Thursday, January 28, 2010

Cheating Low-Wage Workers

Paycheck According to a new report by the National Employment Law Project, over half of New York City's low-wage workers are not getting the paychecks that they deserve.  The report was based on a survey of low-wage workers, including some who were undocumented. The New York Times summarizes the findings:

The average worker in a low-wage job in the city lost out on $58 a week, or more than $3,000 a year, because she was not paid minimum wage or overtime, or because of some other violation of labor laws . . . . These workers, including laundry employees, home health-care aides, deliverymen and grocery baggers, would still earn less than $400 a week, on average, if they were being paid fairly, according to the report.

In all, the report estimated, more than 315,000 workers were denied some of their deserved pay, amounting to a loss of more than $18.4 million a week — nearly a billion dollars a year — to the workers, and therefore to the neighborhoods where they spend their paychecks or to the families to whom they send money. . . . 

The project found that more than one-fifth of all low-wage workers in the city were paid less than the minimum wage, which was $7.15 an hour when the survey was conducted in 2008. But the incidence of that underpayment varied widely by industry: ranging from almost 53 percent of all workers in laundries and dry cleaners to just 2 percent of residential construction workers, the report showed.

Failure to pay overtime to employees who worked more than 40 hours a week was even more common. More than three-fourths of the workers surveyed had not been paid 1.5 times their regular wages for overtime hours, as the law requires, according to the report. About one-fourth of them were paid less than their regular hourly rate or not at all for those extra hours, the report said.

The authors estimated that there were more than 585,000 non-managerial workers in the city’s low-wage industries, which were defined as those whose median wage was less than $13.07 an hour – 85 percent of the city’s median wage.

The report also concluded that the state’s workers’ compensation system was “not functioning as intended.” Of the workers surveyed who had been seriously injured in the past three years, only about one-tenth of them had filed claims for workers’ compensation. Nearly half of them said they had been required to keep working despite their injuries, the report said.

NELP did note that the New York State Department of Labor is being more aggressive about going after employers that commit wage violations, so there's hope that the problem will lessen some.  Also, I find the disparity in industries interesting and wonder whether a higher rate of unionism in the residential construction industry is a partial explanation to its much lower rate of wage theft.


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