State helping workers fight ‘wage theft’

Bill Knight column for Mon., Tues. or Wed., Jan. 21, 22 or 23

Illinois has one of the strongest laws in the country with its Wage Payment and Collection Act helping workers recover pay withheld from them in so-called wage theft cases and discouraging employers from law-breaking. The law lets current or former employees file claims against employers for disputes ranging from a last paycheck and earned bonuses to illegal deductions or lack of compensation for required work.

Illinois’ Department of Labor (IDOL) has handled fewer claims and higher recoveries since the law was strengthened in 2010. However, last month, the U.S. Supreme Court heard arguments that could make such enforcement difficult since an anti-worker decision could weaken class-action lawsuits.

“Symczyk v. Genesis Healthcare presents another case in which conservatives on the Supreme Court might erect a barrier making FLSA [the Fair Labor Standards Act] harder to enforce,” said Scott Lemieux, a political science professor at New York’s College of St. Rose.

Laura Symczyk worked as a registered nurse at a nursing home operated by Genesis Healthcare Corp. in Philadelphia, Pa., in 2007, when the employer routinely docked workers’ pay for lunch breaks that were not taken, Symczyk said. Genesis offered Symczyk $7,500 plus fees to settle, but she rejected the offer because she sought standing as a class-action suit involving many workers who lost pay under the practice. Genesis seeks a dismissal because, it says, the offer would have satisfied Symczyk's claims.

“Class-action lawsuits are absolutely critical,” Lemieux said. “Many workers who have their rights violated lack the knowledge or resources to pursue claims and can also be subject to intimidation.”

Wage theft itself is widespread but mostly unacknowledged. Temporary workers and employees at bullying companies with no job security are especially vulnerable to managers forcing people to work without clocking in, through breaks, or unpaid overtime.

A recent study by the University of Illinois at Chicago underscored the negative impact of wage theft on more than 300,000 workers in Chicagoland, plus the overall economy. Researchers found that almost half of the low-wage workers surveyed experienced at least one pay-related violation and that full‐time, year-round workers surveyed lost more than $2,500 out of total annual earnings of $16,000, due to workplace violations.

UIC researcher Nik Theodore said that more than $7 million a week is stolen from workers – in the Chicago area alone. The consequences to workers and to the economy include keeping working families in poverty, reducing consumer spending and tax revenues, and forcing responsible companies into unfair competition with law-breaking employers.

Previously, employers found guilty of cheating workers over pay they’d earned were liable just for back pay (which meant that employers essentially kept workers’ money – even temporarily – as an interest-free loan without permission). Under previous Illinois administrations, said Chicago community organizer Adam Kader, “the state-level Department of Labor was 0% effective in our experience.”

Illinois’ state wage-theft law was toughened so workers could take alleged violations to IDOL, which has greater oversight in dealing with the 10,000-plus wage theft claims it gets each year and a streamlined process to resolve claims of less than $3,000 (most of the cases).

Also, workers should be protected from retaliation for reporting alleged violations in public forums. Another provision enables employees to file suit in circuit court against individuals, instead of their companies, making it harder for employers to escape obligations by declaring bankruptcy. If found guilty, a violator can be fined $250, plus interest and legal fees.

Further, for the first time ever, workers are permitted to file class-action lawsuits against employers.

The toughened law, SB 3568, passed almost unanimously, with a 56-0 Senate vote and a 112-1 vote in the House, where Shane Cultra (R-Onarga) cast the lone opposing ballot.

IDOL spokeswoman Anjali Julka said, “The amendment to the [law lets the Department] provide an expedited hearing process; enter an enforceable judgment versus a wage demand; and impose statutory damages, fees and penalties.”

According to state records, the year 2010 had 5,691 claims, and $1,714,619.75 was recovered for workers. In 2011 – the new law took effect that Jan. 1 – 4,714 claims were heard but $1,980,241.57 was collected; in 2012, more than 4,100 cases were heard and $2,632,497.82 was collected.

“The small-claims process includes individual as well as ‘class’ or ‘group’ claims filed with the Department],” Julka added.

Also, $2,500 in penalties was collected in 2011, and a whopping $70,250.20 in penalties was collected last year.

“The law is good, but it’s limited,” Kader said. “You need different kinds of community pressure to win those complaints, those lawsuits. Our most heavy emphasis is still on developing and perfecting our direct-action strategies.”

Such strategies could become crucial if the Supreme Court impedes class-action suits.

[PICTURED: Poster from Interfaith Worker Justice/ iwj.org]