Federal, State, Local Agencies Pursue Claims of Wage Theft

A seminal 2009 study, "Broken Laws, Unprotected Workers," found that workplace violations including wage theft "are severe and widespread in the low-wage labor market." All workers -- regardless of legal status, race, gender and nativity -- are at risk of workplace violations, the study found; some groups "are more vulnerable than others." That includes immigrants, especially undocumented workers.

Simply put, wage theft happens when employees are denied their rightful pay or benefits, whether through minimum-wage and overtime law violations, altered work records, misclassification of employees as independent contractors, stolen tips or failure to pay at all.

According to the U.S. Department of Labor, misclassifying employees as independent contractors can cheat them of minimum wage, overtime compensation, unemployment insurance, family and medical leave, and a safe workplace. It also deprives the government of tax revenue, which means other taxpayers pay the price.

As is the case across the country, the fight against wage theft in Rhode Island takes place at the federal, state and grassroots levels.

David Weil, director of the U.S. Labor Department's Wage and Hour Division, says construction, agriculture and landscaping, home health care, janitorial and domestic work, retail and hospitality are among the low-wage industries where wage theft is prevalent -- low-wage industries "where there are a high proportion of immigrant workers."

"We enforce laws for workers in the U.S., and our laws cover workers regardless of immigration status. It's not relevant for people's protections," Weil said in a phone interview from Washington.

The Wage and Hour Division covers about 135 million workers, and about 7.3 million workplaces, with about 1,000 investigators.

Enforcement of the Fair Labor Standards Act "is the bedrock," and the key is outreach to employers about their responsibilities under the law, and to workers about their rights under it, he says.

An ongoing enforcement targeting restaurants in Rhode Island and Connecticut has collected more than $1 million in Rhode Island, says Don Epifano, assistant district director of the Wage and Hour Division office in Providence.

At the state level, Governor Raimondo recently established a Workplace Fraud Unit within the Department of Labor and Training as part of a four-point plan to crack down on workplace fraud. Three of the four new positions are wage examiners. To date, the unit has reached more than $1 million in settlement agreements with companies that admitted violating wage laws.

DLT Director Scott Jensen says the unit is focused on misclassification of employees as independent contractors.

The DLT also refers cases to the attorney general's office that it believes warrant criminal prosecution.

The Rhode Island Center for Justice, a nonprofit public-interest law center in downtown Providence, opened in March in cooperation with the Roger Williams University School of Law. It strives to protect the legal rights of "vulnerable individuals, families, and communities in Rhode Island."

The Center for Justice conducts bimonthly legal clinics as part of a "Wage Justice Project," at Fuerza Laboral in Central Falls -- one of the Center's three partner organizations. Although Fuerza works primarily with immigrants, it also works "with American-born low-wage workers of all races and ethnicities" to fight exploitation.

Says Robert McCreanor, the Center's executive director: "In general, our legal system works only when people have access to qualified legal assistance. Employers, when they're sued, almost always do .... A worker without legal representation is unable or unlikely to effectively bring a claim."

Community activists have pushed successfully to strengthen Rhode Island's labor laws, including a 2012 law that increases penalties for employers who commit labor-law violations.

But they say enforcement has been weak, and in frustration they've turned to direct action that includes public protests, job-site demonstrations, and sometimes, surprise early-morning protests outside employers' homes.

The Rhode Island Jobs with Justice coalition is among those on the front lines. Members include community organizing groups, two dozen local labor unions, and faith organizations.

Outgoing executive director Jesse Strecker emphasizes that wage theft affects "all kinds of low-wage workers, sometimes even unionized construction workers. It happens at major corporations like McDonald's and Burger King and Wendy's, "and small mom-and-pop stores and in between."

Still, wage theft is "more pervasive among immigrant workers, and some of the examples you see are more severe," he says.