Employers That Don’t Pay Might Never Have To

Alfredo Alegria worked six-day weeks for 2000 Homes Inc., a company that buys houses in disrepair, then renovates and flips them for a profit. Alfredo earned $120/day carrying, drilling and installing 40 pound sheetrock walls and flooring. One day, at the end of Alfredo’s shift, his boss told him he didn’t have his day rate for him. Alfredo continued to work, and for two weeks, his boss kept telling him he had forgotten to go to the bank to get the money.

When Alfredo raised the issue with the owner of the company he was told his services were no longer needed and he never got paid. Alfredo filed a complaint with the NY Department of Labor. It’s been two years since Alfredo filed a complaint with the DOL and his case is still under investigation.

A report by the State Comptroller’s Office found that the Department of Labor is investigating 17,000 wage theft complaints and that 75% of those cases are more than a year old. However, the report did not address, or keep track of, cases after they have been closed by the DOL. There are few statistics regarding how many workers have filed a complaint, won their case and are still waiting for their employer to pay up.

Placido Romero, for example, had to take matters into his own hands. Placido worked at Flaum’s Appetizing, a food processing plant in Brooklyn, where he and his coworkers worked long days for less than the minimum wage. He and a group of his colleagues filed a complaint with the NYDOL. A judge filed a ruling in the workers’ favor for $260,000 to be paid in overtime and minimum wage violations. The owner of Flaum’s, Moshe Grunhut, refused to pay.

The workers from Flaum’s, with help from Brandworkers – a community organizing group – campaigned outside grocery stores that purchased Flaum’s products. It took six years of pressure to get Mr. Grunhut to comply with the Department of Labor’s ruling.

Janice Fine, a professor of Labor Studies at Rutgers University, said employers face little punishment beyond a fine for stealing employees’ wages.

“There has to be strategic enforcement, there needs to be meaningful penalties that are collected with enough frequency to generate real deterrence,” said Ms. Fine. “There needs to be liquidated damages and they need to pay a very high price for not paying workers what they’re owed.”

Alphonso David, Deputy Secretary of Civil Rights in New York, agrees that sometimes it takes too long for workers to get their money. However, he puts the blame outside his agency onto the court’s bureaucratic and slow moving machinery.

“The NY Department of Labor is one of the most aggressive Departments in the country,” defended Mr. David. He pointed out that if an employer does not comply with a judge’s ruling it becomes a matter for the courts to deal with, “these are all legal processes that the Department does not control.”

Ms. Fine acknowledged that the problem is not solely because of the DOL, but a product of the combination of not enough investigations and relaxed punitive measures.

“There needs to be high numbers of inspections and investigations,” said Ms. Fine. “One of the problems is that, very frequently, employers know that their unpaid wage cases are basically just going to be settled and at worst they’re just going to have to pay back what they owe workers.”

Listen to Alphonso David, the Deputy Secretary of Civil Rights, defend the Department of Labor.