Treat wage theft as a criminal offense
Forget raising the minimum wage. How about enforcing the meager minimum already on the books?
Over the past year, low-wage workers and their supporters have protested, struck and polemicized for a raise of some kind, a proposition that has support from the White House and most Americans, if not Republican politicians. But low-wage workers face an even more upsetting affliction that both parties should feel comfortable condemning: Employers are stealing from their employees, often with impunity.
"Wage theft" is an old problem. It can take many forms, including paying less than the minimum hourly wage, working employees off the clock, not paying required overtime rates and shifting hours into the next pay period so that overtime isn't incurred. Unfortunately, reliable data on the magnitude of the problem are scarce. Workers can be afraid to report the theft for fear of losing their jobs altogether, especially in today's terrible economy, and many don't know their rights. Often workers don't even realize their pay is being skimmed.
Take Ashley Cathey, 25, a six-year McDonald's employee who participated in a national one-day strike last December. A couple of months later, she got a 25-cent raise, to $8 an hour from $7.75. But something about her next paycheck looked fishy: Her pay seemed short given her raise and new, longer hours. She usually works overnight, and in recent months her shifts have frequently stretched to 12 or 14 hours because her Memphis restaurant has been short-staffed. (Perhaps because its wages are still too low to retain enough employees.)
She asked a friend who is a manager to print out her time sheet and noticed that someone had clocked her out for breaks she never took. Other co-workers spotted hours shaved from their time sheets, too. When employees brought this to the attention of a more senior boss, they were told the wrongly subtracted hours would appear in their next paychecks. Meanwhile, the helpful manager who had printed out the time sheets was reprimanded for sharing official time records with workers and told that he'd be fired if he did it again, Cathey said. Now Cathey keeps a personal record of the hours she clocks in and out.
"I never paid attention before," she told me in a phone interview. She suspects that someone has been doctoring her hours for years, but she doesn't want to endanger her manager friend's job by asking for help obtaining proof. Even without proof she is convinced: "They're hiding something, obviously," she said.
This is not a one-off accusation. In the past few weeks, New York Attorney General Eric Schneiderman extracted settlements from dozens of McDonald's and Domino's locations around the state for off-the-clock work. Last month, workers in California, Michigan and New York filed class-action lawsuits against McDonald's alleging multiple charges of wage theft. These suits have upped the ante by implicating the McDonald's corporation, not just individual franchisees, in bad behavior. The plaintiffs allege that McDonald's corporate office exerts so much control over franchisees — including by monitoring their hourly labor costs through a corporate computer system — that it had to have known what was going on.
"It doesn't take a company dictating the specific method for violating the law in order to obtain those violations," Michael Rubin, an attorney with Altshuler Berzon LLP who filed the California suits, told me. "If you keep coming with this directive that labor costs must be lowered, there are only a finite number of ways that can be done, most of which are unlawful. The lawful ways get exhausted quickly." (McDonald's said in a statement that it is "undertaking a comprehensive investigation of the allegations.")
These cases aside, wage theft mostly goes unreported. Workers who do report the stolen wages to authorities — lately, at the urging of national labor campaigns such as Good Jobs Nation — can wait months before an investigation is resolved, even though they probably need the missing money to pay their next electricity bill. (This has been the case with fast-food workers employed by government contractors at the Ronald Reagan Building and International Trade Center, who filed a wage-theft complaint with the Labor Department last summer.) The consequences for wage theft are rare, small and not particularly deterring. Even when government investigators pursue these complaints, for example, criminal charges are rarely filed.
Harsher penalties, including prison time, should be on the table more often when willful wrongdoing is proved. Thieves caught stealing thousands of dollars from someone's home can go to jail; the same should be true for thieves caught stealing thousands of dollars from someone's paycheck.
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