Stealing wages

Stealing wages

Editorial at The Mennonite

by Everett J. J. Thomas

You shall not steal.—Exodus 20:15

Labor Day does not seem to be much about labor—unless it’s cleaning out the garage or working in the yard. But this year on Labor Day, consider the victims of wage theft. This is something I knew little about until Kim Bobo, founder of Interfaith Worker Justice, spoke at the 2012 Associated Church Press convention. She also was interviewed in the June issue of U.S. Catholic.

“Wage theft is when employers illegally don’t pay workers for all their hours or dont pay them for all their work,” Bobo said.

Here is what I learned from Bobo: The most common form of wage theft is not paying the minimum wage; the federal level is currently $7.25 an hour.

According to a large study Bobo cited, one quarter of workers earning less than $10/hour get paid less than the minimum wage.

However, the biggest form of wage theft is in not paying overtime. The same study of low-wage workers showed that of those working more than 40 hours a week, three out of four do not get paid overtime.

But there are other forms of wage theft. In order to avoid paying taxes, FICA and Social Security, some employers call their workers “independent contractors.”

This means the worker has to pay both the employer’s and the employee’s payroll taxes and has no worker’s compensation or unemployment insurance. Bobo said she’s seen dishwashers in the backs of restaurants called independent contractors.

“If you get up in the morning,” Bobo said, “… and say to yourself, ‘I’m going to work for myself,’ then you’re an independent contractor. If you get up in the morning and say, ‘I’m going to work for Mr. Smith,’ you’re an employee.”

Then there is the problem with tips: One out of 10 waiters do not get all their tips.
“If you put your tip on a credit card,” Bobo said, “you cannot be sure the worker will actually get it. We always tell people to pay their tips in cash if they don’t know for sure.”

Of course, the downside to tipping in cash is that the worker may not report the income in order to avoid paying taxes on it.

What else can we do to prevent wage theft?

If we pay attention to the way large corporations, especially, treat their employees, we can support those who treat their employees well.

For example, Costco has a history of providing excellent pay and benefits for its employees and having a good work environment. On the other hand,  Wal-Mart has a history of cheating its workers, paying low wages and offering few benefits.

Further complicating the ethics of participating in the economy is the terrible working conditions in places like China and Bangladesh. While it may seem good stewardship to spend less for clothing, for example, we can read the label to see where an item was made.

Doing so may help is imagine the child labor, unconscionably low wages and terrible working conditions demanded by the manufacturer that enable prices so low.

Labor Day may be the symbolic end of summer. But it can also be a day to reflect on the human energy expended each day to provide us the essentials of life.

It can also be a day to evaluate to what extent our participation in the economy means we are complicit in violating the eighth of the Ten Commandments.