Report: Wage Theft is Rampant in Pennsylvania

By the end of this week, 400,000 Pennsylvanians will have been illegally deprived of between $19 million and $32 million due to wage theft. That’s a lot of money that could have been spent on rent and groceries, and not to mention, taxes.

Wage theft is the illegal refusal to pay, or the underpayment, of wages due. It is rampant across a broad range of industries, and often happens in hidden or incremental ways that add up to big numbers. Sometimes wage theft occurs when employers refuse to pay overtime hours. It can mean asking employees to do work before or after they clock in for the day.

Sometimes wage theft is hidden in paperwork, such as purposefully misclassifying an employee as an independent contractor when they should be a full-time employee, undercounting worked hours, or taking  illegal deductions from a worker’s paycheck.

A new report out from the Social Justice Lawyering Clinic at the Stephen and Sandra Sheller Center for Social Justice at Temple University Beasley School of Law reveals just how pervasive wage theft is across Pennsylvania.

According to the report:

9 percent of workers are misclassified as independent contractors.

40% of those same workers report being asked to work off the clock without pay

Only 47% of Pennsylvania’s day care industry was in compliance with the federal wage and hour laws

On average, families lose 15% of their would-be paycheck to wage theft

Apparently it’s easy to steal from people in an industry like restaurant work, where 61 percent of Philadelphia’s workers surveyed didn’t know the state’s current minimum wage.

 

What can be done to stop wage theft in Pennsylvania?

Researchers provide several recommendations for stopping wage theft. The first one is to increase financial penalties on employers guilty of illegal wage theft.

From the report:

Employers have an economic incentive to commit wage theft because Pennsylvania law provides very little punishment for employers. Under the Wage Payment and Collection Law (WPCL), workers can potentially collect liquidated damages of $500 or 25 % of wages owed.

Pennsylvania’s Minimum Wage Act (MWA) does not provide for any damages to the worker.

By comparison, under federal law, workers can recover damages equal to their unpaid wages, and under the laws of other states, workers can recover double or triple the amount of their unpaid wages.”

In Pennsylvania, a bill currently under consideration would increase the penalties for wage theft. HB 250, sponsored by Rep. Patty Kim with bipartisan co-sponsorship of more than 60 state representatives, would raise the penalty for both wage theft and for retaliating against an employee for reporting said theft.

It has been sitting in the Labor & Industry Committee since February.

HB 250 is a part of the Agenda for Women’s Health, a legislative package of evidence-based bills designed to protect the health and economic security of women in Pennsylvania.

Click here to learn more about HB 250 and other Agenda bills.

Stay up to date on this topic and other policy related to the status of women and girls in Pennsylvania by following us on twitter and tumblr and liking us on Facebook.

 

-Tara Murtha, WLP Staff

 

 

 

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