Fallout: The Financial Crisis

Wage theft victims fight for rights

Dan Grech May 18, 2009
Fallout: The Financial Crisis

Wage theft victims fight for rights

Dan Grech May 18, 2009


Kai Ryssdal: Everybody tries to save money in a recession. That’s kind of a given. It’s one thing, though, if consumers cut back on their weekly expenses. It’s entirely another when employers intentionally shortchange their workers. That’s known as wage theft. And it’s on the rise. From the Americas Desk at WLRN in Miami, Marketplace’s Dan Grech reports.

DAN GRECH: Housekeeper Silvia Cubides worked long days cleaning some of Miami’s toniest hotels: the Mandarin Oriental, the Intercontinental, the Four Seasons. She says her employer, Niagara Cleaning Services, had a policy against paying time-and-a-half for overtime. Such a policy would violate federal wage and hour laws. But Cubides says she learned that only after nearly two years of work.

SILVIA CUBIDES: I felt exploited. In every aspect. They mistreated all us, verbally and in our paychecks. I would work 90 hours, and they would pay me for 60 or 70. If you brought it up, they got angry.

Wage theft can mean shaved hours, withheld tips or pay below the minimum wage. It’s estimated to cost American workers $10 billion a year in lost wages. Attorney Jennifer Hill is with the Florida Immigrant Advocacy Center. She says wage theft can be found across industries and income classes. But it’s often most egregious in low-wage work, such as construction, food service and farming.

JENNIFER HILL: It’s a business model. It’s a business model of taking advantage of vulnerable people who don’t necessarily know their rights, don’t necessarily have a lot of options, and even if they’re confronted with the problem, they don’t know how to solve it.

The Department of Labor is supposed to punish employers who violate federal wage and hour laws. But a recent audit by the Government Accountability Office found the department ineffective. GAO official Gregory Kutz says complaints made to the Labor Department weren’t followed up.

GREGORY KUTZ: We made over 100 calls, and in many cases the calls weren’t returned, they went right to voice mail. And really only one of the 10 undercover calls we made we believe was properly investigated.

In this undercover call, a fictitious complainant says his employer refuses to pay him, and he asks for the Labor Department’s help.

EMPLOYEE: So you really have no power to do anything? All you did was call and ask her to pay me.

DEPARTMENT OF LABOR: I explained the law to her. She knows that she needs to pay you. She just says she doesn’t have the money to. I can’t wring blood from a stone.

The new Secretary of Labor, Hilda Solis, has promised a crackdown on wage theft. Shelby Hallmark is an acting assistant secretary in the Department of Labor.

SHELBY HALLMARK: This administration wants to make sure that there will be an emphasis on finding those violations and doing something about them.

Secretary Solis says she’s hiring nearly 500 new investigators and support workers, increasing the staff by more than a third. Kim Bobo heads Interfaith Worker Justice and is author of “Wage Theft in America.”

KIM BOBO: The problem is, she’s facing the wild wild West of wage theft. There are employers that have been allowed to run amok for a decade and perhaps longer. And she’s got a mess to clean up.

Bobo says undocumented immigrants are the most vulnerable, because they’re the least likely to speak up when an employer rips them off. Silvia Cubides, the housekeeper who complained of not being paid overtime, is undocumented. But she went ahead with a lawsuit against Niagara Cleaning Services, claiming $10,000 in back pay.

CUBIDES: I feel I am a warrior. I am not afraid. I fight for my ideals and to help others. When I start something, I take the fight to the end.

Niagara Cleaning Services’ lawyer, Michael Pancier, declined to be interviewed on air. Pancier said the company has payroll records that show it routinely pays OT. Still, he says it’s often cheaper to settle than to fight in court. Niagara agreed to pay Cubides what she said the company owed. Since her lawsuit, six other Niagara workers followed with a case of their own.

In Miami, I’m Dan Grech for Marketplace.

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