NAGLO President Larry L. Roberts led a panel discussion on the hot topic of wage theft. As Kentucky’s secretary of labor, he mentioned how the Kentucky Labor Cabinet drew media attention to the issue by comparing wage theft to robbery.
What his office found was that money taken each year in Kentucky during all robberies combined fell well short of the total amount of wages improperly withheld from Kentucky’s workers. The Labor Cabinet’s wage and hour division collects an average of $4.5 million each year in wage restitution for employees, and that total far surpasses the average annual amount of $2 million taken during all robberies in the Commonwealth.
The Labor Cabinet used information from the Kentucky State Police’s annual report, Crime in Kentucky, to compare robbery totals to the latest wage restitution amounts for a three year period in Kentucky.
The number of wage theft victims far exceeds robbery victims in Kentucky. For all robberies in Kentucky, including banks, chain and convenience stores, homes, commercial offices, highway/street and miscellaneous robberies, there were 5,813 offenses combined during the last three years, for an average of 1,937 a year. For wage theft from 2011-13, there were 36,794 employees who were victims, for an average of 12,264 each year.
Christie Hammond, Oregon’s deputy commissioner of Labor and Industries, talked about how her state has created a coalition to stop wage theft. Her agency was able to obtain garnishment authority.
“What that means is if we determine there’s a wage violation, we get an order to the employer,” she said. “If the employer doesn’t pay the unpaid wages, we can garnish bank accounts or anything else.”
Ray Davenport of Virginia added that the governor of his state issued an executive order last year that brought together six state agencies to create a task force to investigate and report on the issue of worker misclassification.
He said a study found that “as a conservative estimate” misclassification cost Virginia about $28 million in tax revenue each year, and there were potentially 200,000 workers that could be affected.
Michael Moura, commissioner of the Iowa Division of Labor Services, said that whenever he speaks to a group, most of his conversation is on wage theft. His data indicated that wage theft cost Iowa approximately $45 million a year in tax revenue. He said one of the obstacles is that employees don’t know the laws.
“Workers are not even aware,” said Moura. “The employer claims something is an industry practice, and the worker goes along with it. They may fear losing their jobs or having a negative report.”