1. What is wage theft?
Wage theft refers to any time an employee earns less money than his or her employer is legally required to pay. Most commonly this includes making less than the minimum wage, less than time-and-a-half for overtime, working without the required meal and rest breaks or off the clock, and being denied pay altogether.
2. Why is wage theft a pressing issue for Los Angeles?
UCLA’sInstitute for Research on Labor and Employment’s report Wage Theft and Workplace Violations in Los Angeles (2010) found Los Angeles to be the wage theft capital of the country. Violations amount to $26 million per week or $1.4 billion per year—more than twice that of New York City or Chicago. Thirty per cent of sampled workers reported serious minimum wage violations, almost 80% were denied legally required overtime pay, and more than 80% of respondents entitled to rest and meal breaks experienced violations of this law.
3. Who is most affected by wage theft?
- Approximately 17% of all workers in L.A. County work in low-wage industries and frequently experience violations of minimum wage, overtime and break-time laws;
- Wage theft affects two thirds of the 750,000 low-wage workers in L.A. County;
- The average worker loses more than $2,600 to wage theft – 15% of their annual income;
- Workers in low-wage industries are most exposed to wage theft, including those employed by garment, cafeteria, fast-food, retail and residential construction businesses as well as those working as janitors and in restaurants or households.
4. What is being done?
Around the country, people are striving to improve working conditions:
- State, federal and local governments investigate and adjudicate claims and educate the public, but resources for enforcement remain inadequate;
- Unions fight for wages and working conditions in unionized workplaces;
- Research institutions document and analyze the problem;
- Advocates seek to increase worker protections at the policy level;
- Legal services centers provide assistance to workers experiencing wage theft;
- Worker centers organize to build power for change at the grassroots level.
5. What are key policy solutions?
- The Los Angeles Coalition Against Wage Theft, of which KIWA is a member, advocates for adoption of the Los Angeles Wage Theft Ordinance. A motion to order the City Attorney to draft this ordinance was passed in 2009. The issue has been languishing for three years in his office and the Coalition is demanding progress.
- One of the biggest challenges to overcoming wage theft is the difficulty in collecting judgments that workers have justly won through the courts or the Labor Commission (Division of Labor Standards and Enforcement). A state wage lien is a potentially powerful legal tool that enables workers to place a lien on the property of an employer who has stolen wages. Currently on the books only for the building trades in the form of a mechanics lien, KIWA and many other organizations support its expansion to other industries.