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Wage and Hour Violations Identified as Wage Theft “Crime Wave” in Fast-Food Industry

wage hour violationLast month, a group of low-wage workers spoke at a New York City Council hearing, sharing their views on economic injustice throughout the fast food industry.  Council members are joining other public officials in a growing trend of scrutinizing what labor advocates and employment attorneys say is an extensive, nation-wide phenomenon of wage-theft. In the past 12 months alone, states like New Mexico, Texas and Virginia and have gotten tough on wage theft by new legislation. Oregon was the latest state to pass a bill that would curb wage theft in the construction industry.

A comprehensive 2009 report on wage theft indicated that 26% of low-wage workers surveyed across three cities (more than 4,000 surveyed) said they got less than minimum wage. Meanwhile, 75% of those who worked more over 40 hours per week reported that they didn’t receive overtime pay.

According to a number of reputable studies, employers steal labor from their workers in a number of ways: They can deny then legally required overtime pay rates of time-and-a-half for work over 40 hours; they can take illegal deductions out of employee paychecks for meals and uniforms; some coerce workers to do smaller tasks like emptying the garbage or putting items away boxes before they clock in or after they clock out; and finally, some refuse to reimburse delivery workers when they get mugged on the job.

As of 2011, New York already had one of the nation’s staunchest anti-wage-theft laws, and the attorney general is in the midst of a further investigation into those practices. Yet workers and their employment law attorneys claim that the problem remains legion.

A recent report by Fast Food Forward, consortium of labor groups pushing for better pay and working conditions among New York’s fast-food employees, showed that a whopping 84% had experienced at least one type of wage theft, with one in three claiming that their boss had stolen overtime pay.

“Some fast-food employers simply refuse to pay the time-and-a-half for hours over 40,” said Stephan Cha-Kim, a labor lawyer for “Make the Road New York,” an advocacy organization for low-wage workers. After learning of the New York hearings, she elaborated on the practices that were in question: “Others spread out pay for employees with more than 40 hours across multiple paychecks to avoid overtime, a blatant fiction we have seen commonly deployed in numerous other industries.”

New York’s 2011 Wage Theft Prevention Act (along with other measures from the past few years) will have an uphill battle in light of the daunting state of current economic realities. “For hard-working employees in low-wage industries like fast food, current wages, even in the rare cases they comply fully with the law, are at their lowest in real terms in decades and cannot support even survival at the poverty level,” explained one labor spokesperson at the council hearing.

The following statistics help put the problem in perspective: the majority of fast-food workers earn close to the minimum wage of $7.25 an hour (federal min wage), placing them beneath the federal poverty line of $23,283 for a family of four. And yet even wages over the minimum rate can’t come close to meeting the day to day needs of families trying to survive in New York City.

According to EPI’s budget calculator, a family of four in New York requires a minimum of $93,502 per year to cover the costs of child care, rent, groceries, transportation, health care, taxes, and other expenses like clothing and household goods.

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Emery Reddy