Low-wage workers often cheated, new study finds

'The typical worker had lost $51 the previous week through wage violations from average weekly earnings of $339 - a 15% loss in pay.'

Broken Laws, Unprotected Workers - Violations of Labor and Employment Law in America's CitiesOttawa (4 Sept. 2009) - A new American study, entitled Broken Laws, Unprotected Workers, says low-wage earners are often denied proper overtime compensation and are frequently paid less than the minimum wage.

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Low-wage workers are routinely denied proper overtime pay and are often paid less than the minimum wage, according to a new study based on a survey of workers in New York, Los Angeles and Chicago.

Among the findings:

  • 57% of workers sampled had not received mandatory pay documents the previous week. The documents are intended to help make sure pay is legal and accurate.
  • Among workers who receive tips, 12% said their employer had stolen some of the tips.
  • One in five workers reported having lodged a complaint about wages to their employer or about efforts to form a union in the previous year.
  • Among these workers, 43% said they had experienced some form of illegal retaliation, like firing or suspension.
  • In instances when workers’ compensation should have been used, one third of workers injured on the job paid the bills for treatment out of their own pocket and 22% used their health insurance.
  • Workers’ compensation insurance paid medical expenses for only 6% of the injured workers surveyed.

Researchers 'surprised'

“We were all surprised by the high prevalence rate,” says Ruth Milkman, one of the study’s authors and a sociology professor at the University of California in Los Angeles and also at City University in New York. The survey was financed by the Ford, Joyce, Haynes and Russell Sage Foundations.

In canvassing 4,387 workers in various low-wage industries, including apparel manufacturing, child care and discount retailing, the researchers found that the typical worker had lost $51 the previous week through wage violations from average weekly earnings of $339 - a 15% loss in pay.

The researchers said one of the most surprising findings was how successful low-wage employers were in pressuring workers not to file for workers’ compensation. Only 8% of those who suffered serious injuries on the job filed claims to pay for medical care and missed days at work stemming from their injuries.

“The conventional wisdom has been that to the extent there were violations, it was confined to a few rogue employers or to especially disadvantaged workers, like undocumented immigrants,” said Nik Theodore, one of the study's authors and a professor of urban planning and policy at the University of Illinois, Chicago. “What our study shows is that this is a widespread phenomenon across the low-wage labor market in the United States.”

Illegals, immigrants and Americans

According to the study, 39% of those surveyed were illegal immigrants, 31% were legal immigrants and 30% native-born Americans.

The study found that 26% of the workers had been paid less than the minimum wage during the week before being surveyed and that one in seven had worked off the clock the previous week. In addition, 76% of those who had worked overtime the week before were not paid their proper overtime, the researchers found.

The new study was conducted in the first half of 2008, before the brunt of the recession hit. The median wage of the workers surveyed was $8.02 an hour - supervisors were not surveyed - with more than three-quarters of those interviewed earning less than $10 an hour. When the survey was conducted, the minimum wage was $7.15 in New York State, $7.50 in Illinois and $8 in California.

No excuse, Solis says

Labor Secretary Hilda L. Solis responded to the report with an e-mail statement, saying, “There is no excuse for the disregard of federal labor standards — especially those designed to protect the neediest among us.”

Ms. Solis said she was in the process of hiring 250 more wage-and-hour investigators. “Today’s report clearly shows we still have a major task before us,” she said.

The study found that women were far more likely to suffer minimum wage violations than men, especially among women who are illegal immigrants. Among American-born workers, African-Americans had a violation rate nearly triple that for whites.

“These practices are not just morally reprehensible, but they’re bad for the economy,” says Annette Bernhardt, an author of the study and policy co-director of the National Employment Law Project. “When unscrupulous employers break the law, they’re robbing families of money to put food on the table, they’re robbing communities of spending power and they’re robbing governments of vital tax revenues.”


The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

More information:
Download report: Broken Laws, Unprotected Workers
- Violations of Employment and Labor Laws in America's Cities - pdf


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