Wage theft -- an employer's underpayment or nonpayment of wages to workers who have earned those wages -- has severe financial consequences for workers, according to a new report that puts faces on the rampant instances of wage and hour violations in low-wage industries across the state.
Ten Triangle-area workers share their own experiences of wage theft in a report co-released by the North Carolina Justice Center and the UNC Immigration/Human Rights Policy Clinic. In a series of in-depth interviews conducted from January to April 2012, participants from a diverse set of low-wage industries shared their stories, illustrating how workers -- as well as their families and local economies -- suffer when they are not paid earned wages.
"While each worker's story is unique, common themes emerged from the interviews," said Sabine Schoenbach, a policy analyst with the Workers' Rights Project at the NC Justice Center and co-author of the report. "For all participants, wage theft created economic uncertainty, and even small wage violations had significant financial consequences. Moreover, serious barriers to redress, including the threat of retaliation, existed."
This qualitative inquiry was designed as a first look at the impacts of wage theft on North Carolina workers, the conditions that make workers vulnerable to the severe consequences of wage theft, and the options -- or lack of options -- available to workers for redress.
Wage theft and low-wage work often go hand in hand, the report finds, and low-wage workers often have the most to lose. Underpayment or nonpayment of a single paycheck can translate to an inability to pay bills or afford basic needs like housing and sufficient food. Moreover, workers may choose to not report wage theft because they fear retaliation or have difficulty finding means of redress due to lack of information or adequate finances, the report said. Not one of the ten participants in the study had been able to recoup their lost wages at the time they were interviewed.
Examples of stories from the report include the following:
- Carlos, who worked in construction, received only partial payment for his work, was denied his final paycheck at one job, and at another was forced to work overtime but was not paid overtime wages. After experiencing wage theft at multiple jobs, he noted that "one has to endure it because there is no other way out."
- Karen, a receptionist, had her hours cut from full-time to eventually only 20 hours per week. Having been on the edge of making ends meet for many years, the denial of a final paycheck after being laid off pushed her into the red.
- Roger, who worked in the restaurant industry, said that most workers felt like there was "literally nothing you can do besides go to the labor board, which so far has -- from my experience, from watching -- has done nothing."
While the report's findings are not designed to be generalizable, the stories of these 10 workers demonstrate the damaging impacts of wage theft and the need for solutions. In order to protect workers, the report said, North Carolina policymakers should address obstacles to remedying wage theft, such as threat of retaliations and financial barriers to accessing redress. Stiffer penalties for violating the law would also help deter many employers from routinely stealing workers' wages. Yet addressing wage theft in isolation isn't enough. Low-wage work increases worker vulnerability and the severity of consequences when wage violations occur. In addition to ensuring that workers are paid for the work they do, the report said, policymakers should ensure that jobs pay living wages and enable workers to support themselves and their families.
"In the wake of the one of the worst economic downturns of the modern era, the fundamental contract between worker and employer -- that the worker will be paid for the work performed -- is being repeatedly broken," said Professor Deborah M. Weissman, director of UNC’s Immigration/Human Rights Policy Clinic, which co-authored the report. "At the same time, core labor laws are failing to protect many of the state's workers. Enforcing laws to ensure that workers are paid for all hours worked and making sure that all workers have access to basic wage protections are policies that reinforce the value of work, help struggling families, and accelerate the economic recovery."
The report can be found at this link.