PA Bosses Are Stealing Up to $32 Million a Week From Their Workers

A new study out of Temple finds that "wage theft" is rampant.

Pennsylvania bosses stiff their workers to the tune $19 million to $32 million each week, a new report from Temple University’s Sheller Center for Social Justice concludes.

The phenomenon is called wage theft, and it manifests itself in a bunch of different ways. Unpaid overtime. Unreimbursed expenses. Stolen tips. And more.

Up until now, evidence of wage theft has been mostly anecdotal. But according to the Sheller Center report, wage theft is pervasive, particularly in the restaurant and home health care industries. The study concludes that:

  • About 130,000 Philadelphia workers (almost 11% of the Philadelphia workforce) experience wage theft in any given work week.
  • 40 percent of workers surveyed in Philly’s restaurant industry reported working off-the-clock without pay.
  • 90.4 percent of home health care workers suffer from off-the-clock pay violations.

Unsurprisingly, victims of wage theft are low-wage workers who really need every dime they earn. “People are trying to work and meet basic necessities and they can’t make ends meet because employers are stealing wages from them,” says Jennifer Lee, the study’s main author and a faculty member at Temple’s Beasley School of Law.

One of the most common forms of wage theft is unpaid overtime. Consider the example of a construction worker who is paid a daily rate. Over the course of a week, he may accumulate over 40 working hours, thus warranting overtime pay. But because he’s paid by the day, the overtime hours he worked are often overlooked (deliberately or not), effectively robbing him of money the law says he’s owed.

Other employers make illegal deductions from employee paychecks to cover the cost of gas, uniforms, or other supplies necessary for the job. Lee cited a particularly egregious case, in which an employee was continually charged for renting out a company vehicle he made deliveries with. Then there are the bosses who don’t share customer tips, and or those who never quite manage to mail those final paychecks to departing employees.

Unfortunately, there’s not much to prevent employers from stealing the wages of their workers. “If I mispay a worker and the worker sues me in court [in Pennsylvania], I would have to pay the worker the money I owed him plus 25 percent,” says Mike Hollander, a staff attorney at the Community of Legal Services of Philadelphia. That’s not much of a deterrent, particularly when you consider the fact that 36 states have penalty rates set at 100 percent or 200 percent.

“What this means is that if the employer doesn’t pay 10 workers, nine of the employers would have to sue before the employer takes a loss, if you do the math. If it was eight, they would break even,” Hollander elaborates, “which is a pretty insane setup if you think about it.”

If employees do find that they have been robbed of wages, they can file a complaint with the Pennsylvania Department of Labor and Industry. But the department is under-resourced, and, more strikingly, it doesn’t “have any power to determine whether wage theft was committed,” says Hollander. “All it can do is cajole the employer and try and get them to pay or file a lawsuit.”

In other words, the DoL can try and convince employers to pay, but it can’t compel them to pay. This is strange, because the Department of Labor does have enforcement power in a lot of other areas. “For example, if somebody wants to file for unemployment, the Department of Labor determines whether they get the benefits,” rather than simply filing a lawsuit to let a judge make the determination, Hollander says.

At-large City Councilman Bill Greenlee didn’t return a call seeking comment, but he’s said to be pursuing a city-level response to wage theft. It remains to be seen what, if any, government response will can get a handle on this problem. “There are a lot of other influences that are creating this wage-theft problem that are much bigger than the things that we can handle at the city or the state level, like, you know, the free market system, right?” Lee says.

And very little of this, Lee believes, is accidental. “In my opinion, there might be a few employers who are unaware of the laws, but I think that this is all deliberate,” she says. “I don’t think you have big home healthcare agencies operating who don’t understand what overtime is. I mean, that just doesn’t make sense to me. You’re running a business, you should know what the laws are in terms of what the law requires you to pay your employees. And I don’t think that there’s any excuse in saying you don’t know it.”

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