Tag: wage theft

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Wage Theft Crisis

Wage theft crisis, requires employment lawyers experienced in class actions, wage and hour violations, labor law.

The Hidden Theft: Billions Lost in Unpaid Wages

Injustice is not always visible – especially when companies subtly dip into their employees’ hard-earned wages. A recent study from EPI unraveled how employers are unlawfully paying less than the minimum wage to their employees – a subtle form of theft that is costing workers billions of dollars every year.

The Impact of Wage Theft: By Numbers

According to the survey data, around 2.4 million workers from the top ten most populous U.S. states are victims of this ongoing wage theft, losing roughly $8 billion annually. On an individual level, affected workers lose an average of $64 per week, accounting for almost a quarter of their weekly earnings. If these workers were paid correctly, 31% of those struggling with poverty would be lifted above the poverty line.

The Crime Wage Theft Hotspots

Minimum wage violations are more prevalent in some states than others. Florida leads the pack with a violation rate of 7.3%, followed by Ohio (5.5%) and New York (5.0%). However, when it comes to the highest amount of lost wages due to these practices, Texas, Pennsylvania, and North Carolina top the chart.

The Most Affected Demographics

Unfortunately, this unscrupulous practice is more likely to affect certain groups. Our young workforce (ages 16 to 24), women, people of color, and immigrant workers often report being paid less than the minimum wage. Part-time employees, service industry workers, and unmarried workers, especially single parents, also fall victim to these violations at a higher rate.

The Bigger Picture

When looking at the grand scale of things, the financial exploitation of workers is staggering. Bad employers are stealing around $15 billion annually from their employees, purely from minimum wage violations alone. This amount surpasses the total value of property crimes committed in the U.S. each year. Yet, there is a stark difference in the resources allocated to combat wage theft compared to property crime.

This substantial wage theft affects workers and puts undue pressure on taxpayers and state economies. Around one-third of workers experiencing these violations rely on publicly funded assistance programs like SNAP and housing subsidies. Moreover, wage theft artificially lowers labor costs for the “thieving” companies, creating an unfair competitive advantage and putting downward pressure on wages industry-wide.

The Solution

Enforcing tougher wage and hour laws and strengthening enforcement against wage theft should be a priority to deter higher rates of violations. Furthermore, raising wages for low-wage workers could lead to significant public savings and improvements in our collective health, education, and social mobility.

Nobody should be robbed of their hard-earned money, especially under the guise of employment. Let’s join hands to bring this hidden theft to light and take appropriate action.

One notable example of combating wage theft is the recent victory of Disneyland employees, who filed a class action lawsuit that resulted in a $233 million award for their lost wages. This case highlights how employees can unite to challenge unfair labor practices by collectively filing a class action lawsuit. Such lawsuits allow workers to pool their resources, share their grievances, and present a united front against powerful employers. To effectively pursue this legal avenue, employees should consider hiring an experienced employment law attorney who handles class action cases. These attorneys can guide employees through the legal process, ensuring their voices are heard and their rights are upheld while potentially securing significant restitution for lost wages.

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Disneyland Workers Recover $233 Million in Wage Theft Class Action Lawsuit

Unions - collective bargaining, class actions.

The Dire Plight of Disneyland Workers and the Importance of Labor Law Enforcement

In 2018, a disturbing report from Occidental College indicated a grim reality concerning Disneyland employees. Findings pointed out a 15% plummet in real hourly wages from 2000 to 2017. Consequently, three-quarters of the employees did not earn enough to cover basic necessities, and over half the workforce lived under continuous eviction concerns. Even more startling, one in ten employees had experienced homelessness within the previous two years.

Meanwhile, the Disney CEO enjoyed an enormous paycheck of $65.6 million in 2018, highlighting the stark wage disparity in the company. Fortunately, this injustice spurred the Anaheim voters into action by approving Measure L, or the Living Wage Ordinance, which pushes for a progressive increase in the minimum wage of hospitality employees benefiting from city subsidies.

However, despite the popular support for Measure L, Disney fiercely debated and resisted its efficient application at Disneyland. This defiance eventually led to a class action lawsuit against Disneyland, which put forth a robust argument that the company still benefited from city subsidies and, hence, should comply with Measure L.

After an initial setback, the Disneyland employees finally triumphed when a California appeal court overturned the initial ruling in 2023, deeming the bond agreement a “city subsidy.” This victory was cemented when the California Supreme Court declined to review the case, leading to a landmark settlement of $233 million for wage theft—the largest in California history.

Such cases of wage theft are far more common than one might think. American workers lose approximately $15 billion annually to minimum wage violations alone, with other forms of wage theft costing an estimated $50 billion annually. However, a dismally small fraction of these stolen wages are ever recovered, which comes down to a lack of resources and scant attention given to wage theft investigations.

Nationally, the Department of Labor recovered only about $3.24 billion in stolen wages from 2017 to 2020. This lack of recovery potential is due in part to the complex nature of class-action lawsuits and the minimal resources available to state and federal agencies responsible for investigating wage theft cases. To further complicate the issue, policies like the Payroll Audit Independent Determination (PAID) program, if reinstated, could enable companies to avoid penalties for wage theft if they self-reported and paid back the stolen wages.

A key driving force behind successful wage theft recovery is the support of experienced employment law attorneys with expertise in class action cases. The Disneyland case exemplifies how these professionals can help employees navigate complex legal avenues to claim their rightful wages. They understand the intricacies of employment law, have the resources to build a compelling case, and have the will to fight for justice.

In conclusion, the Disneyland class action case poignantly reminds us of the wage theft issue plaguing many American workers. There is an urgent need for more robust labor law enforcement, better funding for relevant state agencies, and the crucial role of experienced employment law attorneys in the battle against wage theft.

This article focuses on the amazing reporting of Judd Legum at Popular Information.

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Wage Theft $912,594 Recovered: Understanding Your Rights and Protections

Race discrimination, retaliation, workplace violation lawyers of Los Angeles Helmer Friedman LLP.

As we navigate the complex world of labor laws, it is essential to understand the rights and protections that safeguard workers against wage theft. Whether it be through crafty tip pools or employers illegally retaining tips from credit card purchases, workers must be aware of their rights to receive the overtime pay to which they are entitled.

The Fair Labor Standards Act (FLSA) is one such piece of legislation that works to uphold these rights. A recent case involving a Londonderry brewery and restaurant, Pipe Dream Brewing LLC, highlights the need for workers to be aware of these protections. The establishment was found to have violated the FLSA by retaining tips paid via credit card transactions and denying overtime wages to exempt employees.

These infractions resulted in the recovery of $912,594 for 44 employees. This sum included back wages, withheld tips, and liquidated damages. The U.S. Department of Labor’s Wage and Hour Division, which facilitated the recovery, also assessed $5,148 in civil money penalties for the tip-related violations.

“No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left.”

The law is explicit—managers, supervisors, and employers are strictly forbidden from participating in tip pools or pocketing any portion of employees’ tips for any reason. These protections ensure that workers can fully realize the wages they have lawfully earned.

Federal and State laws, such as California Labor Code Section 351, offer robust protection against wage theft. This code explicitly prohibits employers and their agents, including supervisors and managerial personnel, from sharing in or retaining any portion of a gratuity intended for employees. The law clearly states that gratuities are the sole property of the employees to whom they are given:
“No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left.”

This case clearly illustrates the costly consequences for employers who attempt to circumvent these laws. It emphasizes the importance of employees understanding their rights and the mechanisms in place to protect them. The Wage and Hour Division offers resources like the Workers Owed Wages online search tool to assist those in claiming back wages, should they believe they are owed.

As employees, it is crucial to stay informed about the specific laws that protect us from wage theft, tip pooling, and other unscrupulous practices. The Fair Labor Standards Act safeguards serve as a robust shield, ensuring that workers get the pay they have worked hard for and duly deserve.