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Lawsuits Show ‘Wage Theft’ Occurring Throughout Country

Given that yesterday was labor day this seems like a good time to look at the state of the American worker. Though most workers are already doing worse after the recession and so-called “recovery” a new phenomenon has been discovered that makes a bad situation even worse. According to a series of lawsuits that have been filed though the country, Corporate America has found a way to pay its workers even less through a practice known as “wage theft.”

Wage theft occurs when a company takes away hours that have been worked and/or takes gratuities such as tips from workers. For workers who are already working for minimum wage the removal of hours or taking of tips can mean missing the rent and providing for their family.

Part of the reason for the increase in wage theft is due to more common use of temp and contract workers in the wake of recession. Those workers are more vulnerable to both manipulation by the employer as well as intimidation that they may lose their job if they complain. The workers victimized are also more likely to be immigrants which also puts them at a disadvantage when dealing with a crafty and cynical employer who knows how to work the system.

Some federal and state officials agree. They assert that more companies are violating wage laws than ever before, pointing to the record number of enforcement actions they have pursued. They complain that more employers — perhaps motivated by fierce competition or a desire for higher profits — are flouting wage laws…

David Weil, the director of the federal Labor Department’s wage and hour division, says wage theft is surging because of underlying changes in the nation’s business structure. The increased use of franchise operators, subcontractors and temp agencies leads to more employers being squeezed on costs and more cutting corners, he said. A result, he added, is that the companies on top can deny any knowledge of wage violations.

Many hands make light work of wage regulations? Much like developers who use illegal labor then pass the blame off on contractors, employers can underpay workers they hire from a temp agency and blame the agency for all compensation not being accounted for. Not hard to see why unions are viewed as such a threat to the status quo is it?

Perhaps if these lawsuits are successful then employers will think twice before erasing hours worked and pocketing tips from their employees. Though given how pathetic the wages are for many of these jobs it might take more than not stealing from their employees for workers at some of these companies to have any economic security.

In a completely unrelated note, fast food workers are planning another strike on Thursday to fight for a $15 an hour wage.

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Jane Hamsher

Jane Hamsher

Jane is the founder of Her work has also appeared on the Huffington Post, Alternet and The American Prospect. She’s the author of the best selling book Killer Instinct and has produced such films Natural Born Killers and Permanent Midnight. She lives in Washington DC.
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