Building an Economy that Works for Everyone

Which Costs More: Shoplifting or Wage Theft? The Answer Might Surprise You

Wage theft continues to rob workers - but Washington is stepping up

Washington workers celebrated major labor wins in 2023. Starbucks workers unionized in over 25 locations across the state. United Farm Workers in Yakima won $3.4 million in a discrimination lawsuit. Researchers at the University of Washington won fairer wages and improved working conditions. In December, they notched one more victory – one which underscores a dark truth about about our service economy and, specifically, wage theft. 

Seattle restaurateurs the Skillet Group agreed to return $318,782 in stolen wages to their employees. This payout comes after Skilled Group settled with the Seattle Office of Labor Standards (OLS) for violating both Wage Theft and Paid Sick and Safe Time ordinances.  

It’s a huge win for Skillet Group’s workers and will hopefully send a strong message to other Seattle employers.  But compared to the billions of dollars that the nation’s workers are estimated to lose due to wage theft, it’s a drop in the bucket.  

Wage theft: A crime against workers, families, and communities  

Wage theft includes everything from stolen tips, illegal paycheck deductions, forced overtime, or minimum wage violations. While some of these violations may seem small on a day-by-day basis, when added up, the impacts are massive. Stolen wages mean workers have less to provide for themselves and their families; businesses see less foot traffic and less income, and local, state and federal governments collect less revenue.   

It may surprise you to learn that wage theft, the practice of employers withholding any portion of a worker’s pay, is the most profitable form of theft in the United States.

Each year, employers steal a whopping $15 billion annually from workers across the country. Property loss through stolen wages surpasses property loss from criminal offenses by a landslide, which totals around $500 million yearly.

Put another way: The total value of property stolen through robberies, burglaries, and carjacking is not even 4% of what employers steal from workers each year.

A systemic issue: Wage theft goes beyond a few bad actors 

With numbers like these, it’s clear that violations go far beyond the action of a few bad actors. It’s also apparent that stealing wages from workers is just too easy to get away with. Lax regulation and oversight, minor penalties, unclear enforcement policies, and the knowledge that vulnerable workers rarely report due to the risk of retaliation and job loss leave too many employers emboldened to violate federal and state law.  

Just how bad is this problem? In a recent report, Making Rights Real: How the Whistleblower Enforcement Model can Address the Crisis in Labor Rights Enforcement, the Center for Popular Democracy points to low penalties and even lower rates of reporting as a key driver of rampant wage theft. Additionally, the report notes that labor law agencies are often hamstrung by chronic understaffing and underfunding, rarely able to hold violators accountable or keep pace with the growing scale of violations.

As a result, wage theft and workplace violations are chronically underreported, and bad actors are rarely held accountable. 

WIthouth whistleblower protections, workers lose 

The federal government has enacted a patchwork of laws to help workers help themselves. Unfortunately, the enforcement is often lacking. While workers can potentially take action against wage theft by filing reports through the Occupational Health and Safety Advisory (OSHA), they’re rarely guaranteed that it’ll end well.

As the National Employment Law Project (NELP) notes in their 2019 report on wage theft in the United States, “under our current system, workers bear the entire risk of retaliation from their employer when they report violations.”

“When workers experience retaliation for trying to protect their rights, the costs can quickly escalate from both a financial and emotional standpoint, especially for the countless workers nationwide who live paycheck to paycheck,” the report explains. “A worker may experience lost pay…which can quickly lead to missed payments, lower credit scores, eviction, repossession of a car…and more.”

As a result, many workers are too afraid to file complaints when their bosses make them clock out early but remain at work, or when they insist on “tip-pooling” that serves only to line a salaried manager’s pocket.

A work in progress for workers

Some cities, counties, and states – including Seattle and Washington – have taken additional steps to shield workers from retaliation. However, these laws frequently require additional work after passage. 

Seattle’s first wage left policy wasn’t an overnight success. It failed to bring even a single employer to account. Undaunted, workers and advocates continued to protest and lobby to ensure the law was in line with the real needs of people in the service industry. 

Finally, after years of updates and debate in City Hall, restaurant employees, organized labor, policymakers, and advocates finally passed the bill that helped lay the groundwork for Skillet workers and their triumphant win. 

The new policy, which went into effect in 2015, also created the Office of Labor Standards, which opened in 2015, and paved a pathway for future private action.

Winning stronger workplace protections for Washington 

Since then, Washington has continued to build on these wins. In 2019, Attorney General Bob Ferguson backed a bill that increased the penalty for wage theft for the first time since the 1980s.  And in 2021, our partners at the Washington State Labor Council successfully fought for the Worker Protection Act, a state-wide enforcement policy.

As a result, workers across Washington can now get the help they need if their rights have been violated.  

EOI and the Washington Work and Family Coalition have been fighting for worker protections like these for nearly two decades. We’ve successfully worked on policies like Paid Sick and Safe Time, improvements to overtime standards and protections, and more.

But our work isn’t done. This session, we are continuing the fight for worker rights and protections by advocating for an expansion of our state Paid Sick and Safe Time law to make this benefit equitable for all families.

To learn more about the Paid Sick and Safe time improvements and other worker protection we’ll be fighting for this session visit our legislative agenda 

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