Wage theft – a term for employers illegally withholding wages – is rampant across Colorado.
From telemarketers to tortilla manufacturers, workers in myriad industries have suffered from employers failing to pay them wages they are owed, a Rocky Mountain PBS I-News investigation has found.
While blue-collar workers are most frequently cheated, workers across pay scales in Colorado are vulnerable to theft, the analysis of federal enforcement data shows.
Since 2005, the federal Department of Labor has recovered more than $31 million in wages that had been illegally withheld by employers in Colorado in violation of the Fair Labor Standards Act.
Across the U.S. the amount of illegally withheld wages was more than $1.4 billion for the same period.
Under the Colorado Wage Claim Act, employers who cheat workers out of wages can face a misdemeanor charge, $300 fine and 30 days in a county jail – penalties the General Assembly put in place in 1941 that have not changed since.
But that law is not being used to hold potentially criminal employers accountable. No charges have been filed under the law since 2001, according to state court data analyzed by I-News.
The investigation shows the patchwork of enforcement options in the state means persistently egregious employers can escape harsh punishment.
Construction tops in unpaid wages
Construction was the largest source of unpaid wages in Colorado, according to the I-News analysis, followed by workers in food service, oil and gas and janitorial services. Wage investigations involving workers employed by local school boards and state correctional institutions were also near the top of the list of wages recovered by federal labor authorities.
The list of industries is diverse. Real estate companies, dentists’ offices, hotels and bakeries have also been sites of wage theft in Colorado.
The amount of illegally withheld wages can easily equal a week’s worth of pay, according to the I-News analysis. For example, since 2005 the Department of Labor recovered an average of $389 in back wages for each of 3,863 janitors in Colorado, while their average weekly wage was $365, according to Bureau of Labor Statistics’ 2013 data.
The amount in back wages only captures cases that have received scrutiny from Department of Labor investigators – countless other businesses and individual cases escape attention.
Some estimates put the rate of illegally withheld wages much higher. The Colorado Fiscal Institute, a policy think-tank, estimated that workers are deprived of $749.5 million per year, based on applying the rate of wage theft cases found in a 2009 survey of workers in Los Angeles, Chicago and New York to Colorado industries. Those surveys found that one-in-four workers were paid less than minimum wage.
Workers have a few options to force their employers to pay back, unpaid wages. They can file a complaint with the state Department of Labor and Employment, and a compliance officer will send their employer a letter to begin an investigation.
The department receives an average of 5,000 complaints a year and recovers about $1 million in unpaid wages, according to agency spokesman Bill Thoennes.
This month, the department received increased enforcement power to issue fines and penalties to employers for noncompliance, and will increase the number of employees involved in investigations from four to nine. Previously, the agency could only refer the parties to mediation.
The federal Department of Labor’s investigations under the Fair Labor Standards Act cover employers with gross revenue of $500,000 or more, or employers that are hospitals, preschools, universities or public agencies.
At the federal level, 96 Colorado cases were filed in 2014 under the Fair Labor Standards Act, the federal law regulating wage and hour conditions. The number of cases filed under the act has tripled since 2009.
The courthouse is also a place some workers turn to recover unpaid wages.
In county courts, workers have filed an average of 73 cases a year since 2009 for unpaid wages, according to Colorado court data as of November 2014. Cases from last fall show the diversity of businesses where workers alleged wage theft: a Vietnamese restaurant, a real estate company and even a bison ranch in Grand County.
But the cost of paying an attorney and court filing fees can easily exceed what the unpaid wages are worth.