Despite Minimum Wage Hikes, States Often Fail to Enforce the Law

February 20, 2018

As Democrats make raising the minimum wage a centerpiece of their 2018 campaigns, and Republicans call for states to handle the issue, both are missing an important problem: Wage laws are poorly enforced, with workers often unable to recover back pay even after the government rules in their favor.

That’s the conclusion of a nine-month investigation by POLITICO, which found that workers are so lightly protected that six states have no investigators to handle minimum-wage violations, while 26 additional states have fewer than 10 investigators. Given the widespread nature of wage theft and the dearth of resources to combat it, most cases go unreported. Thus, an estimated $15 billion in desperately needed income for workers with lowest wages goes instead into the pockets of shady bosses.

But even those workers who are able to brave the system and win — to get states to order their bosses to pay them what they’re owed -- confront a further barrier: Fully 41 percent of the wages that employers are ordered to pay back to their workers aren’t recovered, according to a POLITICO survey of 15 states.

That’s partly because, in addition to lacking resources, states lack the tools to go after the landscaping firms, restaurants, cleaning companies and other employers that shed one corporate skin for another, changing names while essentially continuing the same businesses — often to evade orders to pay back their workers.

This failure to enforce both the minimum hourly wage — $7.25 under federal law — and rules requiring higher pay for overtime distorts the economy, giving advantages to employers who break the law. It allows long-term patterns of abuse to take root in certain service industries, especially restaurants, landscaping and cleaning. Advocates for lowest-wage workers describe families facing eviction and experiencing hunger for lack of money that’s owed them. And, nationally, the failure to enforce wage laws exacerbates a level of income inequality that, by many measures, is higher than it’s been for the past century.

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