Pandemic workers face another hazard: wage theft

Already battered by long shifts and high infection rates, essential workers struggling through the pandemic face another hazard of hard times: employers who steal their wages.

When a recession hits, U.S. companies are more likely to stiff their lowest-wage workers. These businesses often pay less than the minimum wage, make employees work off the clock, or refuse to pay overtime rates. In the most egregious cases, bosses don't pay their employees at all.

Companies that hire child care workers, gas station clerks, restaurant servers and security guards are among the businesses most likely to get caught cheating their employees. That's according to a Center for Public Integrity analysis of minimum wage and overtime violations from the U.S. Department of Labor. In 2019 alone, the agency cited about 8,500 employers for taking about $287 million from workers.

Their victims toil on the lower rungs of the workforce. People like Ruth Palacios, a janitor from Mexico who earned less than the minimum wage to disinfect a New York City hospital at the height of the pandemic.

Companies have little incentive to follow the law. According to a review of data from the Labor Department's Wage and Hour Division, which investigates federal wage-theft complaints, the division rarely penalizes repeat offenders. Public Integrity obtained the records through a Freedom of Information Act request covering January 2005 to October 2020.

Some experts say wage theft is so pervasive that it's costing workers at least $15 billion a year — far more than the amount stolen in robberies.

"It's something that is absolutely prevalent, right, among workers, particularly low-wage workers," said Jennifer Lee, a clinical law professor at Temple University.

Palacios and Arturo Xelo, a married couple from Mexico, disinfected COVID-19 patient rooms at Memorial Sloan Kettering Cancer Center in New York. They worked seven days a week for months, Palacios said, but weren't paid overtime. At the start of the pandemic, they earned the local minimum wage of $15 an hour, she said, but after a few months, their boss lowered their pay to $12.25.

"The little guys have to speak up, because people, the bosses, are taking advantage of their workers," Palacios said in a video call from her home in Queens.

Palacios, Xelo and two of their former co-workers filed a federal lawsuit against the contractor that hired them, BMS Cat, in January. The company did not respond to requests for comment. In court records, it denied that it paid the cleaners less than the minimum wage or that it owed them overtime pay. The hospital did not respond to requests for comment, either.

Fidel Martinez worked for a demolition contractor last year. He helped to demolish several Walgreens stores and other structures in and around Minneapolis. Martinez said the contractor owed him and his co-workers more than $20,000. His boss kept telling him the money was coming, but Martinez would get his paychecks weeks late, and many of them he didn't get at all. He ended up borrowing money from friends to pay his bills during those months. A local nonprofit eventually helped Martinez and the others to recover their wages.

"You feel happy, pleased to recover something that belongs to you. And, well, you feel the satisfaction of having won a battle. But even so, the shamelessness of those people always exists," Martinez said.

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This story is a collaboration between The Associated Press and The Center for Public Integrity, a non-profit investigative newsroom in Washington, D.C.