Monday, September 01, 2014

More companies engaged in employee wage theft

I found this New York Times story via the Huffington Post.  Appropriate for Labor Day:
MIRA LOMA, Calif. — Week after week, Guadalupe Rangel worked seven days straight, sometimes 11 hours a day, unloading dining room sets, trampolines, television stands and other imports from Asia that would soon be shipped to Walmart stores.

Even though he often clocked 70 hours a week at the Schneider warehouse here, he was never paid time-and-a-half overtime, he said. And now, having joined a lawsuit involving hundreds of warehouse workers, Mr. Rangel stands to receive more than $20,000 in back pay as part of a recent $21 million legal settlement with Schneider, a national trucking company.

“Sometimes I’d work 60, even 90 days in a row,” said Mr. Rangel, a soft-spoken immigrant from Mexico. “They never paid overtime.”
The lawsuit is part of a flood of recent cases — brought in California and across the nation — that accuse employers of violating minimum wage and overtime laws, erasing work hours and wrongfully taking employees’ tips. Worker advocates call these practices “wage theft,” insisting it has become far too prevalent.

Some federal and state officials agree. They assert that more companies are violating wage laws than ever before, pointing to the record number of enforcement actions they have pursued. They complain that more employers — perhaps motivated by fierce competition or a desire for higher profits — are flouting wage laws.

Many business groups counter that government officials have drummed up a flurry of wage enforcement actions, largely to score points with union allies. If anything, employers have become more scrupulous in complying with wage laws, the groups say, in response to the much publicized lawsuits about so-called off-the-clock work that were filed against Walmart and other large companies a decade ago.

Here in California, a federal appeals court ruled last week that FedEx had in effect committed wage theft by insisting that its drivers were independent contractors rather than employees. FedEx orders many drivers to work 10 hours a day, but does not pay them overtime, which is required only for employees. FedEx said it planned to appeal.

Julie Su, the state labor commissioner, recently ordered a janitorial company in Fremont to pay $332,675 in back pay and penalties to 41 workers who cleaned 17 supermarkets. She found that the company forced employees to sign blank time sheets, which it then used to record inaccurate, minimal hours of work.
David Weil, the director of the federal Labor Department’s wage and hour division, says wage theft is surging because of underlying changes in the nation’s business structure. The increased use of franchise operators, subcontractors and temp agencies leads to more employers being squeezed on costs and more cutting corners, he said. A result, he added, is that the companies on top can deny any knowledge of wage violations.

“We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,” Mr. Weil said.
There certainly is a change in the structure of work in America.  Where once, American companies would hire their own employees to perform company work and pay them wages and benefits, these same companies are now hiring independent contractors to do the same work for less pay, and are able to avoid paying health care costs and benefits.  Case in point--I worked as a subcontractor for a temporary staffing company, which was hired by a big Silicon Valley technology firm to replace computers.  This temporary staffing company paid a lower wage for the job, paid no benefits, and refused to pay over 8 hours per day, or any overtime--although the company did offer "comp time."  The question I would ask here is how many independent contractors even fully understand comp time--especially if the staffing company does not fully explain such compensation before contractor signs the contract?  And if the contractor doesn't understand the comp time and does not take it, well the staffing company just made extra money with free labor.

 The labor laws here have been diluted, weakened, and changed to the benefit of big companies--enticing them to commit such wage theft.  You have the long-term shifting of American workers from W-2 employees to 1099 contractors, the change from overtime pay to comp time, and the relentless suppression of wages.  The staffing company that I worked for replacing computers had a large number of contractors performing computer replacements, help desk support, and customer service.  I know that the Silicon Valley technology company contracts out for running their employee cafeterias and food service, security services, facilities maintenance, and possibly programming work.  Does any company hire their own employees anymore--aside from the CEO and Board of Directors?A previous Silicon Valley company that I contracted for did hire independent contractors to perform programming work.  It is all about endless cost cutting, with employee wages and compensation being a huge factor for companies bottom line--never mind about the employees' moral and benefit.  Both the big Silicon Valley firms and even small start-up businesses have done this--and I've worked in both as a contractor.  This is a trend I've been watching over the last ten years, but have not fully understood it until now.  The American worker is no longer and employee, but a small business contractor who now has to work for himself or herself.  That contractor is forced to negotiate with larger firms and staffing companies that hold all the cards and have all the resources to either offer jobs on their terms.  Here is a temp contractor job offer that requires a bachelors degree, five years experience, with specialized software training, that pays $10 per hour--and you'll be performing the work and responsibilities of what was three full-time positions that were cut last year!   Don't like that the job pays 10-20 percent less than the market rate?  There are ten more workers willing to take that job at that lower pay.  Of course, I haven't gotten into the unpaid intern positions with duties and responsibilities that should be paid positions! Have a complaint against working conditions?  You get fired and ostracized by that company--probably all the companies.  Government budget cuts on Labor Department investigations of wage thefts mean that companies can engage is such wage thefts against their own employees and contractors, and pretty much get away with it.  If such companies are caught, they get a slap on the wrist of paying for back wages--the managers and decision makers who agreed to conduct such wage theft are never thrown in jail!

The sad thing about this endless company cost-cutting, suppression of wages, transfer of employees to independent contractors, and endemic wage theft is that companies are slitting their own throats.  Because it is the employees that are also the consumers for whom these same companies need to sell their products and services.  We have had thirty years of supply-sided economic policies crammed down the American people, with stagnating wages and huge corporate profits being posted.  Are American consumers buying more products and services now?  Am I rushing out to buy more cars, clothes, appliances, and stuff on a stagnated wage that I used to be making 20 years ago--not counting for inflation?  I'm trying to avoid buying things.  We have a lack of demand in this country within the poor, working, and middle class because wages have been suppressed--companies are happy to sell luxury goods to the extreme rich and ubber-rich, who have all the money.  How long will this last?  How long will it be before nobody has any money to buy anything, and the ubber-rich have all the luxury goods they will ever want to buy?  How long will we, as workers and independent contractors, be told by the corporate-paid PR and media firms be endlessly told that we are the company's most valued asset, but then be screwed by the same companies through wage thefts, cost-cutting efforts, and forced to perform work of three jobs for a single minimum wage pay, coming from dysfunctional, narcissistic, and incompetent managers? 

How much longer will this last before everything comes crashing down?

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