Obama: Stop the Great American Wage Rip-Off!

President-elect Barack Obama and his team are going to have their hands full when they take the reins of government in January. Wage theft probably won't be the Obama administration's top priority, but it should be near the top of the list for the new secretary of labor as the nation's leaders seek to stimulate the economy. Unlike the banking industry meltdown or the war in Iraq, wage theft is relatively easy to fix. It will require some money, but nothing like the bailout or the Iraq war. A modest investment would result in billions of dollars of stolen wages to be paid directly to workers. Within one four-year term, the nation could stop most wage theft if we had the political will to do so.

At least 30 billion dollars, perhaps more, is stolen each year from millions of workers' paychecks by employers who do not pay them what they are legally owed.  A handful of federal wage and hour investigators, fewer than 750 to be precise, are charged with protecting the nation's 130 million workers against wage theft.  For a modest 500 million dollars, an estimated 5 billion dollars could be given back to workers through the direct collection of the stolen wages and, more important, through the deterrent effect created by strong enforcement. 

Wage theft is when employers don't pay minimum wage as required by law, deny their employees overtime, take illegal deductions from paychecks, steal tips, misclassify workers as independent contractors or simply don't pay them at all. The New York Times recently reported a classic example of wage theft, in which thirty-six food-delivery workers at two Manhattan restaurants were paid less than $2 per hour. Wage theft is not a small or isolated problem. It is a widespread crisis affecting millions of U.S. workers from whom billions of dollars are stolen each year.

Although perhaps the most egregious wage theft occurs among undocumented immigrants who are easily exploited by unethical employers, the largest dollar amounts are stolen from native-born, middle-class workers who are not paid overtime or are misclassified. And the Department of Labor's wage and hour division (the division most responsible for addressing wage theft), despite the best efforts of many heroic career staffers, is incapable of stopping and deterring it without new leadership, direction, and resources.

President-elect Obama needs to appoint a secretary of labor who is committed to the mission of the Department of Labor and to the deterrence of wage theft. With a wage and hour administrator directly accountable to the secretary, the secretary of labor should implement a four-year plan to stop wage theft. Here's what he or she should do:

On Day One:

Advocate a halt on workplace raids. The decision for this does not rest with the secretary of labor, but the secretary should be a vocal advocate, along with the U.S. Catholic Bishops and most other religious bodies, for stopping workplace raids.

Publicize the Department of Labor's commitment to protect all workers regardless of immigration status and publicly affirm its promise not to report workers to Immigration and Customs Enforcement (ICE). The wage and hour leadership assures me that they do not report workers to ICE, but workers don't know or believe this and it dissuades them from contacting the Labor Department.

Work cooperatively with worker centers, legal clinics, unions, employment lawyers, ethical business groups, and others to fight wage theft.

Talk with employers about the problems of wage theft. If you read most of the speeches made by current Secretary of Labor Elaine Chao, she repeatedly says what a great job the Bush administration is doing and what a great job employers are doing. She has never once mentioned wage theft. She's the secretary of labor. She should have been leading the charge against it. Speaking with employers may not make the new secretary the most popular, but if the he or she doesn't address these issues, who will?