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A North Babylon demolition company manager was sentenced for failing to pay $80K in prevailing wages to workers on public projects in Nassau County
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Adina Genn
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An effort to cheapen labor costs has resurfaced in the Florida Legislature after failing to gain the traction it needed in order to pass earlier this year.
Florida Republican Ryan Chamberlin, R-Belleview, on Friday refiled a bill (HB 221) that would allow employers to legally pay certain types of workers less than the state minimum wage of $14 an hour if the worker themselves signed a waiver opting out.
Under the proposal, to be considered during the 2026 state legislative session that begins in January, workers would be able to voluntarily accept pay below the minimum wage when employed in “work-study, internship, preapprenticeship, or other similar work-based learning opportunity.”
A similar proposal (HB 541) was filed by Chamberlin for consideration by the Republican-controlled Florida Legislature during the 2025 session, but failed to pass. Florida Senate leader Ben Albritton previously told reporters about the proposal, at the tail end of this year’s session, “I don’t love it, to tell you the truth.”
Florida’s minimum wage currently sits at $14 an hour for most employees — one of the highest minimum wage rates in the U.S. South — and is $10.98 for tipped workers. Under a constitutional amendment approved by Florida voters in 2020, Florida’s minimum wage is set to increase to $15 next September and rise with inflation after that. The federal minimum wage, last adjusted in 2009, still sits at a measly $7.25 per hour.
“The minimum wage in Florida as currently codified in our state constitution has become a weight on Florida’s economy and a hindrance to workers seeking to improve their personal finances,” Rep. Chamberlin said in a statement explaining his bill. “Wage controls are always enacted with good intentions but lead to a decrease in opportunities. We must seek alternative options like career development and continued education to ensure workers are receiving the skills needed to compete in today’s economy.”
Chamberlin’s 2025 proposal earned harsh rebuke earlier this year from organized labor, faith leaders and student activists, with critics arguing the bill would lead to opportunities for exploitation.
“It opens up the doors for businesses to exploit its workers, especially young people [and] low-income families, by unknowingly waiving their right to a fair wage,” argued Satin Fye, a “proud unionist” from Miami-Dade County, speaking to a Florida House committee back in April. “This bill is anti-worker, it is anti-family and it is anti-Florida,” she said.
Critics also argued that, if the proposal passed, employers would simply redefine entry-level jobs as “internships” in order to circumvent minimum wage requirements and pay more workers less. Current federal and state law already allows employers to pay certain workers less than minimum wage, including some workers with disabilities and youth workers for the first 90 days of employment. Independent contractors and freelancers are also not guaranteed a minimum wage under federal or state law.
“There are already multiple avenues under federal law that allow for lower minimum wages for student learners and apprentices,” Nina Mast, an economic analyst for the Economic Policy Institute, previously told Orlando Weekly. “But this Florida bill really massively expands those classifications,” she said, speaking of Chamberlin’s earlier bill.
“I think that the concern is that it creates an opportunity for exploitation and to essentially find a rationale to pay basically anyone the lower minimum wage by characterizing your work as work-based learning,” Mast added.
As of publication, no Senate version of Chamberlin’s bill has yet been filed for consideration during the 2026 session. In the 2025 legislative session, Republican Sen. Jonathan Martin sponsored the minimum wage proposal (SB 676) in the Florida Senate. Both chambers must approve of the proposal in order for the legislation to pass and head to the governor’s office for final approval.
Chamberlin’s bill, as filed for the 2026 session, does include certain guardrails. It would require that employers pay all eligible workers at least the federal minimum wage. It would also make an employee’s waiver to opt out of the state minimum wage valid for up to nine months only. After that, “the employee must be paid at or above the state minimum wage regardless of his or her position or job title with the employer,” the bill reads.
As Orlando Weekly has reported, Florida has a weak mechanism for actually enforcing the state minimum wage, and for holding employers accountable when or if they pay their employees less. A proposed amendment to Chamberlin’s 2025 bill filed by Orlando’s state Rep. Anna Eskamani sought to establish a stronger enforcement mechanism for Florida workers cheated of pay. That proposal, however, was rejected by her Republican colleagues earlier this year.
Florida’s 2026 legislative session, meanwhile, is scheduled to convene on Tuesday, Jan. 13, 2026 and last 60 days.
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‘I don’t love it, to tell you the truth,’ Florida Senate president Ben Albritton told reporters
The proposal would in part erase local living wage laws in cities like Orlando, Tampa and Miami
Florida will see its minimum wage rise to $14 per hour on Sept. 30, thanks to a ballot initiative approved by Florida voters in 2020.
And yet, the state has no state agency or division authorized to actually enforce Florida’s wage laws — meaning, if a worker believes their boss is failing to pay them all of what they’re owed, or is stealing their tips, they have very few options for recourse.
Since 2005, the year Florida voters first established a state minimum wage in the first place, just one state official has had the authority to hold employers accountable for ensuring workers are paid at least minimum wage: Florida’s Attorney General.
Under Florida statutes, the state Attorney General has the power to impose a fine of $1,000 per violation, payable to the state, for any employer found to have willfully violated minimum wage requirements.
As Orlando Weekly has reported before, however, there is no evidence that the Attorney General’s office has ever done this in the 20 years they’ve had the authority to do so. A report from the Economic Policy Institute found that Florida has the highest minimum wage violation rate of the 10 most populous states in the country, and research indicates that as the minimum wage goes up, so too do employer violations.
An analysis by the Florida Policy Institute and Rutgers University’s Center for Innovation in Worker Organization found that, after Florida’s minimum wage increased in 2005, the state’s minimum wage violation rate more than doubled to 17 percent by the end of 2007, disproportionately affecting workers in agriculture, real estate and the service industry.
Establishing a strong enforcement mechanism for catching minimum wage violations, and holding violators accountable for cheating workers of their hard-earned wages, however, hasn’t been a priority of the state Attorney General’s Office. The office, currently led by Gov. Ron DeSantis’ ally James Uthmeier, doesn’t even mention on its website that it is the only state agency that is able to do so.
Jose Javier Rodriguez, a workers’ rights lawyer and former Democratic state senator who’s running in 2026 to replace Uthmeier, wants to change that.
“For decades, the Attorney General’s Office has functioned to prop up the powerful and corrupt and not to look out for the people,” Rodriguez told Orlando Weekly in an interview. “State attorneys general routinely enforce state labor laws, including state minimum wages, routinely bringing actions on behalf of defrauded workers — except in Florida,” he said.
According to the Workplace Justice Lab at Rutgers and Northwestern University, U.S. workers lose tens of billions of dollars each year from being paid less than their state’s minimum wage. And Florida, a state with a workforce of more than 11 million, including roughly 1 million workers earning minimum wage, is uniquely vulnerable.
Former Gov. Jeb Bush dismantled Florida’s state department of labor more than 20 years ago, abolishing the only state agency tasked with enforcing the state’s wage and hour laws. No replacement for the former state agency has been established in Florida since, despite repeated efforts by Democratic state lawmakers who are in the minority in the Florida Legislature.
“The minimum wage has largely been unenforced for, really, as long as Florida’s had a minimum wage,” Alexis Tsoukalas, a policy analyst for the Florida Policy Institute who’s co-authored reports on the issue, previously told Orlando Weekly.
Indeed, the Nation reported back in 2016 that then-state AG Pam Bondi — currently serving as U.S. Attorney General under President Donald Trump — took no action to hold employers responsible for violating the minimum wage in Florida for years. Records obtained by the Weekly show her successor Ashley Moody didn’t do much to hold employers responsible for this either.
In 2023, for instance, her office helped just one person — a Hungry Howie’s pizza delivery driver — recover about $500 after the assistant attorney general from Moody’s office sent an ominous warning to his employer. Still, the office didn’t take any official enforcement action to get the spooked employer to pay up. Nor did his employer, a franchisee in Hudson, face any penalty for violating Florida’s minimum wage law in the first place.
“I recommend that you make private efforts to remedy any other employees whose wages were similarly underpaid to avoid further complaints being levied against you,” then-Assistant Attorney General Rebecca Snyder wrote in an email to the Hungry Howie’s franchisee, obtained by Orlando Weekly through a public records request.
“The minimum wage has largely been unenforced for, really, as long as Florida’s had a minimum wage”
Alex Tsoukalas, Florida Policy Institute
It’s unclear whether Florida’s current AG, Uthmeier, has a firm position on the issue himself. Uthmeier, a 37 year-old Republican who formerly served as DeSantis’ chief of staff, was appointed by DeSantis to become Attorney General in February to fill a vacancy left by Moody, who was similarly appointed to fill former Sen. Marco Rubio’s seat in the U.S. Senate.
Orlando Weekly requested records from the state Attorney General’s Office in June, under Uthmeier’s leadership, asking for minimum wage complaints their office has received over the last year and any actions they’ve taken to address them. Despite an initial acknowledgement of our request, and multiple follow-ups, the office has failed to produce any records responsive to our request as yet.
As Rodriguez pointed out in our interview, it’s not unusual for state attorneys general and other state officials elsewhere to take on the responsibility of cracking down on wage theft.
In Rhode Island, a state with a workforce roughly 20 times smaller than Florida’s, the Attorney General’s Office received more than 300 “actionable” cases of wage theft last year, and recovered nearly $1 million in owed wages. The small, Democratic-led northeastern state actually has its own state labor department, unlike Florida, and recently moved to make willfully committing wage theft a felony offense, up from a misdemeanor.
Over a two-year period, Massachusetts’ Attorney General secured over $2.8 million in back pay for more than 3,000 workers in the construction industry alone, in addition to $1.7 million in penalties from employers, payable to the state.
New York State Attorney Letitia James has similarly taken an aggressive approach to the issue — for instance, reaching a $16.75 million settlement with DoorDash for wage theft earlier this year. She’s also recovered unpaid wages and tips for nail salon workers, bar employees, and Uber and Lyft drivers, among others.
The state of New Jersey — albeit, independently of its Attorney General’s office — even has a digital wall of shame (“Workplace Accountability in Labor List”) for employers who commit wage theft and other violations.
The idea that employers can illegally cheat workers of their lawfully earned wages in Florida without facing repercussions is a thought that is especially troubling, with Florida’s minimum wage set to go up at the end of the month.
Under a ballot initiative approved by nearly 61 percent of Florida voters in 2020, Florida’s minimum wage is on a gradual path to reach $15 next Sept. 30. It’s currently $13 for non-tipped workers, and $9.98 for workers who earn tips. On Sept. 30, 2025, that minimum hourly rate will rise to $14.
State Attorney General candidate Rodriguez, who most recently served as U.S. Assistant Secretary of Labor under President Joe Biden, is keenly aware of the lack of attention in Florida to the issue of wage theft. A longtime employment lawyer, Rodriguez joined other worker advocates roughly 20 years ago as they sought transparency on minimum wage enforcement from then-Florida AG Pam Bondi.
“Quite frankly, it sucks.”
Morgan & Morgan attorney Ryan Morgan
“The attorney general’s office is simply not enforcing the minimum wage in the way that other states do,” Rodriguez told ABC News affiliate WTXL in 2015. “We basically have it in the constitution and we have it in the books, but as far as any state enforcement … that is it.”
Floridians first voted to establish a state minimum wage, separate from the federal minimum wage, in 2004. At the time, the federal minimum wage was $5.15 an hour.
Although federal investigators in the U.S. Department of Labor’s Wage and Hour Division are authorized to investigate complaints of wage theft in Florida (including but not limited to minimum wage violations), they are only authorized to recover wages up to the federal minimum wage — which currently sits at just $7.25 an hour.
Plus, the federal Wage and Hour Division is understaffed and overburdened. As of May, the division had fewer than half the number of investigators it had at its peak in 1978, according to a recent analysis, despite the fact that it’s today tasked with protecting the rights of three times as many workers.
In the absence of help from the state government in combating wage theft, some community organizations — including the Farmworker Association of Florida — have stepped up to help fill gaps. In addition, at least a half-dozen local municipalities in Florida, including Osceola County, have established their own local wage theft programs.
The Farmworker Association of Florida works with the U.S. Department of Labor to help victims of wage theft recover pay they are lawfully owed.
Rodriguez was part of the effort to create Florida’s first local wage recovery program in Miami-Dade County back in 2010, as part of a coalition of groups in the aftermath of the 2008 financial crisis. In just the first year alone, the program resulted in more than 600 prosecutions and $1.7 million recovered in stolen pay, the New York Times reported at the time.
“The county didn’t have a big budget,” Rodriguez recalled. “So the design that I came up with for these groups was sort of based on almost like code enforcement, right? It’s a self-enforcement thing. You get a hearing officer, you get an order that then can be turned into a court order, but you don’t need a lawyer. What you get is you get an opportunity to come in and prove your case in front of a hearing examiner, and then you can go ahead and enforce it,” he explained.
Since employment lawyers have a low acceptance rate for wage theft cases as it is — especially instances of wage theft that only involve a few hundred or thousand dollars — the importance of having an alternative program is important.
“Our acceptance rates on the wage and hour cases are below 10 percent,” Morgan & Morgan attorney Ryan Morgan previously told Orlando Weekly, adding that this is in line with acceptance rates of other firms.
“Even we just don’t have enough manpower and hours of the day to handle every case. And so when you’re looking at it, you do have to make difficult choices at times,” Morgan added. “And quite frankly, it sucks.”
Florida’s Attorney General is an elected official who serves as the state’s chief legal officer, responsible for protecting Floridians from fraud, enforcing antitrust laws, defending the state in civil litigation cases, and going after criminal activity such as drug trafficking and identity theft.
The AG is typically elected by Florida voters every four years. Uthmeier, a Republican, was appointed by DeSantis to fill the remainder of former AG Moody’s term earlier this year following her own appointment to the U.S. Senate. His current term ends in January 2027.
Rodriguez, based in the Miami area, faces an uphill battle to defeat Uthmeier. As the incumbent — who routinely finds himself in headlines for his enforcement of the state’s harsh immigration policies — Uthmeier has name recognition. He’s a Republican, backed by his party in a state where the GOP currently has a more than 1 million edge over Democrats in voter registration.
Rodriguez, who’s running on an anti-corruption platform, was first elected to the Florida House in 2012 before running for the state Senate in 2016, where he served for four years. Rodriguez in 2020 narrowly lost his bid for re-election to the Florida Senate by just 40 votes to Republican Sen. Ileana Garcia, after corporate interests reportedly paid a “ghost” candidate with the same last name as his to run as a no-party candidate against him.
“It came out that [Florida Power & Light] was the funder of that, and the reason why they were so upset with me is because there was nobody else in state government standing up for their customers and against them than me,” said Rodriguez, who had filed legislation in 2019 that FPL opposed. “They wanted to take me out,” he continued. “And I think that, you know, if voters want any proof that they’re going to have a fighter in the Attorney General’s office, I think that’s it.”
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‘Alligator Alcatraz’ and ‘Deportation Depot’ are Florida’s two main detention centers working in conjunction with ICE
‘So, you know, not all the studies find that, but some of the studies do,’ Florida Surgeon General Ladapo said
The announcement came shortly after the Miami Dade College’s Board of Trustees approved the transfer of property
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The CEO of a Chantilly-based government contractor will pay $1 million in restitution after pleading guilty in Fairfax County’s largest-ever wage theft case.
The CEO of a Chantilly-based government contractor will pay over $1 million in restitution to eight former employees after pleading guilty in Fairfax County, Virginia’s largest-ever wage theft case, Commonwealth’s Attorney Steve Descano said Monday.
Thomas Burns was the CEO of SP Global, which specialized in technology implementation. Starting in October 2020, the company stopped paying its 40-plus workers.
According to a news release from Descano’s office, Burns and other executives promised for months that payment and backpay was coming, saying there were issues with international banking regulations and travel restrictions caused by the pandemic.
Employees worked without pay for months, consoled by those promises, Descano said, before eventually quitting without ever being compensated.
The company defrauded 42 workers of more than $5 million, Descano said. Eight workers chose to be included in the county’s restitution agreement totaling $1,070,429.21, while the other 34 chose to proceed with a lawsuit, which is pending.
“Stealing is stealing, and financial crimes can be just as devastating for victims’ families — those who don’t get paid can miss rent or mortgage payments, putting their safety and security at risk,” Descano said in a news release.
Burns was also sentenced to four years in prison, with one year suspended. He pleaded guilty to two counts of wage theft of more than $10,000 and one county of conspiracy to commit wage theft.
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Thomas Robertson
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A group of elected officials, labor leaders and construction workers held another press conference at a Long Island school Tuesday, extending their campaign to urge passage of a bill requiring project labor agreements in public school construction projects.
The event, held at Norman J. Levy Lakeside School, was aimed at condemning corruption in construction projects at Merrick School District and other public school districts across Long Island. The Merrick district is one of more than a dozen Long Island public school districts where contractors have recently been prosecuted for nonpayment of taxes and exploiting workers, according to a statement from the group.
Speakers at the press conference highlighted two contractors who were prosecuted this year by the Nassau County District Attorney’s office, and a third contractor who submitted fraudulent certified payrolls to the Merrick School District that went undetected.
Last month, the same group of officials held a press conference at Uniondale High School and mentioned the indictment of Bronx-based masonry contractor, who was arrested in July and charged in a 14-count complaint with failing to pay years of employee payroll taxes, scheming to defraud a construction contractor of millions of dollars, and aggravated identify theft.
Participants at the press conference said that Long Island school districts have awarded multi-million-dollar projects funded by state taxpayers to contractors who have been found guilty of wire fraud, wage theft, failed to secure New York-based insurance and workers’ compensation, and even refused to hire local workers. They said the crimes and lack of oversight have cost taxpayers millions of dollars and robbed workers of hundreds of thousands of dollars.
At both press events, officials called for passage of the Stop Worker Exploitation in Public Education Act, bipartisan state legislation to create a project labor agreement (PLA) between Long Island public school districts and local building trades unions to ensure construction projects are awarded to responsible, New York-based contractors that employ local workers.
Organizations and individuals involved in Tuesday’s press conference included: the Building and Construction Trades Council of Nassau & Suffolk Counties; Mason Tenders’ District Council of New York and Long Island; Long Island Federation of Labor; New York State Senators Mario Mattera, Monica Martinez, and Jack Martins; New York State Assembly Members Judy Griffin, Mike Durso, Chuck Lavine, Ed Ra, Michaelle Solages; construction workers and victims of wage theft.
“New York’s public education system is meant to strengthen our workforce, not weaken it through unfair construction practices. As we’ve seen here in Merrick and across Long Island, without reform, taxpayers can end up subsidizing contractors who exploit workers and cut corners,” Martinez, lead co-sponsor of the Stop Worker Exploitation in Public Education Act, said in a written statement. “The Stop Worker Exploitation in Public Education Act will change that by protecting workers, saving taxpayer money, and keeping students and staff safe during and after construction. Passing this legislation means safer schools, stronger local jobs, and greater respect for taxpayers.”
Martins added that PLAs provide school districts with the certainty they need when planning construction, including protection from unexpected surprises that can derail a project.
“They also ensure that good-paying jobs go to hard-working New Yorkers and don’t go out of state,” Martins said. “At a time when many families are struggling with affordability across our state, supporting our local workforce has never been more important. This is a win-win.”
Solages, who co-sponsored the measure in the State Assembly, said: “When contractors cheat workers, they cheat the entire community. Misclassifying labor and misappropriating public funds robs our students, our schools, and our local economy. That is why the Long Island delegation is pushing for project labor agreements for school districts to ensure every tax dollar builds quality schools and supports fair, lawful employment.”
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David Winzelberg
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THE BLUEPRINT:
Over $99,000 in wages was unlawfully withheld from five employees, officials say.
Misclassification led to workers being severely underpaid on a Longwood school project.
Company is banned from NY public works for 5 years as part of the plea deal.
A contractor pleaded guilty Monday in Suffolk County District Court to a felony charge of willfully failing to pay prevailing wages and supplemental benefits, along with a related offense. The charges stem from a public works project in which more than $99,000 was unlawfully withheld from employees, officials said.
Geraldo DeAlmeida, of South River, NJ, and his corporation, R&L Concrete, pleaded guilty to the charges, Suffolk County District Attorney Raymond Tierney said.
DeAlmeida and his company served as subcontractors on a project from November 25, 2019, to April 10, 2020, involving the construction of an administrative building in the Longwood Central School District, whose administrative offices are in Middle Island.
“This conviction reaffirms my commitment to protecting workers’ rights by combatting wage theft,” Tierney said in a news release about the guilty plea.
“It speaks to our dedication to the fight against anyone who would fraudulently and illegally fail to pay employees for their honest labor in Suffolk County,” he added.
Officials say that the public works contract required DeAlmeida, operating through R&L Concrete, to accurately list and classify the employees on certified payrolls and to pay them the legally mandated prevailing wage and supplemental benefits. Instead, officials allege that DeAlmeida willfully misclassified employees under lower-paying job titles to avoid paying the appropriate rates. As a result, several workers who were entitled to wages ranging from $68 to $198 per hour were paid only $22 to $25 per hour.
According to officials, DeAlmeida omitted one employee entirely from the certified payrolls, in direct violation of New York State Labor Laws.
Officials said Monday that as part of the plea agreement, DeAlmeida and his company must pay $99,671 in withheld wages to five employees. Because of the felony plea, R&L Concrete is barred by the New York State Department of Labor from participating in any public works projects in the state for the next five years.
DeAlmeida and R&L Concrete were also involved in a separate but related settlement with the New York State Department of Labor concerning the same project. As part of that agreement, they admitted to a willful violation for underpaying employees and agreed to provide additional restitution to the affected workers.
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Adina Genn
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Denver city officials for the first time issued subpoenas in an attempt to recover wages for dancers at a trio of strip clubs.
Denver City Council in April voted unanimously to give Denver Labor subpoena power to use during wage-theft investigations.
“It’s a win for Denver’s workers that we had this process in place in time,” Denver Auditor Timothy M. O’Brien said in a Tuesday news release. “This is the first time we are using this subpoena power and without it we would be unable to conduct our investigation into whether dancers’ rights are being violated.”
City labor investigators have been working to determine whether PT’s Showclub, Diamond Cabaret and PT’s Centerfold misclassify their dancers as non-employees to avoid paying them minimum wage, overtime, paid sick leave and all of their earned tips.
The city issued subpoenas for these clubs after the businesses failed to produce records related to contracts, contact information and dancers’ payments, the news release stated.
The strip clubs have until Sept. 24 to fully respond. If they don’t, they will face fines of up to $1,000 per day.
The investigation, city officials said, remains ongoing.
The new subpoena power comes amid years of effort at the city and state level to crack down on wage theft and misclassification.
Before the April ordinance, the Denver auditor’s office could only issue fines to companies that did not hand over requested documents in wage theft investigations. Businesses could pay the fines rather than comply with the investigation.
The law change also empowered the auditor’s office to charge 12% interest on unpaid wages as well as to levy fines up to $25,000 per violation. Denver Labor can collect up to 300% of unpaid wages as civil damages to compensate workers.
In 2023, Denver recovered more than $2 million in unpaid wages — nearly double the amount recovered the year prior.
“Wage theft is devastating,” Councilmember Sarah Parady, one of the bill sponsors, said in April. “What we need is for our enforcement agency to be empowered to get whatever information is needed to get to the truth.”
Another ordinance, passed by the City Council in 2023, allowed complaints to go straight to the auditor, as opposed to the court, helping people to get paid faster.
The law also provides for upstream liability — meaning a general contractor on a construction project would be liable for wages and penalties if their subcontractor fails to pay its employees.
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Originally Published:
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Sam Tabachnik
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Los Angeles County prosecutors charged the owners of a popular old-school Catalina Island diner and pizza restaurant with withholding over a half a million dollars in wages from their employees and expecting them to work 18-hour days.
The Los Angeles County district attorney’s office announced Thursday it had charged Jack Arthur Tucey, 80, and Yueh Mei Tucey, 75, with felony grand labor and wage theft, among other charges. The Tuceys, a married couple who run three restaurants and a hotel in Avalon, face a maximum sentence of 22 years in prison if convicted, according to prosecutors.
The district attorney’s office said the couple would have their workers rotate around their Avalon businesses, regularly working 12-hour days or longer. For the overtime, Dist. Atty. George Gascón said employees would be paid only minimum wage — a violation of California law requiring that workers earn above their hourly rates when they work days longer than eight hours.
Prosecutors also accused the couple of filing fraudulent statements with the state’s Employment Development Department, concealing the real wages they were paying to their workers.
“What you will see in this case is individuals that for years have been operating in Catalina Island exploiting many workers,” Gascón said at a news conference Thursday.
Gascón said the office has identified 18 workers who were victims of wage theft, many of them immigrants who were living on the couple’s property. He said he believed additional workers would soon come forward.
The Tuceys were arrested Thursday, according to the district attorney’s office, and could not be reached for comment.
Since 2001, the couple have owned multiple businesses across the tourist town, according to prosecutors, who said they now own a hotel and three restaurants: Original Jack’s Country Kitchen, Mrs. T’s Chinese Kitchen and Avalon Bake Shop and Original Antonio’s Pizzeria and Deli.
Lilia García-Brower, the California labor commissioner, said her team’s investigation into the owners began in 2017 and determined that everyone from busboys to maintenance workers had been systemically underpaid, with some forced to clock out prematurely in the payroll system to avoid their overtime hours getting documented.
If they left the job, she said, they faced eviction, which deterred employees from confronting the owners.
“Many of these employees were also living in the properties owned by these defendants, which placed them in a particularly vulnerable situation,” García-Brower said. “All the workers lived on Catalina Island, they were geographically isolated and feared being blacklisted if speaking up.”
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She said last month her team conducted an audit of wages paid to the 18 workers interviewed and found they were owed more than $1 million in unpaid wages from 2008 to 2022.
Court records show Jack Tucey had been sued twice over failure to pay wages. In July 2016, his handyman, Francisco Rodriguez, alleged he’d often worked six days a week but was never paid an overtime rate. In January 2021, two employees of Original Jack’s Country Kitchen — Lin Mei Qian and Xiv Peng Sonog — sued the couple, alleging they had never received overtime pay or the meal periods they were entitled to under California law.
It’s the second case to come out of the district attorney’s Labor Justice Unit, formed in September to prosecute wage theft cases. That month, the office filed charges against owners of two garment businesses in South Los Angeles, who allegedly paid workers as little as $6 an hour.
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Rebecca Ellis
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This is an updated version of a story first published on Jan. 24, 2023.
If someone steals money from their employer, they could be guilty of a serious crime. But what if an employer takes money from their employee’s paychecks?
There’s a good chance they’ll get away with it, a CBS News investigation found.
Whether it’s paying less than minimum wage, withholding tips or pressuring staff to work off the clock, so-called wage theft siphons billions from Americans’ paychecks. Through extensive data analysis and interviews with local, state and federal officials, along with victims of wage theft across the country, CBS News found the systems designed to protect those workers often fail.
CBS found that even when they win their cases, inconsistent enforcement and a patchwork of local, state and federal regulations means many victims are never paid a dime, while others are left waiting months or even years for a resolution.
Asael Espinosa spent many nights for the last 10 years on the road, delivering pizzas so people in his Chicago neighborhood can put food on their tables. But he’s struggled to put food on his own family’s table.
Instead of earning an hourly wage, Espinosa makes just $4 for every order he delivers. That means on slow nights without an order, he isn’t paid a dime.
CBS News rode with Espinosa in late November as he made his deliveries.
“In the course of almost an hour, I have only made two deliveries,” Espinosa said. “That’s $8. So, if you think about it, I may not even be earning minimum wage.”
As the sole breadwinner in the family, Espinosa has struggled financially.
“We only have two children and the youngest is in high school and the other is going to school,” he said. “Everything I do, I do for them. I want them to have a better future.”
Espinosa says with only a $4 per delivery pay structure, he relies on tips to fill the gap. But those tips are unreliable, and sometimes he comes up short.
With the assistance of Arise Chicago — a local nonprofit that helps wage theft victims — Espinosa filed a lawsuit in late 2022 to recover some of the money he says he’s owed.
In response to their suit, Espinosa’s employer, Naty’s Pizza, filed a motion to dismiss the case, claiming in part that he and other employees were independent contractors who also drove for gig delivery services such as Uber Eats. The motion also claimed Espinosa was allowed to set his own hours and could refuse a delivery if he wished.
Espinosa’s attorneys and the team at Arise Chicago disagree. They said Naty’s incorrectly classified Espinosa and other delivery drivers as independent contractors yet treated them as hourly employees — a form of wage theft.
In their response filed in court in early January, Espinosa’s attorneys said he’d “never worked for any app-based business including Lyft, Uber, or Uber Eats,” and say that, despite classifying him as an independent contractor, Naty’s required him to work a regular schedule and do “side work” such as cleaning bathrooms, stocking shelves and taking out trash — all unpaid.
“They’re showing up for a certain shift,” said Jose Uribe, workplace justice campaigns organizer at Arise Chicago. “They’re only doing deliveries for that pizzeria. They’re not independently incorporated or running their own businesses. They’re not coming and going freely. So, what you’ll see is that delivery drivers will queue in line and sit at the restaurant waiting for these deliveries. And all that time they are sitting there is unpaid time, but they’re required to be there standing by, waiting for orders to come in.”
An attorney for the owner of Naty’s declined to comment other than to refer to the motion to dismiss. The judge in the case ruled in favor of Naty’s. The workers and their lawyers are appealing and at the same time pursuing a settlement with the employer.
In late June, U.S. Senators Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio, both Democrats, sent letters to nearly two dozen companies that they say appear to have stolen wages from low-wage workers by not paying overtime and misclassifying their job descriptions as “managers.” Many of those companies, among the nation’s most recognized fast food and service companies, were named in a report from the National Bureau of Economic Research as having the highest proportion of positions used to strategically avoid paying workers overtime.
Wage theft can take many forms: paying less than minimum wage, not paying overtime, not giving tips to workers who are supposed to receive them, or misclassifying workers as independent contractors while treating them like hourly employees.
That’s part of why wage theft is so “systemic,” said Shelly Rusicka, Arise Chicago’s development director.
“It’s not a one-time purse snatching or one-time home robbery,” Rusicka said. “This is every single day. Usually that worker goes into that factory or goes into the restaurant, [and] every day their tips are stolen or every day they’re not paid overtime. So, it adds up and up and up and over time till it becomes billions of dollars.”
All forms of wage theft are against Illinois law — and the laws of nearly every other state, along with the federal government. Yet many employers still commit wage theft, often because they face few consequences when they get caught, according to Uribe.
“Often what we see with people who come to us with wage theft cases is ‘I feel like my employer did this because they were confident they could get away with it,’” Uribe said.
That confidence is well founded. Most wage theft is never reported in the first place, according to Rusicka.
“Sadly, it’s people who have the least political power [who are victims of wage theft],” Rusicka said. “If you’re poor, you might have to work three jobs and you don’t have time to do anything else, basically, besides work and try and take care of your family the best you can. If you don’t speak the language, you might be afraid to go and talk to the government.”
According to one estimate from the nonprofit think tank Economic Policy Institute, reported and unreported wage theft could amount to as much as $50 billion per year owed to workers.
That number dwarfs criminal offenses such as robbery, which accounted for just under $500 million in losses in 2019, according to FBI data. Burglary accounted for about $3 billion in losses that same year, and motor vehicle theft made up about $6 billion.
Even when wage theft is reported, employers often manage to avoid paying back the wages they owe, according to the data obtained by CBS News.
CBS News submitted public records requests to nearly every state labor department in the country and built a database of more than 650,000 total complaints. Of those cases, state agencies ruled in favor of claimants only about half of the time.
Even when workers won their claims, more than a third of those successful cases — totaling nearly a billion dollars — showed no money was ever recovered.
That’s a scenario Texas construction worker Oscar Torres knows all too well. In the last four years, the Texas Workforce Commission has ruled in his favor in four separate wage theft cases, but he still hasn’t seen a dime.
In his most recent claim, Torres said his employer — a small remodeling company — didn’t pay him for 10 full days of work.
Torres said every time he wins a case, the companies that owe him “just disappear” and the state can’t recover any of his money.
A spokesperson for the Texas Workforce Commission confirmed Torres’ story to CBS News Dallas-Ft. Worth, acknowledging he was awarded money in all four cases, but none has been paid.
To make matters worse, state wage theft cases often take months or even years to be decided. The median case among those CBS News analyzed lasted more than six months. Many dragged on for a year or more.
In California, Maria Arroyo has been waiting far longer than that.
A single mom with three kids, Arroyo said her employer, an Oakland, California, fast food restaurant, paid her less than minimum wage and denied her overtime pay and sick leave.
“I was working there for a long time, and I wasn’t even making the same money that the new guys were making at that point,” Arroyo told CBS News Bay Area reporter Max Darrow.
With the help of a local legal aid organization, Arroyo filed a complaint with the state labor commission in 2019. She says she’s still waiting for a resolution.
“I feel like they’re ignoring me, and they’re not interested in my case,” Arroyo said.
The same year Arroyo filed her complaint, Antonio Dominguez-Alcala’s own wage theft case was just wrapping up — or so he thought.
Along with more than 60 other employees at a Culver City, California, car wash, Dominguez-Alcala alleged his employer committed a range of wage theft violations, including not giving employees required time off and overtime.
Dominguez-Alcala told CBS News Los Angeles reporter Ross Palombo he was paid only tips and “wouldn’t get rest breaks, meal breaks [or] overtime.”
The state agreed, awarding the workers more than $2.3 million — the largest in the state’s history. But Dominguez-Alcala said his case is still in limbo, tied up in an appeal process that has dragged on for years.
Delays like those can discourage victims from filing wage theft claims in the first place, according to Uribe.
“It’s not something that generates trust in the public, you know?” Uribe said. “So if you file a complaint and you’re waiting eight months to get a determination on your complaint, you as a worker, having gone through that process, are not tremendously likely to go to someone else and say ‘Hey, you know, I wasn’t paid for my wages, you know, I went to a group like Arise Chicago and they filed charges with the Illinois Department of Labor. And in eight months, I got my money.’”
Whether they’re paid after eight months, a year, or never at all, the consequences for workers are the same: they’re out a paycheck and struggle to make ends meet.
The average amount owed in the cases CBS News analyzed was just under $1,000. That’s enough, according to Uribe, to cause genuine financial hardship for victims.
“A lot of people are living paycheck to paycheck,” Uribe said. “So, if you’re if you’re missing $1,000, I mean, what do you say to … your landlord, to the grocery store, to the bank, to the utility company. You can’t just tell them, ‘My employer didn’t pay me and so I’m not going to pay you.’”
Many wage theft claimants were owed far more: in nearly 30,000 of the cases CBS News analyzed, state labor agencies found $10,000 or more was owed.
Amid rising inflation, that can mean increased strain on workers’ pocketbooks. Espinosa said that, as a pizza delivery driver, recent spikes in gas prices have only worsened his financial situation.
“[Gas] went up a lot in price,” Espinosa said. “We talked to the owner and asked for more money for gas, or that the delivery price should go up because … it was actually very little. We couldn’t survive with that.”
Torres said losing wages “destabilizes everything around you.”
“I’ve fallen behind on rent,” he said. “I’ve had to cut back on food expenses. It limits the ability to go out or even pay rent or gas to be able to go to another job to get the income that I need.”
In California, wage theft claimants had the longest wait times of any state whose data CBS News analyzed: 439 days. Less than half of the cases resulted in a payment.
That dysfunction led Santa Clara County officials to take matters into their own hands.
There, restaurant workers — among the most vulnerable to wage theft, according to U.S. Department of Labor data — now benefit from a promising solution: an enforcement program that goes after businesses who are found to have committed wage theft but won’t pay up.
Beginning in 2019, Santa Clara County launched its own Office of Labor Standards Enforcement, and the county began revoking the food permits for restaurants that don’t comply with wage and hour laws.
“A core part of the county’s responsibility is ensuring that restaurants operate in a safe and lawful way,” said Greta Hansen, the county’s chief operating officer. “Other food service providers operate in a safe and lawful way, and so we leverage that authority to ensure those businesses are also complying with any wage judgments against them.”
When a restaurant has a wage theft judgment against it but won’t pay employees, the Office of Labor Standards reaches out.
“Ultimately, if a business really won’t pay its workers the final wages they’ve been determined to owe, then we can take action on their food permit,” Hansen said.
Hansen said the program has seen immediate success; even the threat of losing their licenses motivates businesses to pay up.
“We’ve been very fortunate because we’ve had a 100% success rate so far in actually getting businesses we’ve reached out to comply without taking that step [of revoking licenses],” Hansen said. “And that can mean immediately paying a judgment that they had not paid previously].”
New Jersey has a similar policy. There, a business license can be suspended if an employer won’t pay a wage theft determination by the New Jersey Department of Labor.
A spokesperson said the state has issued 57 “stop-work orders” since 2019.
Other states take a less aggressive approach.
In Texas, Ed Serna, the head of the Texas Workforce Commission, said threatening to shut down businesses isn’t always the right strategy.
“We have to be cautious about overstepping what we are doing, that we become too engaged in sort of the tactics of ‘we are going to shut you down if you don’t do ‘X.” That leads to an environment for both employers and employees that is just not very conducive to positive growth,” Serna told CBS News Dallas-Ft. Worth reporter Brian New.
While he acknowledged the system there could be improved, Serna said he thinks his agency has the tools it needs, adding that his focus “is to try and help Texans — Texans who are individuals or Texans who are businesses.”
Other local governments have their own ways of addressing wage theft, as do most states. The federal government also has its own wage theft claims process.
Depending on where someone lives, they might have more or fewer ways to fight for what they’re owed.
In big cities like New York, Los Angles and Chicago, victims of wage theft can report it to the city, the state and even the federal government. But in some states, such as Alabama and Florida, where there is no state-level process for filing a wage theft claim at all, workers have fewer options.
U.S. Secretary of Labor Marty Walsh, the top labor enforcer in the country, said states that lack any wage theft process at all are “just wrong.”
“When you’re in different states, you shouldn’t handle it different ways,” Walsh said in an interview with CBS News. “And if you happen to live in the state of Illinois, you happen to live in the state of California [or] live in the state of Massachusetts, you might have some great wage laws on the books that help you recoup money. But if you live in some of these other states that aren’t as top of the priority list, that’s unfortunate because a lot of those states that that, you know, don’t put wage theft as a top priority. Those are the states that people are really being abused in losing their wages.”
Faced with state claim processes that often don’t get results, many organizations such as Arise Chicago have stepped in to fill in the gaps, connecting victims of wage theft with attorneys who will take their cases to court.
Rusicka said Arise Chicago has led more than 250 campaigns involving wage theft and other workplace issues such as sexual harassment and health and safety violations. 78 of those cases involved lawsuits, Rusicka said.
This patchwork of systems can make it even harder for victims to recover lost wages, especially if they are immigrants or are undocumented, said Uribe.
“If you’re not familiar with what the laws and the protections that exist, if you are someone who is new to this country or believes that their [immigration] status will be an issue … you’re probably going to leave that alone,” Uribe said.
Often, employers threaten to report workers who complain of wage theft to immigration, which is exactly what Alejandro Perez Gonzalez said happened when he spoke up.
“Aside from non-payment, [my boss] intimidated us, calling immigration, wanting us to be sent back to Guatemala,” Perez Gonzalez told CBS News Miami reporter Joan Murray.
Like so many other victims of wage theft who win their cases, Perez Gonzalez’s employer was ordered to pay $5,900 three years ago but hasn’t been paid a cent, according to documents obtained by CBS News Miami.
Part of the problem, according to Uribe, is that “you can’t go to the police and file a police report for stolen wages.”
“When we’re talking about wage theft, this is largely considered a statutory violation,” Uribe said. “And for whatever reason, it does receive completely different treatment than if, say, you accosted someone on the street and took their wallet. And the truth is that in almost all aspects, it’s the exact same. The primary difference is that it’s more insidious, right? Because here you have an employer-employee relationship, you have an imbalance of power.”
Many of the activists and experts CBS News interviewed made that same distinction: though it involves a form of theft, wage theft usually isn’t treated as a criminal offense.
“[Wage theft victims] are afraid to come forward because they might think that they don’t have any other opportunities,” Walsh said. “But that is theft, that is stealing, that is a crime.”
Several states do have laws that make wage theft a crime.
In California, the state Labor Commissioner’s office referred 13 wage theft-related cases for criminal prosecutions, according to a report by the nonprofit news organization CalMatters, who partnered with CBS Sacramento to publish a local wage theft investigation in late 2022.
Other states have similar laws, though prosecutions of wage theft are rare.
In Illinois, employers who willfully refuse to pay wages can be guilty of a misdemeanor — a charge that can be upgraded to a low-level felony for repeat offenders. But a review of data from the Chicago-area prosecutor’s office by CBS News shows only a single prosecution under that statute since 2010.
In 2019, Minnesota enacted a law that strengthened protections for wage theft victims. That law made wage theft a crime which can carry a sentence of as much as 20 years in prison for the most serious cases.
A spokesperson for the Minnesota Attorney General’s office said there’s been only a handful of cases prosecuted since the law took effect.
Also in 2019, New Jersey passed its own Wage Theft Act, which subjects employers to 10 to 100 days of jail time if they refuse to pay their employees.
A spokesperson for the New Jersey Department of Labor said the agency has never used that power because most companies willingly resolve their cases to avoid the risk of fines or prosecution.
CBS News obtained data on more than 25,000 cases handled by the New Jersey Department of Labor dating back to 2010. Most — about 80%— show wages were repaid.
That still leaves more than 5,000 cases in which victims weren’t paid. None of those employers was criminally prosecuted, the spokesperson confirmed, adding in an email that employers can fail to pay for non-criminal reasons, such as filing for bankruptcy.
In Texas, Serna said the state labor agency can refer wage theft cases for prosecution, but most of the time prosecutors decline to pursue cases.
“A lot of the times the [prosecutors] aren’t inclined to want to do that because it’s not a big enough deal for them,” Serna said.
More than 327,000 people were arrested for property theft in the U.S. in 2021, according to FBI data.
Even when they are prosecuted, the penalties for wage theft are often much less severe than those for shoplifting or burglary.
For example, in Illinois, willful wage theft violations up to $5,000 are class B misdemeanors — punishable by up to six months in jail. Repeat offenders can be convicted of low-level felonies that carry a sentence of as much as three years in prison.
In contrast, any theft of property worth more than just $500 in the state is a felony with a sentence of up to five years.
If wage theft was treated the same as property theft, many of the cases CBS News analyzed could’ve been felonies.
CBS News compared the amounts owed for each case to the felony theft threshold in each state it obtained data for — the amount at which a misdemeanor theft becomes a felony — in each state. Of the more than 650,000 cases CBS News analyzed, it appears that more than a quarter could have been charged as felonies.
The federal department Walsh runs faces similar challenges to the state systems whose data CBS News analyzed — in particular, long wait times for cases, which Walsh apologized for in an interview with CBS News.
Officials told CBS News the Department of Labor doesn’t have the resources to pursue every single claim submitted, and Walsh said his agency has been “shortchanged on budget money” over the years.
“This has been one of my major focuses with Congress: to staff up,” Walsh said. “Because if you get shortchanged dollars, Democrat or Republican — it doesn’t matter who you are. And really, we should be doing more as far as trying to reclaim this [money].”
Staffing has been an ongoing issue for the Department of Labor. A recent budget document said the Department lost about 14% of its staff between 2016 and 2020, “limiting [the department’s] ability to perform inspections and conduct investigations.”
Walsh apologized for long wait times and urged victims who are awaiting federal wage theft claims to “hang in there.”
“Our job is to [investigate cases] as quickly as we can to recoup the wages and the money that you’re owed,” Walsh said. “And we’re going to continue to fight for you every single day, and just know that we’re fighting for you. And, you know, I’ll apologize for it, for the long longevity of a case.”
Rep. Rosa DeLauro, a Connecticut Democrat, is trying to fix those long wait times in the federal system. In October 2022, she proposed new federal legislation that would increase penalties, mandate better record keeping and increase funding for the U.S. Department of Labor.
“[Companies] have to be accountable,” DeLauro said. “And we have to extract serious penalties if they are stealing money that is legally owed to a worker.”
“If you worked, you need to be paid for that work,” DeLauro said. “People today live paycheck to paycheck. It’s not a soundbite, it is a reality. So, imagine, people pride themselves in their work. They go to work, they work hard. They try to do what they’re asked to do, and then to deny them the wages that they are owed. And it’s not [just] them. It’s their families as well who suffer from this. That’s why the legislation is so critical, and it is so important.”
The department has other solutions it hopes will help prevent wage theft from happening in the first place. It created an app for workers to track their time sheets themselves and catch discrepancies in their pay, and also has a searchable database where workers can see if they’re owed any back wages awarded by the federal department of labor.
Meanwhile, workers like Asael Espinosa in Chicago have no choice but to keep fighting.
“It doesn’t matter how long it takes,” Espinosa said. We will keep fighting. And we will continue until the end, until we win this.”
CBS News Sacramento reporter Julie Watts, CBS News Texas reporter Brian New, CBS News Los Angeles reporter Ross Palombo, and CBS News Miami reporter Joan Murray also contributed to this report.
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Would you rather be a front-desk clerk or “Director of First Impressions”? A barber or a “Grooming Manager”?
How you answer could mean a significant difference in annual earnings. That’s because companies routinely inflate workers’ titles to avoid paying them in full for overtime work, according to researchers from the University of Texas and Harvard Business School.
It’s no secret companies go to great lengths to keep their labor costs down. What the new working paper reveals is that firms save a total of $4 billion in overtime payments a year simply by getting creative with titles. For employees, however, these inflated titles result in 13% less pay than they might otherwise get.
“If you’re relying on cheap labor — you’re a labor-intensive company and you can get away with it — this becomes a tool that you can use to lower your costs,” said Umit Gurun, professor of accounting and finance at the University of Texas at Dallas and one of the report’s authors.
Gurun said he and coauthor N. Bugra Ozel hit on the idea for the study, published by the National Bureau for Economic Research, while they were traveling through an airport and overheard two workers talking about a delayed flight.
“One said, ‘I don’t complain because I get overtime.’ The other guy was a manager, so he didn’t,” Gurun recalled. “But they were doing exactly the same job.”
After that discussion, the researchers started noticing dozens of examples in the news. It wasn’t hard: Workers have filed lawsuits against some of the largest employers in the U.S., including Bank of America, Family Dollar, JPMorgan Chase, Starbucks and UPS. Companies are sued for wage theft more than almost anything else, with the exception of workplace safety and health violations.
These lawsuits focus on a quirk in U.S. wage laws. Generally, companies are required to pay workers one-and-a-half times their hourly rate anytime they work more than 40 hours in a week. But there’s an exemption for salaried managers, who receive the same amount of pay each week, as long as they earn above a certain minimum amount. During the time period analyzed by the authors, that cutoff to qualify for OT was $455 a week — equivalent to an annual salary of $23,660.
For the paper, Gurun and his co-authors analyzed a database of job postings from labor analytics firm Burning Glass Technologies between 2010 and 2018, paying particular attention to which ones listed managerial titles. They found that the incidence of fake-sounding manager titles spiked at the legal threshold of $455 a week — exactly the cutoff at which a company would be allowed to put workers on salary and sidestep OT payment laws.
“There is a systematic, robust and sharp increase in firms’ use of managerial titles around the federal regulatory threshold that allows them to avoid paying for overtime,” the paper concluded.
Some of these unconventional manager titles, according to the researchers: food cart manager, price scanning coordinator, carpet shampoo manager, lead shower door installer, director of first impressions, guest experience leader and grooming manager.
Notably, this pattern didn’t exist in states that set a different salary threshold for OT, nor with managerial titles that were paid hourly, reinforcing the idea that companies are doing this strategically to avoid paying overtime. The paper also found that inflated manager titles were more common in states with weaker labor laws, low union membership and higher unemployment.
Hourly workers are well aware that fancy titles can be used to mask insufficient pay — and so are regulators. As far back as 1940, the Department of Labor warned that companies are likely to game the system if they are allowed to exempt particular titles from their full legal pay.
“Titles can be had cheaply,” one official wrote. “[I]t is not hard to call a janitor a ‘superintendent’ or a ‘superintendent of maintenance’ if some result desirable to the employer will flow therefrom.”
But companies continue strategic title-fudging because, well, it pays. In 2019, a year when the Department of Labor won $226 million in back wages for cheated workers, companies saved roughly 18 times that amount by calling frontline workers doing ordinary jobs “managers,” the paper found.
“The incredibly high [return on investment] on this activity of avoiding overtime wages might explain why we see firms across every industry — from Staples to JPMorgan, to Facebook, to Walmart, to Verizon, to Avis, to Lowes — engaging in this activity even up through the present day,” the paper said.
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[ad_1]
Would you rather be a front-desk clerk or “Director of First Impressions”? A barber or a “Grooming Manager”?
How you answer could mean a significant difference in annual earnings. That’s because companies routinely inflate workers’ titles to avoid paying them in full for overtime work, according to researchers from the University of Texas and Harvard Business School.
It’s no secret companies go to great lengths to keep their labor costs down. What the new working paper reveals is that firms save a total of $4 billion in overtime payments a year simply by getting creative with titles. For employees, however, these inflated titles result in 13% less pay than they might otherwise get.
“If you’re relying on cheap labor — you’re a labor-intensive company and you can get away with it — this becomes a tool that you can use to lower your costs,” said Umit Gurun, professor of accounting and finance at the University of Texas at Dallas and one of the report’s authors.
Gurun said he and coauthor N. Bugra Ozel hit on the idea for the study, published by the National Bureau for Economic Research, while they were traveling through an airport and overheard two workers talking about a delayed flight.
“One said, ‘I don’t complain because I get overtime.’ The other guy was a manager, so he didn’t,” Gurun recalled. “But they were doing exactly the same job.”
After that discussion, the researchers started noticing dozens of examples in the news. It wasn’t hard: Workers have filed lawsuits against some of the largest employers in the U.S., including Bank of America, Family Dollar, JPMorgan Chase, Starbucks and UPS. Companies are sued for wage theft more than almost anything else, with the exception of workplace safety and health violations.
These lawsuits focus on a quirk in U.S. wage laws. Generally, companies are required to pay workers one-and-a-half times their hourly rate anytime they work more than 40 hours in a week. But there’s an exemption for salaried managers, who receive the same amount of pay each week, as long as they earn above a certain minimum amount. During the time period analyzed by the authors, that cutoff to qualify for OT was $455 a week — equivalent to an annual salary of $23,660.
For the paper, Gurun and his co-authors analyzed a database of job postings from labor analytics firm Burning Glass Technologies between 2010 and 2018, paying particular attention to which ones listed managerial titles. They found that the incidence of fake-sounding manager titles spiked at the legal threshold of $455 a week — exactly the cutoff at which a company would be allowed to put workers on salary and sidestep OT payment laws.
“There is a systematic, robust and sharp increase in firms’ use of managerial titles around the federal regulatory threshold that allows them to avoid paying for overtime,” the paper concluded.
Some of these unconventional manager titles, according to the researchers: food cart manager, price scanning coordinator, carpet shampoo manager, lead shower door installer, director of first impressions and grooming manager.
Notably, this pattern didn’t exist in states that set a different salary threshold for OT, nor with managerial titles that were paid hourly, reinforcing the idea that companies are doing this strategically to avoid paying overtime. The paper also found that inflated manager titles were more common in states with weaker labor laws, low union membership and higher unemployment.
These legally dubious tactics coexist with the phenomenon of “title inflation” in white-collar jobs, in which employers sometimes grant salaried workers ever-loftier titles in lieu of raising their pay. Common in startups, the phenomenon “exploded” during the pandemic, Shawn Cole, president of search firm Cowen Partners, told Bloomberg last year.
“Entire careers of job titles are being condensed into a decade, 10 years worth of titles are being condensed into five, so new titles have had to be invented,” he told the outlet. “Firms can only offer so much money.”
Hourly workers are well aware that fancy titles can be used to mask insufficient pay — and so are regulators. As far back as 1940, the Department of Labor warned that companies are likely to game the system if they are allowed to exempt particular titles from their full legal pay. “Titles can be had cheaply,” one official wrote. “[I]t is not hard to call a janitor a ‘superintendent’ or a ‘superintendent of maintenance’ if some result desirable to the employer will flow therefrom.”
But companies continue strategic title-fudging because, well, it pays. In 2019, a year when the Department of Labor won $226 million in back wages for cheated workers, companies saved roughly 18 times that amount by calling frontline workers doing ordinary jobs “managers,” the paper found.
“The incredibly high [return on investment] on this activity of avoiding overtime wages might explain why we see firms across every industry — from Staples to JPMorgan, to Facebook, to Walmart, to Verizon, to Avis, to Lowes — engaging in this activity even up through the present day,” the paper said.
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