The theft of wages

As human beings, we are all susceptible to making stupid mistakes. It is a trait that we are all born with. Some mistakes are so horrendous, the people who make them are either killed or alternatively, others are killed because of the stupidity of those who made the stupid mistakes. Many people lose a great deal of money because of their stupidity but most people lose their money because of the greed of others. This article is about the greed of some employers who steal money from their own employees by not paying them the wages they earned.

Wage theft is the illegal underpayment or non-payment of workers' wages. It affects millions of workers each year in the United States and in Canada. I was the victim of such a theft in Victoria, British Columbia in 1955. Here is my story about such a theft.

I had applied for a job as a trainer in a Gym where adults could go to build up their bodies. I had previously taught gymnastics and swimming in the Victoria YMCA and had a fairly good body by then. It was said that I had an hourglass figure, unfortunately as the years have gone by, the sand has all shifted.

I was immediately hired by the Gym’s manager and he told me that I would be paid $200 a month and that I would be paid in 30 days. That was a common practice back then. When the 30 days had passed, I went to the manager to collect my month’s pay. He made me an offer. He said that if I was willing to forego my wage for that month and was also willing to work for another month without being paid, he would give me a life membership in the club even if I wasn’t working in the club after that. I foolishly accepted his offer. Thirty days later when I went to pick up my life’s membership, he gave it to me. Two days after that, the doors were closed. The Gym had filed for bankruptcy. The trustee in charge of the bankruptcy told me that since I had signed a document stating that I was willing to work for the two months without being paid, I couldn’t file a claim for back wages.

Yes. I was stupid. I was also gullible. I never made that kind of mistake again. I made mistakes but never as stupid as that one I made in 1955.

Wage Theft includes violations of minimum wage laws; not paying time and a half overtime pay; forcing workers to work off the clock; workers not receiving their final paychecks; misclassifying employees as independent contractors to avoid paying minimum wage and overtime (as well as employers' share of taxes and other deductions); and not paying workers at all.

The employers who do this to their employees are greedy pigs and should be severely punished for what they have done to those employees whom they cheated.

In May, 2011, two Ontario caregivers decided top sue their employers for extremely poor pay and treatment on the job. Ontario caregivers, Lilliane Namukasa and Vivian de Jesus, who are suing their former employers for unpaid wages and wrongful dismissal, were certainly not victims of slavery. They were not bonded, they could move freely, and they were not physically abused. But if their allegations prove true, they are victims of the severely unjust labour practices that abound in the realm of domestic work. In Namukasa's case, she was paid just $2,100 for two years worth of full-time work as a nanny by her employer, Beatrice Ssekabira. That comes out to only $20.90 a week. She is seeking $162,000 for breach of contract and unpaid wages, and holiday pay and vacation pay, as well as $33,000 in wrongful dismissal compensation. She is now working as a live-in nanny for three children, and says she is being treated well. De Jesus says she cared for an elderly woman and her two adult children with developmental disabilities for 10 years. In the last four years working for them, she alleges, she was living with them and putting in 132 hours a week — almost three times the statutory 48-hour work week — with no overtime pay. She is now seeking $55,000 in lost wages and $104,000 in other compensation.
The vast majority of live-in caregivers immigrating to Canada (5,969 of a total of 6,273 in 2009) are women. They come from other cultures, speak other languages and generally have less education than the families they are living with.

These families must sponsor them in a process that Citizenship and Immigration Canada is making more rigorous in an attempt to stem the flow. As of April of this year, new program requirements are in place that amount to additional bureaucracy, longer waiting times and more severe penalties for employers who don't meet their commitments.

And these are extensive. On paper, Canadian employers of live-in caregivers must provide full-time employment within their home and private furnished space for them to live in. They must pay caregiver's health insurance, enroll them in workers' compensation, pay all their transportation costs to and within Canada, pay any recruitment agencies (and not dock these fees from their workers' salary), complete and submit to Human Resources an employment contract that conforms to its employment terms (in Ontario, these are $10.25 an hour for a maximum of 48 hours a week, plus an additional $85.25 per week assuming meals and accommodation are provided). Bosses must keep complete records of over-time hours, review and adjust wages in accordance with Human Resources' requirements, and secure valid work permits for their employees.

The employer of Lilliane Namukasa did not fulfill those obligations or follow the dictates as set down by the government.

The constant effort by employers to exploit legislative loopholes and promote new forms of unconventional work arrangements (such as temporary agency work, term, contract and involuntary part-time work, as well as jobs intentionally misclassified, among others) has created a growing second-tier workforce - one marked by very low wages, constant insecurity, few rights and a lower standard of living.

One in every five low-wage workers in El Paso, Texas receives under minimum wage.” This is just one of the many disturbing findings presented by from Paso del Norte Civil Rights Project, Border Network for Human Rights, the Labor Justice Committee, Dr. Cristina Morales, and Eric Murillo who unveiled their report on wage theft and labor violations in the El Paso area at the local office of the Border Network for Human Rights.

Jorge1 was a worker for a local small roofing company, Danny’s Roofing, earning $50 a day. After several months with the company, his employer informed him there was no longer any work for him. When Jorge asked for his wages for the previous two weeks, the employer told him to wait another week. He called back the next week, but the company told him that it didn’t have the wages. When Jorge said he would make a complaint, his employer said, ―Good luck! The hapless worker complained to the Texas Workforce Commission, but nothing happened. Finally, when Jorge went back to the company to ask again for wages, his former boss threatened to call the police and have Jorge arrested for trespassing on the property.

Something like that occurred in Toronto when a woman called Kelsang was working for a fast-food restaurant called Babaz that specializes in Middle Eastern food. She agreed to work for $10.00 an hour even though she knew that she would be working less than the Ontario minimum wag that is $10.25 an hour. When she got her first pay, it was only for $400 when it should have been for $700 considering the hours she had worked at the restaurant. When she asked the owner, George Kottas when she would get the rest of the money, this creep told her that she would get it in her next pay. Her next pay was $600 and this creep then told her that he would pay her the balance owing the following Monday. When she showed up, he didn’t.

Kelsang is one of 20 other former employees of this particular restaurant who have complained to the Ontario Ministry of Labour about this creep not paying them their wages that were due, their vacation time, their overtime and monies due to them for working on public holidays. Three of his former employees are owed $8,500.

Unfortunately, the outdated Ontario Employment Standards Act needs to be revised. It permits victims like those working for the creepy owner of the Babaz Restaurant to rip of his employees with impunity. What it needs is heavy penalties for offenders like George Kottas and Beatrice Ssekabira and others of their ilk. These kinds of creepy people must be made aware that ripping of their employees is fraught with great risks to themselves, both financial and their freedom.

Last year, as much as $214 million was owed by solvent companies to employees in Ontario for unpaid wages. Of that amount, only $43 million was collected by the government on behalf of the unpaid employees. If the companies don’t pay the rest, they should be put into bankruptcy and all wages should be paid to the employees before the shareholders get their own investments back. Only $14 million was collected by bankrupt companies.

Another scam of businessmen who go into business is to set up franchises and force their employees to become independent contractors. I represented such an employee in court who sued for back wages. The employer tried to convince the court that my client was an independent contractor. I shot that argument down when I was able to prove that my client was working hours set by the employer. The court found in favour of my client and the employer ended up having to pay thousands of dollars to his hundred or so employees he had claimed were independent workers when they were not.

Do you enjoy bathroom breaks and sick time at work? Does your paycheck arrive on time every month? While these standard labor practices are recognized in many workplaces, there are still employers who regularly and unapologetically refuse to recognize the law. As a result, hundreds of employees endure abusive working conditions each year in the City of San Francisco alone.

On August 2, 2011, San Francisco city officials enacted the Wage Theft Prevention Ordinance, which strengthens the city’s ability to enforce labor laws. The Wage Theft Prevention Ordinance in San Francisco seeks to change this fact. The ordinance grants more power to the San Francisco Office of Labor Standards and Enforcement, which investigates wage theft cases in the city. Additionally, employers who retaliate against a worker who reports an abuse will now pay a double fine.

In Chicago, a study conducted in 2010 reported that $7.3 million was stolen from workers each week in that and its county alone.

Over the previous two years, as the owners of Duraco Products–a suburban Chicago maker of plastic garden products–let their company slide towards its current bankruptcy, they frequently failed to pay their workers their full wages, always with some excuse about banks or other problems. Unbeknown to its employees, the company was pocketing paycheck deductions for health insurance or child support leaving its employee under the impression that they were covered.

Wage theft is quite common, especially among lower-wage workers, as shown by a new study of the Chicago labor market prepared by Nik Theodore and others for the Center for Urban Economic Development at the University of Illinois at Chicago.

Theodore's survey showed how pervasively employers steal money from their already low-wage workers. For example, one fourth of the population they surveyed was paid less than the minimum wage, a dollar or more less in three-fifths of those cases. One-fourth of their surveyed workers put in more than 40 hours in the previous week, but two-thirds of them received no compensatory time-and-a-half overtime pay. There were similarly widespread violations of laws on unpaid ‘off-the clock’ work, meal breaks, provision of pay stubs and other workplace practices.

Violations generally, but not universally, vary with characteristics of both the work and the workers. Abuses are more typical in certain industries (especially private household work, personal and repair work, retail and drug stores, social assistance and education), specific occupations (child-care workers, personal and repair servicers, building service workers, retail workers), and worker characteristics. Wage theft is more common against foreign-born workers, and–among native born–against African-Americans, Philippinos, against women, older workers, and less educated workers. Small businesses and employers who pay cash or flat weekly rates also more typically cheat their workers, though big corporations like Wal-Mart do it as well.

Because enforcement has been spotty at best and the penalties minuscule, many scumbag employers continue to rip of their employees. “Something is wrong with the system where a worker who steals a hamburger from a gas station, he goes to jail," says Chicago Workers' Collaborative executive director Leone Jose Bicchieri, "but when rich people steal wages from their workers, it's called embezzling or something else, and maybe years later they pay a small fine."

Here is how I think these pond bottom feeders should be dealt with. If they are convicted of wage theft, they should pay those whom they stole their earnings from for an amount that is double the amount that they have stolen from their employees. They should also be personally fined for the same amount that they stole from their employees after the amount has been doubled. If they threaten their employees because they were demanding their pay, the fine should be tripled. If they are convicted of wage theft again, they should be sent to prison for six months and a year for any subsequent offence after that. If they are convicted of wage theft a second time, their company should be taken over by a supervisor who has been appointed by the government. That supervisor will be paid from the earnings of the company. If the owner of the company is convicted of wage theft a third time, the company should be put up for public auction and the convicted owner and his family should be denied the right to submit an offer.

Any owner of a company who steals from his employees a third time will have forfeited his right to own his company even if he was the founder. Employees have a higher right to be paid for the work they do without having scumbag owners stealing their wages from them.