Wage theft rampant in California despite state’s strict industry laws; how you might be affected

Wage theft is a crime that has cost California workers an estimated $2 billion a year. You may be a victim and not even know it. In collaboration with CalMatters, a non-profit non-partisan political newsroom, we’re investigating wage theft in California.

Even though the Golden State has some of the strongest wage theft laws in the country, it appears state regulators may be violating state laws and failing the workers who need help the most.

In the first of a series of stories, we want to help you figure out if you are a victim of wage theft, and how you can get your money back.

SUMMARY:

Wage theft is a costly crime in California that impacts countless industries ranging from the car wash and construction industries to in-home health care and childcare, to the retail and restaurant industries.  The most common victims are low-wage workers – often women, immigrants, and people of color, like Eloisa.

“So for 17 years you never got a raise?” we asked Eloisa.

“Never,” Eloisa said in Spanish.

Eloisa shared photos of her kids, who were babies when she began working at a local Jack in the Box franchise 17 years ago. They are now grown and Eloisa relies on her daughter to drive her to work because, after 17 years of making minimum wage, Eloisa can’t afford her own car.

“[It’s] very difficult,” Eloisa said.

Eloisa, says she loves her job, but after 17 years of loyalty, while making minimum wage, she says she just learned she was legally entitled to take breaks.

“They didn’t even tell us about the breaks,” Eloisa said.

Wage theft comes in many forms. Maybe an employer asks you to work “off the clock,” takes your tips, or doesn’t pay you overtime or for missed breaks.

Eloisa estimates her unpaid wage claims over just the past three years would be enough to buy her own car.

So what is the cost of wage theft?

According to a CalMatters analysis of wage claim data from the Economic Policy Institute, historical claims indicate the average worker lost an annual equivalent of more than two months’ rent in California, nearly three months of childcare in California, or nearly a year’s worth of groceries.

They note, “a year of stolen wages used to equate to a year of groceries for a family of four, but not this year. According to the Bureau of Labor Statistics, now it would pay for only 75% of that typical family’s annual grocery bill.”

With or without inflation, any loss of wages is a significant impact for those, like Eloisa, who are trying to survive off minimum wage.

“For me, it’s a lot,” Eloisa said.

California has a long history of laws intended to tackle wage theft, though most of the laws only apply to specific industries.

There are systems in place to collect unpaid wages. One way is to file a claim with the state.

The Division of Labor Standards Enforcement legally has 30 days to schedule a conference with your employer, and 120 days to hold a hearing if you and your employer can’t agree.

But, according to a CalMatters analysis, last year the average wait for a hearing was more than twice that long — and that was for the cases that actually resulted in a decision.

There were still thousands of 2021 cases pending as of May 2022, and the data provided by the state was incomplete.

The DIR was unable to provide a response or additional data before our deadline, but a spokesperson tells us the agency does plan to provide additional information soon.

“Ultimately, we are passing these laws [to] protect workers,” said Assemblymember Ash Kalra. “And when the state doesn’t follow through, what kind of message does that send to the private employer?”

Kalra is co-sponsoring legislation intended to better protect restaurant workers. It’s the latest in a series of industry-specific wage theft legislation.

Other laws include protections for workers in industries ranging from gardeners and janitors to construction workers and the retail and garment industry. Last year California made most wage theft a criminal offense.

In 2020, the legislature agreed to increase funding and staffing for the Division of Labor Standards Enforcement after the agency acknowledged it was failing to meet the legal mandates.

But as of May, the Chief Deputy Director of the Department of Industrial Relations said nearly a third of the division’s authorized positions remain empty – and the backlog continues.

For people like Eloisa, accountability can’t come soon enough. She urges people to speak up and educated themselves – because if they don’t, nothing will change.

Neither Eloisa’s employer, an independent Jack in the Box franchise owner, nor the Jack in the Box parent company responded to requests for comment.

Eloisa is still waiting for an initial hearing in her case, but she’s optimistic she will get her wages.

Over the next several months, we’ll be working with CalMatters on a series of Wage Theft stories, and we want to begin by helping you figure out if you’re a victim — and how you can get your money back.

For details, and to share your story though the CalMatters form, click here.