Anti-Wage-Theft Laws Are Kryptonite to Dishonest Bosses
The results are in on Denver’s pioneering anti-wage-theft law, which has already helped thousands of workers recover millions of dollars in stolen wages. Cities across America should follow suit and stop thieving employers in their tracks.
A worker fulfills orders at a Walmart store on November 24, 2023. (Victor J. Blue / Bloomberg via Getty Images)
In January 2023, Denver passed a sweeping anti-wage-theft law to help workers reclaim stolen wages. In the fight to pass Resolution 22-1614, commonly known as the Civil Wage Theft Ordinance, local unions and labor advocacy groups squared off against the Denver Chamber of Commerce and business interests, who cynically claimed the bill’s “unintended consequences” would hurt workers as well as “minority- and women-owned businesses.” However, a recent report from the Labor Division of the Denver Auditor’s Office examining the impact of the Civil Wage Theft Ordinance disproves these claims and highlights the benefit of anti-wage-theft legislation to the working class.
According to Denver’s 2023 Annual Wage Theft Report, last year was the “most impactful in the Denver Labor Office’s history.” Between November 1, 2022, and October 21, 2023, the office helped over thirty-five hundred workers recoup $2 million in unpaid wages, an 85 percent increase from the year prior. What’s more, as this reporting period started before the Civil Wage Theft Ordinance was passed, it does not reflect the full potential of a full year’s worth of wage restitution.
The report attributes this success to four ways in which the Civil Wage Theft Ordinance empowered the Denver Labor Office:
- An expanded scope to investigate all forms of wage theft, such as violations of overtime, paid sick/safety leave, and rest breaks.
- The ability to proactively investigate high-risk employers, saving workers from having to file a complaint that could be met with retaliation.
- Increased penalties, enabling the office to pursue up to 300 percent of stolen wages from offending businesses.
- Additional funding for the Labor Office to hire experienced employees to handle these cases.
Armed with the authority and staffing necessary to help Denver-area workers recover their stolen wages, the Denver Labor Office sees its recent results as only the beginning. “The numbers speak for themselves,” Matthew Fritz-Mauer, executive director of the Denver Labor Office, told Jacobin. “In 2023, we helped about 1,500 more workers and collected almost $1 million more in restitution than in 2022. We understand that this is just a fraction of all the wage theft out there, so we’ll continue to hire, refine our practices, and make it clear that in Denver, workers’ rights matter.”
The Bigger Picture
Not only does this report show the benefit the Civil Wage Ordinance has brought to workers in the Mile High City, but it also offers strong evidence labor groups can use to bolster similar efforts in other states and cities, with the ultimate goal of achieving federal anti-wage-theft legislation.
The Economic Policy Institute estimates that employers steal up to $50 billion in wages from American workers every year, exceeding violent theft and auto robberies combined. When the Department of Labor (DOL) studied wage theft in New York and California, it discovered that stolen wages reduced affected families’ incomes by 37 to 49 percent. This theft pushed fifteen thousand families below the poverty line and another hundred thousand families deeper beneath it.
Unfortunately, the DOL only recouped $3.24 billion in workers’ wages between 2017 and 2022, a pitiful 1.62 percent of the estimated $200 billion stolen over those four years. While many factors contribute to this low restitution rate, the predominant one is that the DOL is restricted from pursuing wage theft under the inadequate avenues offered under the 1938 Fair Labor Standards Act (FLSA). The FLSA limits workers to recovering only the federal minimum wage ($7.25 an hour) as opposed to their contracted wage, does not require employers to provide accurate paystubs, and has low penalties for violating employers that do not discourage repeat offenses.
According to the DOL, federal wage theft penalties are so weak that over one-third of offending companies return to wage theft practices. Alternatively, companies hit with civil suites are much more likely to stop stealing wages, as are nearby employers, regardless of their industry. Denver’s Civil Wage Theft Ordinance allows workers to pursue civil suits against thieving employers, a provision other municipalities would be wise to replicate.
National lawmakers have recognized the wage theft problem and tried to remedy it, though their efforts have stalled. In 2019, Sen. Patty Murray (D-WA) introduced the Wage Theft Prevention and Wage Recovery Act, which identifies and addresses issues with federal enforcement. Murray’s act emphasizes the need for stricter penalties, calling the current remedies “hollow threats” that fail to deter businesses from stealing wages. Unfortunately, the bill has been dormant for half a decade.
While instituting a powerful anti-wage-theft bill at the federal level is the ultimate goal, the current state of national politics poses serious obstacles to its passage. In the meantime, leftist groups and labor unions can focus their efforts on state and local efforts like Denver’s. Approximately 88 percent of all jobs are located in metropolitan statistical areas, i.e., cities.
Not only would city-level laws help workers reclaim lost wages for large numbers of workers at a time, but they could also create a positive ripple effect. Unpaid wages are untaxed, meaning money that should go to local programs and Social Security remains tucked away in employers’ bank accounts. According to a study on wage theft in Washington between 2009 and 2013, wage theft cost the state upward of $64 million in untaxed revenue.
Delivering material gains to the working class is also crucial to building a base of support for pro-labor politics, which is necessary to achieve federal anti-wage-theft legislation. At a time when the American Left is called to urgently offer alternatives to the neoliberal politics of centrist Democrats while stopping workers from drifting towards reactionary Republicans, a national push to bring anti-wage-theft legislation to every city in America is a valiant, actionable, and constructive goal.