Wage Theft

Ruth Palacios and Arturo Xelo, a married couple from Mexico, work at their fruit stand on April 13 in the Corona neighborhood of the Queens borough of New York.

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.

The Labor Department’s Wage and Hour Division, which investigates federal wage-theft complaints, rarely penalizes repeat offenders, according to a review of data from the division. Public Integrity obtained the records through a Freedom of Information Act request covering October 2005 to September 2020.

The agency fined only about 1 in 4 repeat offenders during that period. And it ordered those companies to pay workers cash damages — penalty money in addition to back wages — in just 14% of those cases.

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.

Ruth Palacios and Arturo Xelo, a married couple from Mexico, disinfected COVID-19 patient rooms at the Memorial Sloan Kettering Cancer Center in New York City. They worked seven days a week for months, Palacios said, but weren’t paid overtime. At the start of the pandemic, they earned the local minimum wage of $15 an hour, she said, but after a few months, their boss lowered their pay to $12.25, she said.

Palacios, Xelo and two of their former co-workers filed a federal lawsuit against the contractor that hired them, BMS Cat, in January. The company did not respond to requests for comment. In court records, it denied that it paid the cleaners less than the minimum wage or that it owed them overtime pay. The hospital did not respond to requests for comment, either.

“The little guys have to speak up because people — the bosses — are taking advantage of their workers,” Palacios said in a video call from her home in Queens.

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