Seattle proposal would make wage theft a crime

Back when times were good and jobs plentiful, workers who felt they were being cheated of their pay could quit and find other work.

But these are not good times.

Now, many workers, in such industries as construction and janitorial, are staying on the job without pay for weeks or even months, hoping things will get better. In the end, when they do quit — or are fired — many are unable to get the pay employers owe them.

Wage theft has become such a problem that the city of Seattle is considering legislation that would make it a criminal offense to intentionally fail to pay an employee for work performed.

"We've concluded that the system ... does not offer the protections that we think are appropriate for some of the most vulnerable people in our community," said Councilmember Tim Burgess, who is proposing the legislation.

"We're sending a message that at least inside our city, we don't want this kind of activity to be going on."

The proposed ordinance will be discussed at a committee hearing at 10:30 a.m. Thursday and introduced to the full council next week. It is broadly modeled after an ordinance in Austin, Texas — one of a small but growing number of cities that have made wage theft a crime.

"Cities and states are waking up to the fact that wage theft is a huge problem," said Rebecca Smith, Seattle-based staff attorney for the New York-based National Employment Law Project.

"They are seeing that workers who go without pay are in no position to stimulate the local economy with their consumer purchases. Companies that cheat workers are also likely to cheat municipalities out of taxes."

New immigrants

Many victims of wage theft are new immigrants — some in the country unlawfully.

For every one who complains to the state Department of Labor & Industries (L&I) about being cheated, unknown numbers do not — either because they don't know they can or are intimidated by their own poor English.

Those here illegally tell of employers who threaten to report them to immigration. "If you talk to a recent immigrant in any of these (low-wage) industries, you won't find one who hasn't been cheated many times over," said David Mark, a longtime labor attorney in Seattle.

Craig Keller, who heads Respect Washington, a group circulating petitions for a state ballot initiative to crack down on illegal immigrants, said the problem "is of the City Council's own making" because it condones illegal immigration through city policies and the organizations it supports.

Many wage-theft victims, he said, work under the table and are paid in cash, thus "they take their chances after making bargains with the devil."

State law lacks teeth

In 2006, state lawmakers passed the Wage Payment Act, providing workers an administrative process for recovering lost wages.

Last year, L&I received 4,042 complaints but ultimately collected for workers less than half of the $3.9 million it determined employers owed.

State officials say, and advocates agree, that these claims can be tough to investigate.

Workers sometimes lack sufficient evidence to prove a claim. And investigations often take so long that these workers, focused on survival, may leave town in search of other work or just give up, with no way of being contacted.

"The tough part is in collecting the wages," said Elizabeth Smith, program manager with Employment Standards at L&I. "When businesses go under, when accounts are dry, when there's no money to pay wages, it can be hard to collect."

Attorneys and groups like Casa Latina, which operates a day-labor center in Seattle, say the state lacks resources to aggressively pursue employers but also, too often, seems to let even the worst offenders off the hook.

Casa Latina employs a range of strategies to help workers recover lost wages — from helping find an attorney to mounting public campaigns meant to shame an employer into paying.

The proposed city ordinance, which clarifies that wage theft is included in the city's theft-of-service ordinance, would provide workers with another tool, allowing the city to deny or revoke business licenses of employers with outstanding wage-theft violations.

It would allow for prosecution of employers who either contract for the work in the city or have the work performed here.

Lornet Turnbull: 206-464-2420 or lturnbull@seattletimes.com