Higher wages, great! But how to enforce?
LOS ANGELES – There’s a certain euphoria among minimum-wage workers these days, as local and state governments across the country, most recently in New York, approve plans to substantially raise their pay.
But even as they celebrate their political wins, there’s a persistent whisper of worry among those pushing for higher wages: Will the promise of better pay actually become a reality?
Sensing the possibility of a hollow victory, labor advocates have begun to make wage enforcement a central part of their campaign: no longer just “raise the wage” but “raise and enforce the wage.”
The question of enforcement is particularly important given that the increases are coming primarily at the local level, which means that a business could be required to pay substantially more than its counterpart a few blocks away. The issue is particularly vexing in Los Angeles, where the minimum wage will reach $15 in 2020, amounting to a raise for more than 40 percent of the city’s workforce. In a sprawling metropolitan area with dozens of cities bordering one another, there could easily be a patchwork of wage laws that would make it difficult to know who should be paid what.
With a vast underground economy where workers are routinely paid in cash, Southern California has long been considered an epicenter of wage theft. Many of the low-wage workers are immigrants, documented and not, who speak little to no English. Without a forceful push to tell the city’s seamstresses, dishwashers, car washers and health aides what the minimum wage is, advocates say, many will not even know what they deserve, making it easy for employers to pay less.
Already, underpayment is an issue. More than one-quarter of all lowwage workers in Los Angeles, Chicago and New York City had been paid less than the legal minimum wage in the week before they were surveyed for a 2009 study by researchers at the University of California, Los Angeles, and University of Illinois, Chicago. For decades, enforcement has relied on complaints from employees, either in the form of a lawsuit or a formal complaint to state and federal authorities.
In California, there is a claim about wage theft filed every 4 minutes, according to Julie Su, the state’s labor commissioner. In 2012, the state’s Department of Industrial Relations, which is charged with enforcing the state’s $9-an-hour minimum wage, assessed more than $3 million in unpaid minimum wage earnings, a record high. But the state can hardly keep up with the task. There are just a handful of investigators in Los Angeles. And even when the state rules that an employer violated minimum-wage laws, employees often don’t receive the money: A report from the National Employment Law Project found that only 17 percent of workers who prevailed in wage-claim violations actually collected any back pay.
“There’s no reason to think that an increase means that all of the sudden there is going to be more employer compliance,” said Janice Fine, a professor at Rutgers University who has studied the low-wage workforce and local enforcement programs across the country.
Though the federal Labor Department is in what Fine calls a “kind of renaissance and rejuvenation” in its more aggressive approach to employers – in 2012, the department recovered $280 million in back pay for 308,000 workers – it has merely 1,100 investigators to monitor roughly 7 million employers. Calling the task Sisyphean would be an understatement.
“It’s just true that we will never have enough inspectors to be everywhere,” Fine said. “To make any of these policies more than aspirational, we have to be thinking about new enforcement strategies.”
And cities’ enforcement plans vary as widely as the wages. In Portland, Maine, where the minimum wage will rise to $10.10 an hour next year, there are so far no clear guidelines for the city’s role in enforcement. When the first phase of Seattle’s wage increase began in April, labor union officials and other activists blanketed the city with fliers telling workers to expect a raise.
Indeed, Fine said, cities will have to rely on a network of local agencies and community groups to make sure workers get what they deserve. Like other labor advocates and researchers, Fine sees the most promise in the approach planned in San Francisco, where the wage will increase to $15 by 2018. More than two dozen investigators will work with community organizations that routinely serve low-wage workers.
Researchers from the University of California, Berkeley, who helped persuade the Los Angeles City Council to pass a wage increase also suggested that the city would need to hire 25 investigators for its Wage Enforcement Division to match San Francisco’s efforts.
So far, city officials in Los Angeles have appeared reluctant to create a large new agency, instead relying on a handful of investigators and a large web of community-based organizations. In a memo to the council, city staff members recommended that the local enforcement agency eventually grow to more than three dozen positions with a budget of more than $2 million. Then, the city would be able to not only rely on complaints from employees, but also target audits at “industry sectors or employers with high rates of noncompliance.”
“We’ve had an existing wage theft crisis for a while, and if we don’t address that the increase is just an empty promise and unfulfilled dream,” said Victor Narro, the project director of the UCLA Labor Center. “We have been pressing for this for years and we are starting to get somewhere, but this is only the beginning.”
Earlier this month, the California state Senate passed legislation that will give state officials more power to collect back pay, in part by forcing employers to put up a bond to pay the employee the wages he’s owed.
Employers tend to comply with ordinances either because they believe it is the right thing to do or because they fear getting caught doing wrong. But for many employers, particularly in cities with large pools of low-wage workers, Fine said, there is a more complicated equation. If other businesses are cheating, employers believe that they cannot keep up if they pay the legal wage, and employees believe that they will not find a better job. And both groups may be right.
The question of whether the minimum wage should be left to local governments seems to have already been answered. Now the question becomes: Having raised the expectations, can they fulfill them?