Wage Theft and Illegal Retaliation At Low-Wage Employers

Two major stories of corporate misconduct toward employees hit the headlines yesterday: in the morning, low-wage federal contract workers filed a complaint with the U.S. Department of Labor alleging that more than 100 employees in the food court of federally-owned Union Station had been victims of wage theft—paid less than the minimum wage or denied overtime pay. In the afternoon, the National Labor Relations Board issued a complaint against Walmart for illegally threatening and retaliating against employees who exercised their legal rights to strike and protest.

I’ve had the opportunity to do research about both Walmart’s employment standards and the federal government’s policies toward its contract workforce, (I also shared this research at the press conference announcing the Union Station complaint). The gist of both studies is that pay rates could use a lot of improvement, and the country as a whole would benefit if low-paid workers—whether they’re federal contract employees, Walmart workers, or anyone else stuck in a low-wage job—earned enough to buy the basics and support their families.

But raising wages above the minimum isn’t even at issue in the recent complaints: following the law is.

According to the Union Station complaint, the fast food companies with outlets in the landmark train station’s basement food court—located in the heart of Washington DC, within sight of the Capitol Building—thought they could get away with paying employees at little as $5.56 an hour, in blatant violation of both city and federal minimum wage laws. Good Jobs Nation, the organization representing Union Station workers, asserts that according to their calculations:

the employees of the businesses included in this Compliant have lost, on average, almost $10,000 per year, per person—or 28 percent of the pay to which they are legally entitled—as a result of wage theft and that, together, Union Station food court employees are entitled to recover over three-million dollars in backpay and damages for the three years recoverable under the FLSA in case of willful violations. 

Meanwhile, the National Labor Relations Board issued the largest-ever complaint against Walmart this week for breaking federal labor law by violating workers’ rights. The complaint alleges Walmart illegally fired and disciplined nearly 70 workers, including those who went on strike last June to speak out for better jobs.

What the two cases have in common is the sense among corporations that they can break workplace laws—whether it’s wage and hour laws or employees’ right to organize—with impunity. The generally weak penalties for violating labor and employment laws represent the biggest obstacle to strong enforcement. Yet as the Department of Labor and National Labor Relations Board investigate and prosecute these cases, they must send the strongest possible message that violations of workplace rights are not acceptable.