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Thursday, 14 September 2006 03:31

Nathan Newman: Immigrants and Cracking Down on Wage Law Violations

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One thing you can say -- the current debate on immigration is at last focusing attention on the pervasive violations of our labor laws in sweatshops and other parts of the low-wage economy. But instead of getting national legislation to shut down sweatshops around the country, we are getting policies to punish some of the victims -- while leaving the underground economy that breeds undocumented immigration largely in place.

The facts of illegal violations of our wage laws have been clear for years:
The U.S. Department of Labor found in 2000 that 60% of US nursing homes routinely violated overtime, minimum wage, or child labor laws. Another 2004 study from DOL data found that 54% of contractors in the Los Angeles garment industry violated the minimum wage law. And last year, a survey of hundreds of New York City restaurants found that more than half were violating overtime or minimum wage laws.

Read those sentences again. A MAJORITY of businesses in these industries and other low-wage sectors routinely disregard our wage laws. If we are going to hear about "respect for the law," ending this pervasive illegal conduct by employers should be the focus. And while some sweatshop workers are undocumented, the majority are not; so even if you eliminated every undocumented worker from the economy, the sweatshops would remain.

Conversely, eliminate the sweatshops and most of the incentive for employers to recruit undocumented workers disappears, a point Progressive States has made, but also one that the Bush administration endorsed in their recent budget document, which argued, "[L]abor standards enforcement efforts...will help to reduce the economic incentive for such illegal employment practices and will, in turn, help reduce illegal immigration." The problem is that while this rhetoric is nice, the reality is that the federal government has let the minimum wage rate decline to an abysmally low level at $5.15 per hour, provides few enforcement dollars, and applies minor punishments to offenders even if they get caught.

States have begun raising the minimum wage rate across the country, but the next step is for states to pass comprehensive enforcement measures to make sure workers actually get paid. A number of states and local governments have created new innovative approaches to enforcing wage standards. Unfortunately, no state puts all the pieces together for a comprehensive enforcement package, which is what is needed to make serious inroads against the pervasive violations of wage laws in our states -- and deal with many of the public concerns driving fears that immigration is undermining wage standards. So what are the keys?

Increase the Punishment for Violations: In practice, the punishment for violating the minimum wage law and getting caught is usually at worst just paying what is owed or maybe a small fine on top of that. Compared to the profits from underpaying the rest of their employees, such tiny fines in the few instances where a business get caught is just a cost of doing business. States can increase financial penalties, such as triple damages for violations, deny licenses and public funds to repeat violators as "responsible contracting laws" do in a a few states and cities, and apply criminal sanctions to wage law violators as "theft of wages" statutes allow in a number of states.

Expand Funding for Enforcement: Even the best laws are ineffective if no enforcement dollars back them up. States need to both expand their own budgets for enforcement and encourage other groups to step up to help low-wage employees bring actions against wage law violators.

States need to expand state enforcement budgets, which can pay for itself in increased fines, unleash local governments through expanding their enforcement powers around wage laws, fund wage actions by legal services agencies, who often work with exactly the populations suffering these wage violations and enact "Private Attorneys General Statutes" which allow unions and other workers advocates to help bring actions against wage law violators.

Encourage Employees to Bring Complaints: While government or other groups occasionally discover labor law violations, most enforcement of the law is dependent on workers themselves coming forward. Given that this worker population often lacks education on their rights and is afraid to speak out for fear of retaliation, states need to strengthen laws that encourage these employees to come out of the shadows and report wage law abuses.

Reforms should promote employee education on their rights through posting rules in multiple languages in the workplace and giving labor advocates access to non-work areas of employer property to educate employees on their rights, encourage anonymous complaints, and prevent retaliation against employees by strongly punishishing employers who retaliate against employees reporting labor law or other violations of the law.

Protect Immigrants' Ability to Hold Employers Accountable: The hard reality is that employers like hiring undocumented immigrants because they have fewer rights under the law, especially against retaliation. To end this incentive for employers to hire undocumented workers, California (PDF) and New York have clarified that all workers, regardless of immigration status, have full protection against retaliation, since, in the words of New York's high court, lessening the labor rights of undocumented workers makes "it more financially attractive to hire undocumented aliens [and] would actually increase employment levels of undocumented aliens, not decrease it."

Holding Employers Accountable for "Fly-by-Night" Operations: Special measures are needed to target employers who evade labor laws by shifting employees into small fly-by-night subcontractors or using other means to escape formal legal responsibility. Often employees are cheated of wages but find they don't have a legal employer or that their actual legal employer has declared bankruptcy to avoid liability, even as the main company that benefited from their exploitation is immune from lawsuit.

To deal with this problem, states need to make businesses liable for wage violations by subcontractors through disclosure of all subcontractors, holding main shareholders of private companies liable for wage claims of employees when companies go bankrupt, tightening definitions of "independent contractors" so companies can't try to escape legal liability by defining their employees as independent contractors, and regulating temporary and day labor work to encourage better jobs and full-time employment.

Conclusion: None of these measures by themselves will shut down the sweatshops across the country, but a broad package of these reforms would begin the process of putting unscrupulous employers out of business and, by strengthening the rights of all workers, including immigrants, decrease the hysteria around immigration.

For more links and details on these proposals, see this extended piece at the Progressive States Network.
Read 2620 times Last modified on Thursday, 14 September 2006 03:42