Foon Rhee

How millions of minimum wage workers are getting stiffed

California senators celebrate historic minimum wage vote

All 26 Democrats in the Senate voted in favor of Senate Bill 3, which raises the California minimum wage to $15 an hour by 2022.
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All 26 Democrats in the Senate voted in favor of Senate Bill 3, which raises the California minimum wage to $15 an hour by 2022.

If you’re working for low pay, you’re already struggling to get by.

Now imagine how upset you would be if you’re not even getting the minimum wage that’s legally yours.

That’s the plight of 2.4 million workers in the 10 most populous states, who are losing a total of $8 billion a year in wages, according to a new study.

About 17 percent of low-wage workers are hit, and they’re losing an average of $3,300 a year, nearly one-fourth of their wages. Young workers, women, immigrants and minorities are more likely to be wage theft victims, the study says.

In California, about 590,000 workers are shortchanged, about 19 percent of eligible low-wage workers, and they lose about $3,400 a year, according to the study.

This is bad for everyone, the Economic Policy Institute says.

Wage theft puts families into poverty and forces more to seek public assistance, raising the bill for taxpayers. It lowers wages and weakens bargaining power for other workers in the same job or industry. It’s preventing Americans from raising their standard of living and moving into the middle class.

And it’s frustrating after all the energy and political capital spent to raise the minimum wage, including the Fight for $15 movement. California’s increased to $10.50 an hour at the start of this year and will eventually rise to $15 in 2022. California’s law covers nearly all workers, while in the 10 states in the study, about 88 percent are covered by a state or federal minimum wage.

The Economic Policy Institute used census data to compute violations of minimum wage laws, and focused on the 10 biggest states, which includes more than half the U.S. workforce. And this is only one form of wage theft. Others include failing to pay overtime, making employees work off the clock, denying meal breaks, taking wrongful deductions from paychecks, confiscating tips and misclassifying employees as independent contractors. The advocacy group says that states should strengthen legal protections, increase enforcement and raise penalties for violations.

In California, a state law that took effect in 2012 makes it a crime to willfully not pay wages after a court judgment or administrative order and requires restitution to employees for failing to pay minimum wages. But the UCLA Labor Center says the strong laws aren’t always enforced. Reviewing data from 2008 to 2011, the center found most companies ruled against by the state labor commission or courts never paid back any wages.

You can’t blame companies and businesses for trying to run as lean as possible and cutting costs wherever they can. But they should be paying workers what they’re owed, those on minimum wage most of all.

By the numbers

The number of workers shortchanged by minimum wage law violations and their average annual loss in the 10 biggest states:

State

Workers

Lost wages

Calif.

590,000

$3,400

Florida

404,000

$2,800

Georgia

82,000

$3,700

Illinois

243,000

$2,800

Mich.

130,000

$3,300

New York

300,000

$3,200

N.C.

84,000

$3,800

Ohio

217,000

$2,800

Penn.

107,000

$4,200

Texas

265,000

$4,400

Source: Economic Policy Institute

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