How to End Wage Theft—And Advance Immigrant Justice

Nine years ago, the Economic Policy Institute reported that over $50 billion a year is stolen from workers nationally—that’s more than the cost of all robberies, burglaries, and motor vehicle thefts combined. This theft occurs daily and disproportionately affects immigrant workers.

Wage theft among immigrant workers is enabled by a host of factors, including a lack of knowledge of wage-and-hour rules, worker vulnerability to exploitation, threats of retaliation and deportation, and poor access to legal services. Many immigrant workers who want to pursue wage-and-hour claims are forced to navigate language barriers, bureaucratic complaint processes, and poor enforcement by under-resourced state and federal labor agencies.

While wage theft is a longstanding challenge, an unofficial coalition of organizers, researchers, and investigative journalists are working to change this. Together, they aim to expose immigrant worker exploitation and the billions of dollars in wage theft that line the pockets of employers across the country.

What is Wage Theft?

Let’s start with some basics. Wage theft is not a legal term but rather a term used by advocates, attorneys, and policymakers when describing any action by employers that deprives a worker of receiving wages they are entitled to under the law. It’s an umbrella term that includes minimum wage and overtime violations but also illegal deductions, failing to honor sick leave and other benefits, and the all-too-common and often overt practice of simply failing to pay for work performed.

States like Florida, Ohio, and Illinois are committing the lion’s share of minimum-wage violations, while our home state of New York comes in as the fourth worst state in the nation. And wage theft profoundly impacts the economy. According to a 2014 study of wage theft in California and New York, wage theft doesn’t just hurt low-wage and immigrant workers, it also contributes to poverty, increases the need for SNAP (supplemental nutrition assistance program, formerly known as “food stamps), and increases the cost of public assistance services. It also decreases city and state tax revenue.

An Ongoing Policy Failure 

Since 2009, Congress has not increased the federal minimum wage (which remains stuck at $7.25 per hour), despite having an accrued inflation of around 40 percent. Congress has also failed to enact the Wage Theft Prevention and Wage Recovery Act, a comprehensive bill intended to hold unscrupulous employers accountable for unfairly withholding wages from their employees. 

Even when workers win wage theft cases, it’s difficult to collect on the judgment.

There is modestly better news at the state and local level. For example, some states such as New Jersey have passed laws that keep employers with a history of wage theft violations from obtaining government contracts or certain licenses. New Jersey has also created online reporting systems to allow workers to report wage theft anonymously or with limited personal information. These steps have streamlined the process of reporting wage theft, succeeded at holding employers accountable, and made it easier for workers to seek redress without fear of retaliation.

The last meaningful and widespread legislation around this issue in New York state was the Wage Theft Prevention Act of 2011. The act aimed to expand an employee’s ability to bring complaints against their employers, requires that businesses provide notice to their employees of their rate of pay, pay date, and basis of wage payment (whether paying by hour, shift, day, week, piece, etc), and improves language access by requiring employers to give notices in the employees’ primary language. The law also strengthened workers’ options for recourse when employers fail to comply with these provisions. 

But in the past decade the wage theft problem in New York has become more acute; it worsened further during the COVID pandemic. Existing measures to protect workers often come short. Even when workers win wage theft cases, it’s difficult to collect on the judgment when employers file for bankruptcy, dissolve their business, or hide behind a series of limited liability companies to frustrate collection. In 2016, before the pandemic, it was estimated that the State’s Department of Labor was able to collect less than three percent of the total wages stolen throughout New York.

A loose coalition of groups have formed to elevate and incubate solutions to address immigrant wage theft at the national and state levels.

In New York, new legislation designed to address these shortcomings has been put forward in the form of the Securing Wages Earned Against Theft Bill (or SWEAT). The SWEAT Bill would increase workers’ bargaining power (especially in the construction industry) by allowing them to put liens on an employers’ property for owed wages and hold shareholders of non-publicly traded corporations personally liable for wage theft.

Building a Sustainable Workplace Justice Coalition

In the absence of government action, a loose coalition of groups was formed to elevate and incubate solutions to address immigrant wage theft at the national and state levels. At the heart of these efforts in our state of New York are nonprofit worker centers like New Immigrant Community Empowerment, TakeRoot Justice, and El Centro del Inmigrante. These organizations offer multilingual “know your rights” training on immigration, labor, and employment; connect individuals to legal assistance; and provide essential infrastructure for immigrant and low wage workers who are not members of a union or who are wary of government.

In 2018, our organizations—Justicia Lab and Make the Road New York—collaborated to design an app for immigrant workers and their advocates to automate and simplify the wage theft filing process. The way ¡Reclamo! works is to ask a series of questions and, based on the responses the worker or advocate provides, calculate the amount owed (including legal penalties) while also generating complaint letters citing relevant New York statutes that can be sent to employers and/or filed with authorities. ¡Reclamo! also collects anonymized and aggregated data that can be analyzed by worker advocates to inform larger claims, strategic enforcement solutions, and legislative reforms and organizing—including broad worker-led local and state policy campaigns.

¡Reclamo! is simple enough that a worker can use it on their own. It’s designed to be used by non-attorneys to organize community efforts around recovering the stolen wages, which is a model that workers’ centers and worker advocates have used for decades to compensate for the systemic failure of local and state agencies to enforce labor laws.

A Holistic Approach to Addressing Wage Theft

To radically reduce wage theft requires a holistic and integrated approach. Advocates are working to raise visibility, put pressure on policymakers and government agencies, and influence change at the local and state level. Key efforts include:

Delivering culturally sensitive worker education: Many immigrant workers, especially those who are undocumented, don’t know their labor rights. This is further exacerbated by limited access to this information in their primary language. Under the federal Fair Labor Standards Act and parallel state legislation, non-citizens are entitled as citizens are to earn minimum wages, receive overtime pay after 40 hours, be protected from retaliation, and enjoy meal breaks. To help immigrants know how to enforce these rights, workshops to teach workers in their own language their rights and combat misinformation are critical. 

Expanding who can identify and file wage theft claims: Non-lawyer advocates—such as community organizers, social workers, librarians, and others—can identify wage theft and support workers in filing labor claims. This is why tools like ¡Reclamo! are pivotal in empowering advocates to help workers address labor violations. This community-based model has its roots in the legacy of community lawyering and international efforts to train community leaders and paralegals to help impacted individuals address justice problems.

Fixing the data record: Unfortunately, it’s difficult to quantify the extent of wage theft because lax state enforcement means most offenses are not part of the public record.  Hopefully, as tools like ¡Reclamo! make the full scope of wage theft clearer, we aim to generate a more accurate picture of wage theft’s reach.

Uplifting worker stories and shaming bad actors: Workers’ stories are often underreported. This allows government and industry leaders to ignore wage theft and its devastating effects on individuals—and its broader effects on the local, state, and federal economies. News outlets that investigate the causes of the wage theft crisis and feature the vulnerable individuals whose lives are most directly impacted are crucial. 

Media outlets like DocumentedNY—a New York-based newsroom dedicated to ‘breaking the cycle of extractive immigration reporting—have dedicated ongoing coverage to looking at wage theft in New York City’s restaurant sector, exposing chronically exploitative employers from design firms, contractors commissioned by the New York City Housing Authority (NYCHA), and immigrant workers in laundry and cleaning industries who have been organizing against employer retaliation. 

While there has been some national media coverage of wage theft in recent years, the wage theft problem remains largely unknown to most Americans and is primarily being written about by local and independent newsrooms.

Strengthening public enforcement: Because even the most innovative and progressive worker protection laws will be ineffective if implementation is overlooked, academics like Jenn Round from Rutgers University’s Workplace Justice Lab, are working to strengthen labor standards enforcement. Through the Beyond the Bill initiative, Round and her colleagues are working across the United States with local, state and federal agencies along with worker centers, unions, and legal nonprofits to reimagine the way that public enforcement is done. The Workplace Justice Lab facilitates space for advocates and practitioners to learn from one another about successes, challenges, and best practices for enforcing labor laws.

Passing comprehensive immigration reform: A major driver of wage theft is our failed immigration system, which leaves millions of workers outside of the formal economy. The most effective way to combat wage theft of immigrant workers is to incorporate these workers who provide critical services to support our economy to be fully participating members of our society. Until Congress acts, initiatives like the Deferred Action for Labor Enforcement (DALE)—which grants Deferred Action to workers that participate in labor investigations—is a step in the right direction. DALE is a result of local and national organizing efforts by groups like the National Day Laborer Organizing Network (NDLON) and the National Immigration Law Center (NILC).

What’s Next?

While important work has been seeded in the last few years, wage theft is still endemic. The good news is that little by little, advocates’ efforts are building strength and power—taking on a fight for just pay and decent working conditions that our country has ignored for too long.

Longer term, we must build collective power among workers and bring more non-attorney worker advocates into the fold. We also need to strengthen federal and state enforcement and protections; and connect a network of state-wide advocates seeking to address wage theft at scale through data analysis, policy advocacy, and grassroots organizing.