Connecticut Sets Example with Wage Theft Law
Connecticut now holds employers accountable for wage pilfering under a new law. It requires companies to pay back to workers double the amount of wages wrongly withheld.
Employers engage in wage theft to cut costs: by not paying workers minimum wage, not paying time and a half for overtime hours and not submitting tax payments, such as the employer’s share of Social Security. Because wage theft can be hard to detect, businesses do it to make money at workers’ expense.
Connecticut’s governor last month signed a law that removes the burden of proof from workers in wage theft cases and puts it on employers, who must now demonstrate that they took particular consideration to pay workers correctly. Unless employers can prove that they truly made a genuine mistake in paying workers, they must compensate the employee with double the lost pay.
State laws like Connecticut’s raise the stakes for wage theft. They make the consequences of stealing from workers harsher and make it harder for companies to use payroll mistakes as an excuse for “lost” wages. This deters businesses from trying to make an easy buck by shortchanging workers.
In Dec. of 2014, the Department of Labor (DOL) released a study regarding minimum wage violations in New York and California. The study revealed an estimated 372,000 minimum wage violations take place in California weekly resulting in a projected $22.5 million of lost income for the victims.
For New York, the study estimated a total of 188,000 weekly minimum wage violations, meaning $10.2 million stolen from hard-working employees.
Campaigns are in progress in Iowa, Nebraska, Florida, and 12 other states to follow Connecticut’s example with legislation discouraging wage theft.
Ten states, including Arizona, Maryland, and Vermont, require companies to pay three times the amount of stolen wages to the victims.
Wage theft is less likely to occur to workers represented by unions. The negotiation of fair contracts with built-in mechanisms for enforcement deters employers from stealing members’ pay.
On the federal level, the 1938 Fair Labor Standards Act established minimum wage and “time and a half” payment for hours worked over 40 in a week. It is enforced by the U.S. Department of Labor, but the 2016 bill for Labor, Health and Human Services substantially cuts funding the Department of Labor, and without proper funding, the DOL will be unable to investigate the multitude of wage theft cases reported across the United States.
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