Eric T. Schneiderman: Honoring Labor Day By Rooting Out Wage Theft

Eric T. Schneiderman: Honoring Labor Day By Rooting Out Wage Theft:
Imagine a restaurant dishwasher who is robbed on payday while riding the bus home. A pickpocket steals all of his wages, leaving him with nothing to show for a week of hard work. If the thief were caught, he or she would be arrested and would surely face criminal charges.

Now imagine that same dishwasher, also deprived of his week of wages, except there is a different culprit: his boss. After six long days in a hot restaurant kitchen the boss refuses to pay him because "business is bad" or this was a "try-out week" or because two dishes broke, or for no apparent reason at all. If this culprit were caught, typically he would face only civil charges. He would have to pay the wages owed, and maybe a small penalty as well.

Because civil penalties for wage theft are paltry, employers often treat them as simply a cost of doing business. A 2010 study by the National Employment Law Project found that 21 percent of surveyed low-wage workers in New York City were paid less than the lawful minimum wage, and 77 percent of those who worked over 40 hours per week did not receive legally required overtime pay.

Lawmakers and prosecutors must reverse this trend by treating wage theft as what it is -- theft, and pursuing criminal charges accordingly.

Criminal convictions mean more accountability. And, these employers will have to note the conviction on applications for government aid and licensing forms. Simply put, criminal penalties are a serious deterrent to wage theft; small fines are not.

Some states do treat wage theft as a serious offense. In New York, failure to pay proper wages is a misdemeanor; we also criminalize retaliation against employees for reporting violations. Other states have followed New York's lead. In May of last year, Texas Governor Rick Perry signed into law the "Wage Theft Bill," which strengthened the state's theft of services statute in relation to nonpayment of wages. It's a felony in Texas to steal services worth more than $1500.

Even where there are no laws directly criminalizing wage theft, prosecutors can use other statutes to target unscrupulous employers, because these firms often violate a host of laws. After all, how likely is it that a construction company using underpaid day labor will be diligent about paying taxes or following building codes? Or that a food processing company with workplace safety and health violations will be meticulous about food safety for the public?

Lawless employers harm not only workers; they endanger the public, deprive schools, parks, and police of needed funds, and undermine honest employers who can't compete with bottom feeders.

Just this year, my office has arrested employers in a range of industries: a car wash operator, the founder of a tortilla factory, a restaurant owner, a construction firm performing public work. Many have pled guilty to a range of charges including false filings, theft of services, falsification of business records, and schemes to defraud. Some of them will be going to jail.

To be sure, not all labor law violations should be treated as criminal cases. Some infractions are inadvertent or minor. But criminal charges are appropriate for employers who stiff their workers altogether or who pay far below the minimum wage; for those who file false tax documents or otherwise commit fraud; for repeat violators who refuse to follow the law, or wrongdoers who obstruct justice by firing employees who testify about violations.

In this time of deep political divisions, there should be nothing controversial about the notion that working people who do their jobs should be paid for their work.

An employer who knowingly violates labor laws is not an upstanding businessman saving a few bucks. In the end, he is hardly any different from the pickpocket, and the law should treat him as such.

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