Push for higher minimum wage ignites worry about enforcement

Associated Press

NEW YORK

As a campaign to raise the minimum wage as high as $15 has achieved victories in such places as Seattle, Los Angeles and New York, it has bumped up against a harsh reality: Plenty of scofflaw businesses don’t pay the legal minimum now and probably won’t pay the new, higher wages either.

Some economists, labor activists and regulators predict that without stronger enforcement, the number of workers getting cheated out of a legal wage is bound to increase in places where wages rise.

Estimates on the size of the problem vary, but the Bureau of Labor Statistics said that in 2014, roughly 1.7 million U.S. workers – two thirds of whom were women – were illegally paid less than the federal minimum of $7.25 per hour.

Other studies put the number higher. A report by the Department of Labor in December estimated that in New York and California alone, there are 560,000 violations of the law every week, representing $33 million in lost income.

Those figures represent workers such as Celina Alvarez, who came to the U.S. from Michoacan, Mexico, four years ago and took a series of poorly paying jobs as a cook after settling in New York City.

At the first two restaurants, Alvarez worked 12 hours per day, six days a week for a flat weekly wage of $350. That comes out to about $4.86 per hour. There were no tips and no overtime pay. Some weeks, Alvarez said, she and other women in the restaurant didn’t get paid at all. Managers didn’t care if they quit. They’d just hire someone else.

“We were dispensable to them,” she said.

The U.S. Labor Department investigates those types of violations and already is doing a brisk business in enforcement cases. During the last federal fiscal year, it said it recovered $270 million in back wages for 270,000 workers.

But the agency’s roughly 1,000 investigators, who police 7.3 million businesses employing 135 million workers, don’t enforce state and local wage laws, for the most part. That means that cities and states that hike their minimum wage above the federal rate of $7.25 are on their own.

That’s causing some concern that, without a robust enforcement mechanism, many workers could wind up being left behind.

“A lot of states are facing that challenge now,” said David Weil, administrator of the U.S. Labor Department’s Wage and Hour Division. “It is very important to pass those minimum wage increases ... Then, how do we make sure workers really receive them?”

Twenty-nine states now have a minimum wage higher than the federal rate, but anti-poverty activists have been campaigning hard for municipal lawmakers to bypass both Congress and their state legislatures and set wages much higher.