment for workers to unionize and gain collective bargaining rights. Although unions are technically legal in Bangladesh, many reports suggest that those who act to protect themselves and fellow garment workers often face an uncertain fate. Aminul Islam, a Bangladeshi worker activist, disappeared under questionable circumstances last September. Days later, Islam’s body was found; he had been tortured and murdered. Many suspect his death was politically motivated.

It would also be easy for retailers to leave Bangladesh, following an example set by Disney earlier this week. To shed the label “Made in Bangladesh” might be a good PR move, for any affiliation with a country so riddled with worker safety issues can only have a negative impact on sales. Companies may be tempted to find the next frontier for cheap labor, a country that has not yet been burdened with the negative reports attributed to Bangladesh, and begin making cheap garments there instead.

This solution, however, could strip 3.5 million Bangladeshi workers of a paycheck. The garment industry pays workers an average of $38 per month, and while that figure may seem insignificant in America, in Bangladesh it provides an opportunity to escape poverty. If other retailers were to follow Disney’s lead, it could devastate the Bangladesh economy and reverse years of upward mobility among the poor.

The major retailers – those companies that reap billions in profits from selling products made in Bangladesh – bear the responsibility to mandate higher safety standards and worker protections. These companies include some of the biggest retailers in the world such as Walmart, J.C. Penney, Mango, Benetton, H&M, The Children’s Place, GAP, and Dress Barn. Currently, many of these companies perform social audits, a practice we and other labor groups call a façade. A 60-page report from the AFL-CIO claims the social auditing program accommodates major corporations at the expense of protecting workers.  Reports of factories being certified as safe just weeks before a collapse or fire raise serious question about these so-called safety audits.

So what can consumers and activists do?

Congressman George Miller, the Ranking Member of the U.S. House Committee on Education and the Workforce, laid the groundwork for a new independent and transparent monitoring system called the Bangladesh Fire and Building Safety Agreement. This template would more thoroughly protect worker’s rights and guarantee minimum safety requirements in factories, including that audits be conducted by independent safety experts that timely repairs be made to violating facilities, and that brands terminate contracts with a factory that does not meet high standards for keeping workers safe. Further, this agreement provides labor protections for workers. Major retailers including Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, Arrow and GH Bass & Co., have signed on to this new agreement. Others retailers must now be pressured by consumers and activists to follow.

While Rep. Miller’s proposal takes important steps to ensure increased factory safety, there is more that can be done. Western retailers must take independent steps to ensure increased worker protection. If the Bangladeshi government lacks the capacity to provide sufficient labor oversight, it is the job of those companies who make massive amounts of money from Bangladeshi labor to ensure those workers can safely unionize. Adidas, this week, announced a new program that encourages workers in Asia to anonymously report grievances through text messages directly to the company. The ability to blow the whistle without fear of being fired or blacklisted is an essential worker protection.

Those companies who play by the rules, and show they are willing to make investments to keep their workers safe, should be rewarded for doing so. For 114 years, NCL has worked to eliminate harsh, unregulated working conditions in factories. Florence Kelley, NCL’s first Executive Secretary, championed a “White Label” program over 100 years ago. This NCL seal of approval was displayed on stores that fought against child labor practices and endorsed 8-hour workdays. Consumers were urged to boycott stores that did not earn this certification.

Would a certification program work today? A certification process, like the White Label debuted by NCL a century ago, would give consumers the opportunity to check labels and only spend money on products from those companies who demonstrate the willingness to protect workers throughout their supply chain.

There are modern examples of how this can work. The GoodWeave label serves this function for the rug industry. In order to earn certification, companies must sign a legally binding contract to: adhere to child labor protection standards, allow unannounced random inspections by local inspectors, and pay a licensing fee to support the monitoring of the GoodWeave program. A similar labeling program could be implemented for clothing. If consumer awareness were raised and people began to consistently check labels, only those companies who are socially aware and willing to take the necessary steps for certification would thrive.

Congressman Miller has proposed a rational, realistic model to improve worker safety abroad. The Bangladesh Fire and Building Safety Agreement will create a binding contract for Western retailers and ensure they play by the rules. This issue deserves more legislative attention, and consumers need to understand that they too serve a role in protecting worker’s abroad. A petition on Change.org urging retailers to sign onto the Bangladesh Fire and Safety Agreement has already collected more than 100,000 signatures. Consumers should sign the petition, check the labels on the clothes they purchase, and continue to put pressure on retailers to protect worker’s rights and ensure factories are safe.

Dozen states, cities ringing in New Year with minimum wage increases – National Consumers League

With the turning of the calendar to 2013, ten states and two large cities have increased their minimum wage for low-wage workers. Is your city or state one of them?

Washington continues to lead the nation with the highest state minimum wage and is the only state with a minimum wage higher than $9 an hour. As of January 1, 2013, its minimum wage is $9.19 per hour. Nine other states also increased their minimum wages at the first of the year: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, and Vermont.

State

Increase

New Wage as of Jan. 1, 2013

Arizona

$0.15

$7.80

Colorado

$0.14

$7.78

Florida

$0.12

$7.79

Missouri

$0.10

$7.35

Montana

$0.15

$7.80

Ohio

$0.15

$7.85

Oregon

$0.15

$8.95

Rhode Island

$0.35

$7.75

Vermont

$0.14

$8.60

Washington

$0.15

$9.19

As of the first of the year, San Francisco continues to lead nationwide minimum hourly wages – federal, state, county, and city; and is the first in the nation to top $10 an hour. The minimum hourly wage increased by 31 cents from $10.24 to $10.55 per hour. Albuquerque, New Mexico also increased their city minimum wage by a dollar to $8.50 an hour.

This New Year, be sure to take the time to examine your paystub and double check that you’re being paid the correct amount. Remember, the Department of Labor has tools to help you track your pay, overtime and vacation time – an app for your smartphone and a printable work hours calendar in English and Spanish.

Seasonal workers: avoid wage theft this holiday season – National Consumers League

‘Tis the season of temporary holiday work. As unemployment continues to hover around eight percent, many Americans will be on the lookout for seasonal work this year. But before starting any new job, workers need to familiarize themselves with the potential pitfalls of seasonal or temporary employment to avoid becoming a victim of wage theft.

One of the most important things new hires need be aware of is their worker classification–whether they are labeled as an employee or an independent contactor in their job description and tax forms. A worker classified as an independent contractor is not entitled to employee rights under the Fair Labor Standards Act (FLSA). FLSA rights include the right to the minimum wage, the highest rate available between the federal ($7.25 per hour), state, city, and county minimum wages, anti-discrimination protections, workers compensation, and overtime pay. During tax time, an independent contractor receives a 1099 tax form in place of a W-2 form. Employers don’t pay payroll taxes for independent contractors, so contractors are on the hook for the back taxes to both the IRS and the state tax board.

According to the FLSA, full-time employees are legally entitled to overtime after working more than 40 hours a week for the same employer; overtime compensation is defined as 1½ times the regular hourly rate. By federal law, the workday begins immediately upon entering the workplace and includes the time it takes to don a uniform or set-up. Work time ends when one leaves the workplace and includes the time it takes to clean up or restock inventory.

Knowing the law and keeping proper records is critical for workers to ensure that they are being paid the amount they are owed. Workers should save any and all payroll stubs and double-check that the number of hours worked, rate of pay, paycheck deductions and that the official/legal name of the employer is correct. To help American workers calculate how much they should be earning, the U.S. Department of Labor has created a free app for smartphones to help track workers track their hours and determine the exact amount employers owe.  The tool is exceptionally useful when there are any paycheck discrepancies.

Remember this holiday season that it’s important to arm oneself with as much information and tools as possible to ensure that one does not become a victim of wage theft. For more information on ways to prevent wage theft please visit the National Consumers League’s Wage Theft Web pages, the U.S. Department of Labor Wage & Hour Division, one’s state labor department or a local workers’ center.

One worker’s tale of blatant wage theft – National Consumers League

The fact that millions of Americans are out of work makes daily headlines, but a far less publicized problem is robbing working Americans of their full paychecks: the growing issue of wage theft.

A man we’ll call “Parker” recently came to NCL with his story: Parker, a skilled construction worker, had relocated back to North Carolina and was having a hard time landing a job. After weeks of searching, he was thrilled to find an opening at a firm that specializes in office construction and remodeling. Parker’s enthusiasm for his new job was short-lived. After he was hired, his employer informed him that he would be required to complete 40 hours of unpaid “training,” which for Parker meant a full week of arduous, physical work dismantling cubicles and work stations and replacing them with new ones.

“The ‘training period’ is nothing but a scam,” explains Parker. “We work as a team; no one needs to show you how to load or unload a truck full of old furniture, it’s common sense. The ‘training’ was just us paying him back for working for him.”

“According to the Fair Labor Standards Act (FLSA), training that is mandatory, work-related, and during business hours, needs to be paid to be in accordance with federal labor law,” explains Michell K. McIntyre, the Project Director of the National Consumers League’s Special Project on Wage Theft. “Forcing employees to work a job for no pay on the ruse that the work involves “training” is exploitation in its simplest form.”

After Parker reluctantly worked a full week for no pay, he learned that his employer had devised a myriad of unscrupulous excuses to reduce the pay further. Parker was hired with a starting a wage of $10 dollars an hour, but after daily deductions for gas to transport him and co-workers to the construction site and the “privilege” of using the tools necessary for the job, along with sporadic charges for other equipment the employer claimed were “missing,” Parker was making far less than initially promised.

“We have to pay $10 dollars a day to cover the gas it takes to get us to work sites and to use the tools,” says Parker, frustrated. “That’s one hour every day that we don’t get paid for; that adds up to about $160 to $200 a month that comes straight out of our paychecks.”

Automatic deductions not included, Parker doesn’t even get paid for all the hours he is at work. Parker reports to work at 7 am but the company van that transports workers to construction sites often doesn’t show up until much later, and it could be another half hour to an hour before the workers actually arrive at the work location. Parker and his coworkers can only clock in and begin earning their hourly wages once they are physically at the construction site.

The FLSA defines the workweek as the total amount of time an employee is required to be on an employer’s premises or work site. A workday can be longer than the employee’s scheduled shift or hours, but all additional time needs to be paid. In Parker’s case, several hours worth of pay are regularly subtracted from his paycheck.

“We have to report to work at 7 am, but the van that gets us to the location can show up well after that. When I work at two different sites in a single day, the time it takes for me to get from one job to another is subtracted from my time […] there have been times where I worked 15 hours and only got paid for 11.”

“According to the US Department of Labor’s Wage & Hour Division, time spent by an employee in travel as part of their principal activity, such as travel from job site to job site during the workday, is work time and must be counted as hours worked,” says McIntyre

Although wage theft victims often aren’t even aware of the fact that they are being victimized, in Parker’s case the violations are so egregious that he and his coworkers have come to understand that their employer is breaking the law. However, that knowledge is of little help.

“A lot of us don’t want to complain too much ‘cause we don’t want to lose our jobs. I’m trying to line up another job but I haven’t found one yet, so for now, I need this job,” explains Parker. “If you make too much noise you get a text at night saying you are laid off; I can’t afford that right now.”

National Consumers League has provided support and direction to Parker as he seeks redress for the wage theft he has experienced. Parker has already contacted the U.S. Department of Labor and the North Carolina Justice Center to help recoup his lost wages, but to start formal proceedings Parker would have to give out identifying information—something he is not yet prepared to do.

The U.S. Department of Labor Wage and Hour Division has resources to help victims and potential victims of wage theft. Its program, We Can Help, has a Web site (www.dol.gov/wecanhelp) and tools to help workers track their pay, overtime and vacation time – an app for smartphones and a printable work hours calendar in English and Spanish.

Parker’s plight highlights how wage theft victimizes workers in two devastating ways: by robbing them of their money and then preventing them from getting help for fear of losing their jobs. For workers like Parker, whose first concern is providing for his family, the strategy is often to wait to secure another job before attempting legal action. In a tough economy with steady unemployment, wage theft victims across the nation are in for a long wait.

To learn more about wage theft, or if you or someone you know may be a victim, click here for more information.

CA making strides with new wage theft laws – National Consumers League

With the Congress tied up in partisan knots, some states have taken up the responsibility of protecting workers’ rights in the workplace. California recently passed two pieces of legislation that workers’ rights advocates are hoping will serve as a model for other states.

Recently California Governor Jerry Brown signed a pair of workers’ rights bills into law: the Wage Theft Prevention Act (AB 469) and the Employee Classification Act (SB 459). These new laws represent huge steps forward in the fight to protect workers’ rights in an otherwise pro-employer climate.

These new laws strive to prevent wage theft, strengthen existing laws, increase penalties on employers caught cheating their employees, and go after corporations cheating states out of much-needed tax revenue in the form of not paying payroll taxes on misclassified workers.

The Wage Theft Prevention Act (AB 469):

  • Requires employers to provide workers, at the time they’re hired, a written disclosure of the basic terms of employment (the pay rate, the payday, the name and address of the legal employer).
  • Requires employers to notify workers in writing when employment terms change.
  • Requires employers to keep paystub records for three years.
  • Strengthens misdemeanor criminal penalties for employers who willfully fail to pay wages due in 90 days after final judgment.
  • Allows a worker to recover attorney’s fees to enforce a court judgment for unpaid wages.
  • Strengthens existing wage bond requirements that apply to employers convicted of labor law and wage violations.

The Employee Misclassification Act (SB 459):

  • Makes it unlawful for any person or employer to engage in “willful” employee misclassification (classifying an individual as an independent contractor when he or she should really be classified as an “employee.”) This practice not cheats the state out of payroll taxes, and  robs workers of workers compensation benefits, unemployment insurance and  anti-discrimination protections and increases the likelihood that they will suffer minimum wage violations
  • Makes it unlawful to charge any fees or make any deductions in a worker’s paycheck for expenses such as space rental, services, repairs, goods, or materials, where such deductions would have been unlawful had the worker been classified as an employee.
  • Increases penalties that can be assessed against any employer for “willful” employee misclassification. Violation of the statute carries exposure for a “civil penalty” of between $5,000 and $15,000 for each violation; if the employer is found to have engaged “in a pattern or practice of (those) violations,” the civil penalty is increased to $10,000 to $25,000 per violation.
  • Requires public display of employee misclassification violation; employers, who have been found to have engaged in “willful” employee misclassification, must prominently display for one year on their Web site a notice to employees and the general public announcing that the employer “has committed a serious violation of law by engaging in willful misclassification of employees.” Employers that do not have a Web site must have the notice displayed prominently in an area that is “accessible to all employees and the general public at each location where a violation … occurred.”
  • Allows the California Labor and Workforce Development Agency and the California State Labor Commissioner to investigate and impose penalties on employers for employee misclassification violations.

Workers’ rights advocates see these new laws as good, practical examples of what can be done on the state level and would like to see them used as blueprints for other states interested in protecting their workers from the consequences of employee misclassification.

Labor Day: Demanding legal wages for hardworking Americans – National Consumers League

End-of-summer barbecues, final trips to the beach, and the hectic start of the school year are usually what come to mind with the arrival of Labor Day. But with an increasingly erratic economy, high unemployment rates, and attacks on unions making headlines, this year’s Labor Day is the perfect time to examine the many challenges currently facing the American workforce.

Labor Day was originally started by the labor community not only as a means to celebrate their union accomplishments, but also as a day for workers to air grievances and discuss strategies for securing better working conditions and salaries. Labor advocates certainly have their fair share of grievances to air this season as major corporations continue to rake in $100 billion profits while reducing employee health benefits and pensions; workers are being forced to go on strike to demand fair treatment; and employee class-action lawsuits are stacking up in courts.

One troubling labor issue that hasn’t received much attention is wage theft, in which an employer illegally underpays or fails to pay an employee at all. Wage theft affects all sectors of the workforce; both white and blue-collar workers in industries across the board are vulnerable to this particular type of violation.

Wage theft can occur in a variety of different ways, all of which illegally rob employees out of what’s rightfully theirs. Wage theft tactics include:

  • Unpaid overtime
  • Employee misclassification
  • Minimum wage violations
  • Forcing employees to working off the clock
  • Making illegal deductions from pay
  • Not paying employees at all

Employee misclassification is one of the most common forms of wage theft and has incredibly far-reaching consequences, victimizing everyone from workers to Uncle Sam. With employee misclassification, an employer illegally mislabels an employee as an ‘independent contractor’ instead of an ‘employee,’ in order to be exempt from paying payroll taxes, unemployment insurance, and workers compensation—resulting not only in diminished capital to federal and local governments but saddling employees with additional IRS taxes in the process.

A typical misclassification scenario works like this: a Plano cable TV installation company in Texas was paying its workers on a piece-work basis and offering a flat rate for every cable installation they completed. The Department of Labor’s Wage and Hour Division conducted an investigation and determined that installers should have been classified as nonexempt employees, entitled to time-and-a-half their regular rate of pay for overtime hours worked. DOL sued on the workers behalf and the company has been ordered to pay $270,696 in back over­time to the 114 workers it illegally classified as independent contractors.

While wage theft can occur in any industry, certain industries are notorious for paying their workers below the legally required minimum wage. Restaurants, hotels, and janitorial and construction companies have a high frequency of underpaying their workers for both minimum wage and overtime.  Unfortunately, it’s still legal to pay someone below the minimum wage if they’re working in agriculture or are mentally disabled.

This Labor Day, let’s honor America’s workforce by demanding that all employers, regardless of industry or color of their workers’ “collars,” pay each and every worker the compensation they’ve rightfully earned.

To bring some much needed attention to this critical issue, NCL has launched a year-long Special Project on Wage Theft to raise awareness about the nature of wage theft in the United States and educate consumers, workers, businesses, and governments about wage theft issues. Stay up-to-date on the latest wage theft battles by following us on Twitter and Facebook.