“Although DLI has the ability to go after business that pay people under the table and fail to keep pay records, our experience is that they rarely do,” Hollander says. “We have been told by investigators with DLI that when an employer lacks records for an employee, and that employee complains of wage theft, DLI generally chooses to not pursue the case.”
Employers, of course, are required to keep these records — a regulation that the DLI is supposed to enforce, too. But if they don’t, the wage-theft claimant is likely out of luck.
The exceedingly limited aid the city offers victims of wage theft is encumbered by similar issues. Lance Haver, director of consumer affairs for Philadelphia, is the beginning and end of the city’s wage-theft response. (“There is a state agency that is supposed to regulate this, but it often does not,” he notes.) Haver says he can’t help those who work under the table, but often puts in calls to employers if a seemingly legitimate complaint is made. Although he has no enforcement authority, “often just the fact that the city is involved is enough to get them the money they are owed.”
If that fails, Hayer suggests workers contact DLI or hire a lawyer. “I don’t have the resources to do anything other than advocate for the rights of the individual,” Haver says. “I don’t have the ability for a systemic solution.”
There are several private lawyers in the city who take wage-theft cases, but they usually take only very large individual cases or larger groups of workers from a single workplace to maximize the claims.
In the past, unionization was a strong option for workers who wanted to defend against employer abuses. During the 1950s, within the now theft-wracked restaurant industry, 25 percent of America’s waitresses were unionized. Today, just 1.5 percent of food-service workers are organized. There are few remaining unionized independent restaurants in greater Philadelphia: the stadium-adjacent McFadden’s, Hymie’s Deli in Lower Merion and the Pen and Pencil Club, for example. Now, organizers tend to focus their efforts on the industry’s biggest employers, like food-services provider Aramark.
Nontraditional worker organizations provide an alternative to unions, but in Philadelphia there are only two options: the Taxi Workers Alliance of Pennsylvania and the Restaurant Opportunities Center (ROC), which is barely a year old.
Fabricio Rodriguez, lead coordinator of the Philly chapter of ROC, says it now has 300 members, who each pay $5 a month in dues. But ROC is not a union and does not bargain. Instead, it tries to reform the industry, and runs classes in table service and English as a second language. Rodriguez is planning to start a health-care maintenance cooperative within the year, to ensure members access to preventive care.
Last year, ROC worked with Councilman James Kenney to formulate and pass a law banning restaurants from deducting funds from credit-card tips to pay processing fees. But Rodriguez says he knows of no other legislative proposals related to wage theft, though Councilwoman Maria Quiñones-Sánchez “regularly asks us how wages are being stolen.”
Harrisburg’s current political composition makes a successful statewide bill unlikely. But in Philadelphia, the lack of legislative action seems like a gross oversight in a city with a poverty rate of 25 percent and a revenue stream to match.
The fact is, legislative models do exist. In recent years, Seattle and Miami passed anti-wage-theft ordinances, while Madison, the District of Columbia and San Francisco have bulked up enforcement.
The wage-theft law passed in Florida’s Miami-Dade County in 2010 is one of the nation’s most compelling. It allows workers to contact the Department of Small Business Development with wage-theft complaints, and requires employers to answer those complaints with documentation. If the case cannot be settled, it goes to an administrative hearing. If the employer is found guilty, he or she must pay back the original wages and damages worth twice the original amount to the employee and administrative costs to the county.
The Miami-Dade ordinance’s annual budget is a mere $75,000, but the county has already reclaimed more than $1 million for workers, with almost $2 million in additional claims pending. A project with a similar budget in Philadelphia could pay for itself many times over in reclaimed wage-tax revenues. Wage theft is already illegal. Such a law would ensure that it pays for criminally inclined employers to remember that.
