By Pablo Aquiles-Sanchez and Katya Spear
Across the country, workers in many industries face wage theft in one form or another. According to a recent report by the Economic Policy Institute, companies paying their employees less than the minimum wage – which is only one form of wage theft – takes away $15 billion from workers each year at the national level. When looking towards accountability, agencies at all levels are often impeded by state-level preemptive laws that prevent local governments from enacting ordinances that would guarantee fair labor practices and access to secure wages.
Though many cities face this barrier, there are still a number of effective strategies that local leaders can implement to combat wage theft. These range from creating institutions dedicated to worker’s rights, such as a municipal Labor Department or a worker board/labor advisory council, to enforcing labor standard requirements for municipal contractors. Cities with little or no state preemption regarding labor standards, should also prioritize strong ordinances that cover city-level minimum wages, wage theft, and/or prevailing wages. In this Good Ideas for Cities, we give a wide range of innovative ideas to tackle wage theft that all cities can implement and also look at some model ordinances for cities that do not face state preemption.
Tracking and Disclosure
Sunlight is a powerful force. Some jurisdictions have launched new tools to track and disclose wage theft violations. San Diego County has a Wage Theft Judgement Dashboard that allows anyone to search wage claim judgements issued by the California Division of Labor Standards Enforcement for cases originating in their San Diego Office. This approach offers those in the workforce – and others who wish to partner with employers – an easy way to see who has violated local labor codes.
Wage Theft Ordinances: Somerville MA & Cleveland OH
Whenever possible, cities should strive to pass strong ordinances against wage theft – as well as those for other labor issues, such as minimum wage, fair scheduling, etc. The city of Somerville, MA enacted a wage theft ordinance that covers five categories of companies that do business with the city; licensees, city contractors, tax increment financing agreement (TIF) recipients, municipal construction contractors, and recipients of all other building permits. The ordinance also establishes a Wage Theft Advisory Committee which meets every two months, publishes an annual report, and meets with the state attorney general’s office twice a year to discuss any complaints involving Somerville employers, and to coordinate generally on wage theft
issues. Passing a wage theft ordinance is also possible in states that face preemption over labor-related laws, as shown by Cleveland, OH. In Cleveland’s ordinance, employers are barred from contracting with the city if they fail to comply with any wage related claim, including timely disclosure of records or employee misclassification.
Advisory Committees and Worker Boards: Lynn MA & Detroit MI
Cities can also simply instate a Wage Theft Advisory Committees or Worker Boards if state-level preemption makes implementing an ordinance that tackles wage theft directly too difficult. The city of Lynn, MA established a city-wide Wage Theft Advisory Committee to support workers who experienced wage theft and were litigating their claims. In Detroit, MI, an ordinance establishes the pathway for workers to create industry-level Standards Boards, where workers and city government officials alike (representing both the mayor’s office and city council) create recommendations for improving working conditions in specific industries and worksites.
Community Enforcement Program: Minneapolis, MN
Through ordinances, cities can also empower already-existing local community organizations in their own efforts against wage theft. In Minneapolis, MN a city ordinance has led to the development of a multilingual and culturally-specific outreach and community engagement program to educate workers about their rights. The city’s Office of Labor Standards contracts with community organizations with city funding. Additionally, the prime contractors (larger community organizations) can subcontract with other organizations as well.
Want to learn more before starting? Read these articles to learn more about what local governments can do to prevent wage theft and empower workers in their communities:
- Local Progress, Center for Labor & a Just Economy, and the Economic Policy Institute | Localities Take Action to Protect Workers: A Report for Labor Day 2023
- The Economic Policy Institute | Power in partnership: How government agencies and community partners are joining forces to fight wage theft | Economic Policy Institute
Governing | Local Governments Mobilize to Support Working Citizens