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New Study Uncovers Wage Theft and Workplace Abuse in the Garden State

For day laborers, finding work too often means accepting less than minimum wage, forgoing safety equipment, or enduring abuse by crooked employers. A new study by the Seton Hall Law School Center for Social Justice highlights the harsh realities for these workers in the New Jersey day labor market, finding evidence of wage theft and other workplace violations. The authors surveyed over 113 workers at seven pick-up sites throughout the state.

The study shows just how flagrant worker exploitation in the informal economy has become: Nearly one in four workers reported being injured or assaulted on the job, and nearly 35 percent were abandoned by employers at a worksite. Around half of all workers were underpaid or not paid at all, while the overwhelming majority—94 percent—never received overtime pay.

Instead of lining unscrupulous employers’ pockets, these lost wages could have been spent in local businesses or otherwise supporting the regional economy. And as we’ve pointed out before, when employees don’t receive their fair share of wages, city and state budgets lose thousands in income and sales tax revenue. Wage theft also hurts law-abiding employers, as they find it more difficult to compete against competitors who steal from their employees to make larger profits.

What are stakeholders doing to end these abuses? According to the study, there is power in community organizing and immigrant advocacy. It finds that survey communities with strong local advocacy groups had the lowest rates of wage theft and among the lowest rates of workplace injury and assault; on the other hand, localities with no worker advocacy infrastructure had the highest rates of workplace violations. The majority of day laborers are undocumented immigrants, a group that is highly vulnerable to workplace abuses; many are afraid to speak up to authorities due to fears of retaliation. Indeed, the Seton Hall report found that 26 percent of workers said employers had threatened to report them to immigration if they complained. By educating day laborers about their rights and connecting them to employers who do follow the rules, community based-organizations help combat illegal working conditions in a very real way.

But they can’t do it alone. One professor who directed the survey explains: “These workers are being robbed, injured and beaten with impunity because of weak, underenforced and antiquated labor laws. What we really need now is to muster the political will to address this.” Municipal and state government agencies must do their part to revise and strengthen existing statutes against wage theft. The report recommends several fixes for New Jersey’s ineffective Wage Theft Statute, including a measure making it harder to misclassify employees as independent contractors that are ineligible for wage and hour protections.

For model legislation, New Jersey should look no further than http://open.nysenate.gov/legislation/bill/S8380, signed into law last month. Backed by community groups and lawmakers alike, the Wage Theft Prevention Act is a major step toward protecting the employment and labor standards that day laborers and thousands of other low-wage workers rely on.

The measure raises the stakes for employers who break wage and hour laws by creating higher penalties for wage theft, giving authorities new tools to ensure employers will pay fines, and encouraging workers to come forward.

The status quo favors no one but the greedy employers who profit from breaking the law and abusing their workers. This year, New Jersey labor advocates and elected officials should make fighting wage theft and enforcing workplace violations in the low-wage market a top priority, not only to help low-wage workers get their due, but also to support broader economic recovery.

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Posted at 12:28 PM, Jan 11, 2011 in Employment | Immigration | Labor
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