A New Strategy for Protecting the Rights of Workers
“We need to do more than just issue the equivalent of traffic tickets to businesses that steal the wages of their workers. Workers should be compensated and we need to hold the worst corporate actors accountable under the criminal law.” -- Richard Aborn
Yu Guan Ke worked more than 10 years as a delivery man for Saigon Grill, a Vietnamese restaurant on the Upper West Side. Mr. Ke was paid $120 a week for 75 hours weeks. Despite repeated protests, the restaurant’s owners refused to pay the minimum wage to dozens of workers -- almost all of them immigrants. Finally, earlier this year, Mr. Ke and his colleagues won a civil lawsuit against the owners and were awarded $4.6 million for lost and stolen wages.
State minimum wage, prevailing wage, unemployment insurance and workers compensation laws are all designed to protect the rights of hard working New Yorkers When employers break the law, it is an attack on those rights and the pocketbooks of their workers. It also puts employers who do comply with the law at an unfair competitive disadvantage. And, in many cases, it may be indicative of other corporate criminal activity.
As District Attorney, Richard Aborn will use the force of the criminal law to protect the rights of workers.
THE PROBLEM: UNSCRUPULOUS EMPLOYERS WHO VIOLATE WAGE LAWS
New York State has strong and progressive wage protection laws on the books. Yet, too many workers go unprotected as a result of a lack of compliance by unscrupulous employers.
Minimum Wage
New York has its own State minimum wage law, enforced by the State Department of Labor. On July 29, 2009, New York State raised its minimum wage to $7.25 to match a concurrent increase at the federal level.
A 2007 study by the Brennan Center for Justice at NYU School of Law found that employer violations of the minimum wage law are endemic in New York City’s low-wage industries. In the Saigon Grill case, a federal court found that multiple restaurants through Manhattan failed to pay the minimum wage to their employees and engaged in a campaign to intimidate them and prevent them from filing a lawsuit to recover the wages that they were rightfully owed. In order to conceal their crimes and to create a legal paper trail, the proprietors required the workers to cash paychecks (that were made out in their names) and then return the full amount of the paycheck to the proprietor.
Prevailing Wage
Private contractors doing construction or building service work on behalf of the City or the State are required to pay the prevailing wage for the applicable job classification to their workers. The New York State Department of Labor sets and enforces the prevailing wage on State projects and the New York City Comptroller sets and enforces the prevailing wage on City projects. Contractors are required to pay prevailing wages and file certified payroll records with requests for payment.
Prevailing wage violations are frequently only a part of a larger criminal enterprise. To cover up non-payment, contractors who violate the law often file false payroll records and then pay their employees less than prevailing wage, often in cash. The cash is sometimes generated through money laundering schemes that are often used by other criminals, including drug dealers and organized crime. Moreover, workers and the public are both victims of prevailing wage violations. Contractors who fail to pay prevailing wages are pocketing public dollars intended for workers.
Unemployment Insurance and Workers Compensation
Many times employers that fail to pay mandated wages also violate the law by failing to make contributions to the Unemployment Insurance Fund and the Workers’ Compensation program on behalf of their workers. Employers who fail to contribute increase the cost to legitimate employers who do pay. And, if an employer does not make these contributions, laid off workers can have difficulty in receiving their unemployment benefits.
THE SOLUTION: PROGRESSIVE AND EFFECTIVE ENFORCEMENT
Enforcement of wage protection laws is the responsibility of multiple federal, state and local regulatory and law enforcement agencies. While the federal government has the most resources, it has – until recently – essentially abdicated its responsibility. A July 2008 Government Accountability Office report found that federal enforcement of minimum wage and overtime violations was down by 37% over the last decade.
State and local agencies do the best they can with often limited resources. But for many employers, civil penalties and sanctions may have a limited effect and be seen as little more than the cost of doing business. Absent a meaningful threat of criminal prosecution, unscrupulous employers are not deterred.
Prevailing wage law violations have led to numerous criminal prosecutions and have frequently been a means of identifying larger criminal enterprises. A similar approach could be taken to minimum wage law enforcement. Every violation of the minimum wage law constitutes a Class B Misdemeanor. But minimum wage cases may also involve other criminal violations – from falsifying business records and false filings to money laundering, which will be prosecuted as felonies.
Richard Aborn is committed to enforcing wage protection laws and prosecuting employers that violate them. As District Attorney, he will:
