Stolen Wages: background reading

"Our wage theft epidemic" Spencer Woodman for Salon.com, February 20, 2013 

Even as the ranks of low-wage workers have swelled since the recession, Democratic and Republican legislatures in more than a dozen states have quietly slashed funding for the agencies that enforce minimum wage law. Budget cuts are no surprise in an era of austerity. Yet the effect of these cuts on wage-and-hour investigative units—charged with examining and settling wage disputes—has seriously compromised an essential line of defense for already vulnerable low-wage earners, according to experts. State labor officials and researchers around the country tellIn These Times that low-wage workers facing abusive employers increasingly have nowhere to turn.

The victims of nonpayment of owed wages—referred to as “wage theft”—are most frequently workers at the bottom of the income scale. The U.S. Department of Labor, which significantly expanded its investigative force under former Labor Secretary Hilda Solis, can take wage theft cases, but it is less familiar with local particulars and is prohibited from investigating many employers covered by state laws. Most private attorneys are unwilling to take wage theft cases, since they involve comparatively small sums of money.

"David’s Cafe again in the midst of a legal battle over unpaid wages", Brenda Medina, February 1, 2013

The popular David’s Cafe restaurant in Miami Beach is under federal investigation again for allegedly not paying some of its employees.

“Oh, yes. There is a very active investigation going on,” Will Garnitz, regional supervisor of the Department of Labor, said Friday. He declined to release further details on the investigation.

Also Friday, 19 former workers filed a lawsuit against the restaurant’s owners.

“They have been able to get away with it because they keep saying that their corporation is bankrupt so they can’t afford to pay what they owe the workers,” said the group’s attorney Noah Warman. “But under the federal law (Fair Labor Standards Act), they themselves are liable for the abuse and for paying their workers with checks that bounce.”

[...]

David’s Cafe has been the target of several protests by former employees who claim they are owed more than $70,000 for months of work without pay. The group consists of former workers at David’s Cafe at 1058 Collins Ave. and David’s Cafe II, which closed in 2012, when its owners claimed they could no longer afford to pay rent.

"Workers Sue Major Restaurant Chain for Wage Theft", Curt Anderson for The Associated Press, September 6, 2012 (via Equal Voice)

Darden Restaurants Inc. violated federal labor laws by underpaying thousands of servers across the country at Olive Garden, LongHorn Steakhouse, Red Lobster and other eateries, according to a lawsuit filed Thursday on behalf of the workers.

The lawsuit filed in Miami federal court seeks to collectively represent current and past employees who worked for Darden from August 2009 to the present. It seeks potentially tens of millions of dollars in back pay and other compensation, plus interest and attorney fees, said lead lawyer David Lichter.

[...]

Darden spokesman Rich Jeffers said the allegations “fly in the face of our values and how we operate our business.”

[...]

The Orlando-based company’s website said it has more than 2,000 restaurants in North America that employ about 180,000 people. Darden does not franchise its restaurants.

The Department of Labor has found violations similar to those claimed in the lawsuit in several individual investigations, including a 2011 probe in which the company agreed to pay more than $25,000 in back wages to Olive Garden workers in Mesquite, Texas. Darden was also assessed a $30,800 fine in that case.

"Fast Food Strikes Go Viral: Workers Expected to Protest Low Wages in 35 Cities Thursday", Victor Luckerson for Time, August 27, 2013

Low-wage workers at fast food restaurants like McDonald’s and retailers such as Macy’s are gearing up for a nationwide strike just before Labor Day weekend. The striking workers are demanding the right to unionize and at least $15 an hour in pay, more than double the current national minimum wage of $7.25. Organizers say Thursday’s strikes could touch as many as 35 cities.

“These companies that own these fast food restaurants, they make way too much money off the backs of the employees,” says Dearius Merritt, a 24-year-old worker at Church’s Chicken in Memphis who earns $13 an hour and plans to take part in his first strike Thursday. “I’m in the store every day with these workers that make $7.25…If I’m 30 years old and this is what I have to do to survive, then I deserve a living wage off of it.”

The rumblings against the long-standing economics of fast food began last November in New York, when about 200 restaurant workers went on strike in a one-day protest. By July the movement had ballooned to include thousands of workers across seven other cities, including Chicago, Detroit, and Kansas City. Now, with workers in places like Los Angeles, Memphis, and Raleigh getting involved—with extensive financial backing from the Service Employees International Union—organizers and labor experts expect this week’s strike to dwarf previous protests.

"Minimum Wage For Restaurant Servers Remains Stagnant For 20 Years Under Industry Lobbying", Dave Jamieson for The Huffington Post, June 2, 2012 

The federal government raised the minimum wage to $7.25 per hour in 2009. Some states have raised theirs above that amount, to as much as $9.04, in Washington state.

But since 1966, a sub-section of the minimum wage has existed for people who work for gratuities, known as the "tipped minimum wage," which Congress last bumped to $2.13 per hour in 1991. Some states have increased the tipped minimum wage on their own as well -- and Washington, like six other states, has no tipped minimum wage at all, so servers earn a full $9.04 before gratuities. About half of all states, however, continue to allow restaurants to pay servers $2.13, provided they make up the difference if the server doesn't reach the standard minimum wage after tips.

The cost of living, meanwhile, has continued to climb.

Further Reading:

Minimum Wages for Tipped Employees, by State, U.S. Department of Labor