How companies rip off poor workers and get away with it

Already battered by long shifts and high infection rates, essential workers struggling through the pandemic face another hazard of hard times: employers who steal their wages.

When a recession hits, U.S. companies are more likely to stiff their lowest-wage workers. These businesses often pay less than the minimum wage, make employees work off the clock, or refuse to pay overtime rates. In the most egregious cases, bosses don’t pay their employees at all.

Companies that hire child care workers, gas station clerks, restaurant servers and security guards are among the businesses most likely to get caught cheating their employees, according to a Center for Public Integrity analysis of minimum wage and overtime violations from the U.S. Department of Labor. In 2019 alone, the agency cited about 8,500 employers — including major corporations — for taking about $287 million from workers.

Companies have little incentive to follow the law. The Labor Department’s Wage and Hour Division, which investigates federal wagetheft complaints, rarely penalizes repeat offenders, according to a review of data from the division.

The agency fined only about 1 in 4 repeat offenders from October 2005 to September 2020.. And it ordered those companies to pay workers cash damages — penalty money in addition to back wages — in just 14% of those cases. On top of that, the division often lets businesses avoid repaying their employees all the money they’re owed.

In all, the agency has let more than 16,000 employers get away with not paying $20.3 million in back wages since 2005, according to Public Integrity’s analysis.

“Some companies are doing a cost-benefit analysis and realize it’s cheaper to violate the law, even if you get caught,” said Jenn Round, a labor standards enforcement fellow at the Center for Innovation in Worker Organization at Rutgers University.

THE ASSOCIATED PRESS Ruth Palacios and Arturo Xelo, a married couple from Mexico, work at their fruit stand in the Corona neighborhood of the Queens borough of New York. They worked seven days a week for months disinfecting COVID-19patient rooms at the Memorial Sloan Kettering Cancer Center in New York City, but weren’t paid overtime, Palacios says.