Wage Theft: When the Thieves Run the Show

HKonJBy Ashlyn Nuckols.

With Durham workers, activists and students alike taking to the streets to join in the “Moral Monday” marches, it is becoming difficult to ignore the movement that’s taking place across the nation, and on Duke’s doorstep. Supporters of the movement plan to march once again this Valentine’s day, demanding “higher wages, better health care and dignity” for local workers. While the prevalence of growing inequality has become an almost cliché criticism of our nation’s economic hierarchy, most still consider the growing wealth gap to be a necessary evil. An evil that cannot be dismissed, however, is the number of low-wage employees who work long hours only to receive no paycheck at all. Refusing to compensate an employee for their labor is not only immoral—it is illegal.

The pervasiveness of wage-theft in low-wage sectors has become increasingly evident in recent years. According to the New York Times, 2014 saw a record number of employees filing suits for unpaid work, while the Labor Department reportedly uncovered nearly $1 billion in illegally unpaid wages since 2010. Workers have begun to speak out in large numbers through this litigation and through movements like the Moral Monday marches in North Carolina and Georgia. Their success, however, has been limited. There are powerful and deeply entrenched forces preventing employees from recovering stolen wages, and it is only by weakening these forces that this is issue will be resolved and justice be restored.

Out of Sight, Out of Mind

The most common reason that employers get away with wage theft is that it almost always goes unreported. Wage theft can take many forms, ranging from a failure to pay overtime or distribute tips, to employers misclassifying workers as independent contractors and getting out of paying benefits. Employers use loopholes such as these in order to keep employees unaware of the fact that they are being cheated and to make it difficult for employees to successfully sue in court. This kind of exploitation is especially prevalent in industries employing immigrant workers, whose inability to speak English and lack of exposure to U.S. labor laws leaves them particularly vulnerable.

Even when employers simply fail to send home a paycheck, workers are often too afraid to report the blatant injustice. Many of these people are barely keeping up with day-to-day expenses and need employment far more than their employers need them. When even a week without work could mean going without food or failing to pay the rent, workers are left with very little bargaining power. The threat of being fired, or just punished with reduced hours, is enough to keep them quiet. Very few employers grant contracts that promise any kind of security to low-wage workers, allowing many employers to fire workers without any justification at all. Survey data reported by the North Carolina Justice Center shows that this abusive power dynamic results in the vast majority of both local and national wage theft cases never being brought to court.

The Price of Justice

The second challenge that victims of wage theft face is the high price tag that makes litigation all but unattainable for someone earning the minimum wage. In fact, many local workers report that they chose not to file a complaint concerning wage theft because of lack of faith in the legal system. Sadly, their misgivings are justified.

In North Carolina, for example, workers should be able to access help from the Wage and Hour Bureau. However, a 2013 study by the N.C. Justice Center reveals that none of the workers interviewed who had contacted the Bureau ever received any compensation. Some reported that their calls were never returned, while others were referred to the small claims court where they discovered that they had neither the time nor the financial resources to see a case through. Again, many of these workers are just barely keeping up with their expenses, so even if the cost of litigation weren’t an issue, the time off from work spent in court would be enough to put them in the red. While some workers are fortunate enough to get picked up as part of a class action suit paid for by an NGO, the vast majority simply have no venue through which to seek justice.

When Law is not Justice

The lucky few who are able to overcome these barriers and bring their cases to court, most often through a collective class-action suit, find themselves facing an even more daunting obstacle: the laws themselves. The extent to which our legislative bodies have stacked the deck against low-wage earners was a lesson learned by Amazon warehouse workers this past December when the 9th Circuit Court decision in their favor was overturned by the Supreme Court (Integrity Staffing Solutions Inc. v. Busk, 2014). A group of former employees initially sued their contract company, Integrity Staffing Solutions, Inc., arguing that they were entitled to compensation under the Fair Labor Standards Act of 1938 (FLSA) for the twenty-five minutes they spent each day undergoing security screenings.

The Supreme Court ultimately sided with the contractor, basing their decision on a 1947 amendment to the FLSA, known as the Portal-to-Portal Act. The act classifiedpreliminary or postliminary duties as separate from the “principal activities” of a worker, and therefore not protected by the FLSA. The court found the screenings to be non-compensable because they were neither “integral nor indispensible” to the employees’ principle work. The issue with this case is not that the Supreme Court failed to uphold the law—its decision reflects both language and intention of the Act—but that the law itself was designed to deprive worker of their rightful wages. The security screenings may have been separate from the workers’ principal duties, but they constituted almost half an hour each day that workers spent performing a task for the sole benefit of their employer. This law is not alone. Backlash from President Franklin D. Roosevelt’s New Deal in the 1930s saw a number of laws passed to fortify employers’ already considerable power over low-wage employees.

A Question of Integrity

With a large and growing population of immigrants and other vulnerable groups, North Carolina sees some of the highest levels of exploitation of any state. According to the US Department of labor, North Carolina workers lost “at minimum $33 million to wage theft in the last five years. Fixing this problem should be a priority not only for low-wage workers, but for anyone living in North Carolina. If nothing else, it’s a question of integrity. Theft is illegal. The victims of wage theft are among the people most often marginalized by our society, but that does not mean they should not receive the protection of the law. This thievery is something we can no longer afford to ignore, not if we truly wish to be a state and nation that promise “justice for all.”


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