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A STUDY of WAGE THEFT and STATE WAGE ENFORCEMENT LAWS a PRACTICUM REPORT by Robert L. Olson Submitted in Partial Fulfillment Of

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A STUDY of WAGE THEFT and STATE WAGE ENFORCEMENT LAWS a PRACTICUM REPORT by Robert L. Olson Submitted in Partial Fulfillment Of A STUDY OF WAGE THEFT AND STATE WAGE ENFORCEMENT LAWS A PRACTICUM REPORT by Robert L. Olson Submitted in partial fulfillment of the requirement for the degree of Master of Arts in Labor and Policy Studies Empire State College State University of New York 2012 First reader: Second reader: 1 Contents Abstract 4 Chapter One What is Progressive States Nework? 6 How my practicum with Progressive States Network came about 6 Chapter Two My experience at Progressive States Network 9 Chapter Three What is wage theft? 15 Aspects of wage theft 18 Failure to pay any wages whatsoever 18 Failure to pay for all time worked 19 Paying with checks that “bounce 20 Failure to pay overtime 22 Failure to pay minimum wage 24 Misclassification of private contractors 25 2 Paying by the day or the job 26 Making workers pay for a job 27 Taking illegal deductions from worker’s paychecks 26 Stealing workers tips 29 Not being paid final paycheck 30 Not be paid prevailing wage 30 Why is wage theft so prevalent? 32 Chapter Four Conclusion 34 My views on the potential success of PSN’s unigue strategy 34 Interpreting the data collected from the states which responded to PSN during the time of my practicum 38 Appendix Results of the Survey 42 States which did not participate in the survey 87 Websites for Labor Standards Enforcement Agencies 89 Bibliography 91 3 Abstract This is a report of a practicum with the Progressive States Network (PSN) which occurred from to January 3, 2011 to March 2, 2011. At the time of this practicum, The Progressive States Network was located at 101 Avenue of the Americas, New York City, NY. During this practicum, I requested information from all fifty states regarding wage enforcement law. I then compiled information from the states which replied during the period of my practicum. The main things I learned from this practicum was the nature and types of wage theft, the variety and range of state wage and hours laws by the individual states of the union and that PSN is extremely active and unique in advocating for legislation to combat wage theft. Wage theft takes a variety of forms including outright refusal to pay any wages for work performed, failure to pay any wages whatsoever, failure to pay for all time worked, paying with checks that “bounce, failure to pay overtime, failure to pay minimum wage, misclassification of private contractors, paying by the day or the job (instead of cumulatively), making workers pay for a job, taking illegal deductions from worker’s paychecks, stealing workers tips, not paying final paycheck and not paying prevailing wage. State legislation to combat wage theft come in the form of specifically defining employers, employees and independent contractors, recourse for employees who have been misclassified as independent contractors, defining liquidated damages and the ability of an aggrieved employee to collect it, requiring employers to notify the employee at the time of hiring of the wages and paydays, to notify employees if either wages or paydays change, requiring employers to provide written statements of employment agreements and policies upon employee request, requiring employers to keep payroll records, requiring employers to provide workers with a statement of 4 hours worked, wages earned, and deductions for each payday, requiring an employer to pay beyond wages or expenses that were not paid if a wage violation occurs (i.e. liquidated damages, attorney’s fees, etc), allowing an individual bring a civil action for damages against the employer if an individual is not properly classified as an employee, providing the state agency responsible for labor issues the authority to inspect employer property pursuant to an investigation of wage violations and to protect the anonymity of the employee, protecting employees (or those who assist them) from retaliation by employers against whom they have taken action, filed a complaint, or contacted the agency for wage violations, providing for civil penalties for employers for each violation, the state having a provision holding shareholders liable for debts owed to the employees of a corporation in case of a bankruptcy and the ability of an employee to bring a civil action against shareholders and providing an aggrieved employee and/or independent contractor with the means file a civil action. 5 Chapter One What is Progressive States Network? The following description of Progressive States Network is taken from “2012 Blueprint for Economic Security”, one of their many publications: Progressive States Network is a national, non-partisan, non-profit organization dedicated to supporting the work of progressive state legislators around the country and to the advancement of state policies that deliver on issues that matter to working families: strong wage standards and workplace freedom, balancing work and family responsibilities, health care for all, smart growth and clean energy, tax and budget reform, clean and fair elections, and technology investments to bridge the digital divide. Founded in 2005, Progressive States Network works to transform the national political landscape at the state level by networking state legislators, advocates, and other groups across the 50 states. By providing online and offline opportunities for legislator-to- legislator conversation, PSN’s dedicated policy specialists — who focus on health care, immigration, tax and budget policy, workers’ rights, broadband, green jobs, and election reform — connect progressive state legislators, advocates, and activists with the latest policy options, messaging resources, and news and analysis in their issue areas and states.1 How my practicum with Progressive States Network came about I first became interested in wage theft as a Final Project after reading Wage Theft in America,2 a book about the subject by Kimberly Bobo. I happened upon the e-book version in the Empire State College internet library looking for a topic for my Final Project. Since I am a person who seems to learn more from practical “hands on” experience, I decided that a practicum was the best option for me. The problem seemed to be landing one. Ultimately, what started as an application for a paid position resulted in an unpaid practicum. I had responded to a job listing for a position with the 1 “2012 Blueprint for Economic Security.” Progressive States Network .http://www.progressivestates.org/sync/pdfs/PSN%202012%20Blueprint.pdf (accessed January 01, 2012). 2 Kimberly Bobo, Wage Theft in America. (New York: The New Press, 2009). 6 Progressive States Network as Workers’ Rights Outreach Associate. In the cover letter to Progressive States Network, I mentioned that I was interested in doing an unpaid practicum. Months later, I received a reply from Tim Judson, Workers Rights Policy Specialist at Progressive States Network informing me that the paid position was no longer available. However, Judson informed me that they currently had a project pertaining to determining and comparing wage enforcement laws of all fifty states. I believe the fact that my proposal for a practicum entailed no financial remuneration just may have attracted Judson’s attention. Judson sent me the following e-mail: Mr. Olson, Thank you for your application. I apologize for the long delay in responding. We have postponed our search for a Workers’ Rights Outreach Associate, but are still searching for an intern to focus on research projects for our Workers’ Rights Program. The projects would consist of completing a survey of states’ wage-and-hour law enforcement statutes and assisting in the development of a report rating/evaluating states on the status of workers’ rights within their borders. Both of these projects can also involve a significant amount of work with other labor and policy groups around the country. Please let me know if you are still interested. Best, Tim Tim Judson Workers' Rights Policy Specialist www.progressivestates.org I agreed to interview for the position. I believe Judson and other representatives of Progressive States Network did a really great job of containing their amazement when meeting me in person and realizing that I was not your typical “twenty” something graduate student. Luckily, I applied during the normal school year when very few students apply for internships and my specific interest in wage theft happened to perfectly fit the PSN project. Normally, Progressive States Network has far more applicants for unpaid internships from the most 7 prestigious schools in New York City than it can handle. However, the bulk of those internships occur during the summer. Judson decided to take a chance with me and I remain eternally grateful to him for that. The practicum was fun in more ways than one. The other policy specialists at Progress States Network represent some of the brightest minds in the progressive movement. They are certainly idealistic and committed. Their political and social philosophies mesh extremely well with a nonprofit policy “think tank” calling itself the Progressive States Network. I can honestly say that about the only policy issue that those who make up Progressive States Network (PSN) and I may have agreed upon entirely was that of wage theft. After all, stealing is stealing no matter what your religious or ideological views. The admonition against outright theft is fairly universal in much the same way that no one thinks being convicted for something one did not do is okay (especially if we are or someone we love are the ones falsely convicted). While I was able to do a significant portion of the work of PSN’s project, I was unable to fulfill all of the work for the project by myself. Therefore, I will address the results I personally obtained in my Final Project. I must advise that the data cited in this report reflects what I obtained during the time of my practicum.
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