University of Minnesota unit examines wage theft issues

A series of articles and videos about "wage theft" appeared last month on a University of Minnesota website, describing how a large number of workers in Minnesota are routinely not paid overtime, shorted in paychecks or not paid at all.

Those practices, which violate state and federal law, are described in detail at workdayminnesota.org, which is sponsored by the Labor Education Service, a unit at the U's Carlson School of Management.

The subject is also being discussed at Minneapolis City Hall as one of the pillars of Mayor Betsy Hodges' Working Families Agenda. But it's unclear so far what role the city may play in cracking down on wage theft.

The Workday articles offer a glimpse into the myriad problems of lower paid workers, often undocumented, who are sometimes reluctant to challenge employers for fear of being fired or even deported.

"For 45 days we worked without pay and about a week later [the employer] filed for bankruptcy," says Robin Pikala, a personal care assistant, in one video.

"My money was short, and I wasn't able to look at the time sheet myself," says Lovie Franklin, a temp worker in another incident. "They're treating you like you're a slave."

The wage theft series includes nine articles and eight videos and is the biggest project in Workday's 15 years of existence, says Barb Kucera, who has been editor of the online site since it started.

The lead article in the series cites data from a report in 2014 by the U.S. Department of Labor that states that in fiscal 2012, its wages and hours division collected more than $280 million in back wages for more than 308,000 workers.

The Economic Policy Institute reports that in 2012, state departments of labor recovered $172 million for workers, state attorneys general recovered $14 million and private attorneys recovered $467 million in wage and hour class action lawsuits.

"Wage theft" is relatively new terminology, born in the early 2000s as advocates in worker centers, pushing to improve wages and conditions for nonunion workers, searched for words to describe the deliberate withholding of pay. It gained popularity after the 2008 publication of a book, "Wage Theft in America," by Kim Bobo, founder of Interfaith Worker Justice, a national organization.

In the past eight and a half years, Centro de Trabajadores Unidos en la Lucha (CTUL), the Center of Workers United in Struggle in Minneapolis, has recovered over $2 million in stolen wages and damages through direct action and court cases, says Brian Merle Payne, the group's co-director. In one instance, 30 workers at a local restaurant won $10,000 in back wages and unpaid overtime, after the workers and supporters picketed for about a month, he said.

The Minnesota Department of Labor and Industry has a fact sheet on wage theft. It reports that in the past four years state investigators returned more than $2.8 million to nearly 15,000 Minnesota workers through its enforcement efforts.

What struck Howard Kling of Labor Education Service, who oversaw the video reports for the Workday project, is that in some areas, wage theft has become what he calls a "business model."

Burt Johnson, general counsel for the North Central States Regional Council of Carpenters, said subcontractors in the residential construction industry frequently pay straight time to workers, rather than time and half, even when they work overtime. The pay, he says, is funneled through labor brokers who pay the workers in cash. Failure to pay overtime to such workers is against the law.

Randy Furst • 612-673-4224 Twitter: @RandyFurst