States, cities turn to community organizations to combat wage theft • Georgia Recorder

About five years ago, most Subway, Little Caesars and McDonald's franchise restaurants in Minneapolis did not meet city wage standards. Now workers at all sites that violated the law will receive the required minimum wage and vacation when they are sick.

It's all thanks to a co-enforcement program in which the city's Occupational Safety and Health Administration works with community organizations to ensure workers are aware of their rights and have the tools to advocate for themselves. Last year, it reached more than 12,000 workers and provided labor rights training to more than 400 people. Since the program began in 2018, more than $3 million in back wages have been recovered.

“Since we started, we have received a disproportionate number of complaints or reports of violations from restaurant employees on a fairly regular basis,” said Brian Walsh, director of labor standards and contract compliance at the Minneapolis Department of Civil Rights, noting that the restaurant industry has historically Seen, the majority of workers earned the minimum wage or just above it. “… It’s kind of at the front lines where some of these municipal labor standards, if you will, are coming to the streets.”

Wage theft, which can include failing to pay the minimum wage, misclassifying workers as independent contractors or management to avoid overtime pay, and accepting tips for workers, is a $50 billion problem for U.S. workers. Perpetrated by large corporations, small businesses and even state governments, it disproportionately affects low-income workers, including women and workers of color.

Funding from the American Rescue Plan Act, the federal government's response to the economic and health impacts of the COVID-19 pandemic, allowed more states and cities to experiment with using community groups to engage with workers, like it Minneapolis did, according to a report from the American Rescue Plan Act Economic Policy Institute and Center for Labor and a Just Economy at Harvard Law School. When workplace safety agencies, which the average worker may not know about, work more closely with community organizations that engage with these workers, workers achieve better outcomes, experts say.

Now that most ARPA funding has been approved, some policy advocates are pushing for states to continue this work by letting employers, not the public, bear the costs of enforcement and for the U.S. Department of Labor to support it through grants. among other financing options.

“If there are workers on a construction site who the employer knows know their rights and are willing to stand up for themselves, the employer is less likely to intentionally try to do things to steal wages, so a kind of prevention then occurs. said Veronica Mendez Moore, co-director of Centro de Trabajadores Unidos en Lucha (CTUL), a worker-led organization in Minneapolis focused on racial, gender and economic justice. “We have seen in several cases that as soon as employees speak out for one thing, the employer shys away from the other.”

Walsh meets regularly with Mendez Moore's group, as well as New Justice Project MN, a Black-led organizing center focused on economic issues, and ROC Minnesota, a nonprofit organization that advocates for labor law, to discuss new developments. for example, the emerging trends in wage theft.

He said a closer relationship with these groups has helped strengthen enforcement.

“[There are] About 300,000 employees across the city and then three investigators,” he said. “It’s a really difficult, almost impossible task to be there all the time, everywhere.”

Walsh said the total amount of ARPA funding allocated to the program is $750,000.

ARPA funds to the rescue

[Act] “Funds provided further opportunities for this experiment,” said Rachel Deutsch, campaign director at the California Coalition for Worker Power and one of the co-authors of the EPI/Harvard report. “Now the question is, 'Are we just going to abandon this infrastructure because we're going to act like COVID is over, or are we going to build on it to create mechanisms that are really needed, regardless of whether we're in.' in an emergency response or not?' Moment to inform low-income earners of their rights and employers of their responsibilities? ”

The report highlighted efforts in several cities and states.

According to the EPI report, in 2021, Maine launched a program with $1 million in ARPA funding for job training, assistance accessing unemployment benefits and workforce assistance with support from community organizations, the AFL-CIO and a legal aid group. In Seattle, staff from the city's Office of Labor Standards meet with community-based organizations on a monthly and quarterly basis. Chicago, Philadelphia and San Francisco also have strong partnerships with community organizations, as do San Diego and Santa Clara counties in California.

In Iowa, the cities of Coralville, North Liberty, and Iowa City and Johnson County provided $322,000 in ARPA funding over five years to the Eastern Iowa Center for Worker Justice, which investigates wage theft cases helps put collective pressure on employers to pay wages to their employees and has helped workers regain lost wages.

The help is needed because Iowa Workforce Development does not have enough staff. Jesse Dougherty, the agency's marketing and communications officer, told States Newsroom in an email that the Workforce Development Division has four positions to investigate unpaid wages. Two of those positions were partially vacant last year, Dougherty said. In total, around 15 to 20 people regularly deal with pay or misclassification issues.

Mazahir Salih, who was until recently executive director of the Center for Worker Justice of Eastern Iowa, told States Newsroom that workers don't always know how to file a complaint or that there is a workplace safety agency to file it with . They came to CWJ through word of mouth, she said. On this particular day, she coordinated with organizers of a protest aimed at reclaiming the wages of a former worker at a local Mexican restaurant. He only learned that his employer couldn't cover his paychecks after he tried to deposit them into his bank.

Sometimes CWJ can resolve the matter with the employer over the phone, but if that fails, the group sends a letter and from there community pressure can be increased, including protests and a delegation of elected officials.

“If it really is a miscommunication, we can find out on this phone call,” Salih said. “But some of them either don’t want to talk to us on the phone or don’t want to give us information.”

Deutsch said she would like to see more states in the South and Southwest adopt these approaches to enforce workplace safety and prevent labor violations. She said that in the past, these programs began in cities with their own wage standards. One obstacle could be preemption laws, which have been used by state governments to prevent cities from raising wages and protections for workers above the federal minimum wage. Many of the minimum wage exemption laws are concentrated in southern states.

Community-based organizations also need the appropriate financial support to devote time and resources to working with occupational safety authorities. According to the report, funding problems could be solved by providing revenue streams for labor standards enforcement and by employers bearing the costs through the penalties they pay for labor law violations. Deutsch said that if philanthropic funding supports a pilot program and that program is successful, that can make the case for more public funding of these partnerships. She added that she is confident that the Ministry of Labor will also use its funding powers to support these models.

“As a society, we actually systematically underfund the authorities that are supposed to enforce our labor laws,” Deutsch said. “You hear about the recent fears of shoplifting or whatever, and wage theft has always eclipsed retail store break-ins and all of those things. It is a crisis and we are simply not funding it as such.”

The scope of the problem

The Fair Labor Standards Act requires workers to be paid at least the federal minimum wage and overtime for all hours worked over 40 hours, but it is a law that is often ignored. Last year, the Department of Labor's Wage and Hour Division recovered workers' wages in 13,122 labor violation cases in high-violation, low-wage industries. The industries in which the most workers were affected were restaurants, construction and retail.

According to a 2017 study, low-wage workers in the ten most populous states in the U.S. reported being paid less than the minimum wage, meaning they lost $8 billion a year, while a National Employment Law Project reported in 2019 Losses of $9.27 billion were stolen from workers making less than $13 an hour.

Recently, a January report from the National Bureau of Economic Research found that companies routinely deny overtime pay to their workers by labeling them managers, even though the majority of their work is non-managerial in nature.

The companies they highlighted included restaurant chains Bojangles, Sonic, Arby's and Domino's, as well as companies like H&R Block, Spirit Halloween and 84Lumber. The report prompted Democratic U.S. Senators Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts to send a letter to the companies named in the report asking them to answer questions about their overtime practices, the Washington Post reported.