Already battered by long shifts and high infection rates, essential workers struggling through the pandemic face another hazard of hard times: employers who steal their wages.research shows.
Most businesses contacted about this story declined to comment and several business and industry groups contacted by Public Integrity did not immediately respond to requests for comment. On top of that, the division often lets businesses avoid repaying their employees all the money they’re owed. In all, the agency has let more than 16,000 employers get away with not paying $20.3 million in back wages since 2005, according to Public Integrity’s analysis.
Through much of the Jim Crow era, the federal government ignored racial disparities in pay. It wasn’t until the Great Depression that Congress first tried to establish a national minimum wage and overtime pay for workers. To get Southern Democrats to vote for the Fair Labor Standards Act of 1938, Northern Democrats agreed to exclude agricultural laborers, nannies and housekeepers from the law’s protections. In the South, most of those workers were Black.
With help from an attorney at Adelante Alabama Worker Center, Callejas sued the owner of the hotel, AUM Pelham LLC. The company denied that Callejas was hired at $10 an hour or that she worked overtime, but it agreed to a settlement. Company owner Rakesh Patel did not respond to requests for comment.
“The little guys have to speak up because people — the bosses — are taking advantage of their workers,” Palacios said in a video call from her home in Queens. Circle-K Stores denied the underpayment allegations in court filings, though it ended up settling the case for $2,500 in October. But data from the Labor Department shows that the company repeatedly takes wages from its employees, with few repercussions.
G4S Wackenhut and its subsidiaries, which provide security services to companies and courthouses, illegally denied nearly $3.3 million to 1,605 employees. Federal investigators never ordered the company to pay damages to employees and only issued a fine in nine of 47 cases, totaling less than $41,000. Though G4S Wackenhut later repaid employees in nearly all the cases, it didn’t pay full back wages on two occasions, and the Labor Department closed those cases anyway.
“The department exercises its prosecutorial discretion in determining whether to litigate specific cases, based upon careful consideration of our priorities, resources, and mission,” Jessica Looman, principal deputy administrator for the agency’s Wage and Hour Division, wrote in a statement. “If all you do is collect wages, why would a company bother complying until walks through the door?” she said.
“This tells us that wage theft is no accident,” Lee told city lawmakers. “It’s not a few bad apple employers or a few new businesses that don’t understand the law, but rather a calculated approach by employers to maximize their profits on the backs of their workers.”
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