Amid a pile of Election Day defeats, one bright spot was a set of ballot initiatives for minimum wage increases, which voters approved in four states and two cities. But now the real work begins. With several thousand workers slated for a raise in Alaska, Arkansas, Nebraska, South Dakota, San Francisco and Oakland—plus a slew of other state and local wage-hike proposals in the pipeline—the pressure is on to ensure they actually get paid in full.
Regardless of what the minimum wage law says, many workers inevitably end up earning less. Employers get away with rampant wage theft because of ineffective, understaffed regulatory agencies, or because workers are fearful about complaining, or just unaware of their legal entitlements.
The central problem in minimum-wage enforcement is that it tends to be complaint driven, which puts the burden of reporting on the worker. If you’re earning less than minimum wage, you’re likely severely poor by definition, and have little incentive to risk your job to just claim the couple of dollars a day your boss skims off your paycheck.
But those little pay gaps add up. The Economic Policy Institute calculates: “When a worker earns only a minimum wage ($290 for a 40-hour week), shaving a mere half hour a day from the paycheck means a loss of more than $1,400 a year, including overtime premiums. That could be nearly 10 percent of a minimum-wage employee’s annual earnings—the difference between paying the rent and utilities or risking eviction and the loss of gas, water, or electric service.” Overall, according to projections based on surveys of low-wage workers, “wage theft is costing workers more than $50 billion a year.”
Seattle is the case study examined in a new analysis by the National Employment Law Project (NELP). The city became a model for minimum-wage campaigns last June, by passing a landmark $15 floor wage, phased in over seven years, affecting an estimated 100,000 workers. But whether they all get paid their due depends on whether the city can also create a model enforcement program. To that end, Seattle became the second city in the country (after San Francisco) to establish its own municipal office of labor enforcement, to investigate wage-and-hour violations and monitor employers on a local level.