Kent-Ionia Central Labor Council, AFL-CIO

Growing and strengthening west Michigan's middle class

COLUMN: My personal encounters with wage theft

by Sean Egan

by Sean Egan

Sean Egan (IBEW 275) is the president of the Kent-Ionia Labor Council.

GRAND RAPIDS July 24, 2015– The term wage theft elicits images of some greedy corporate boss intentionally manipulating or violating the law to steal wages directly from workers.  Certainly sometimes this is the case, but my experience has been more that some small business owners just don’t know the law or follow an industry practice that is entirely wrong.

Personally, I dealt with this is in a small way about 20 years ago.  After returning from the Navy, I worked with a small house painting company for about a year.  Not knowing anything about the law at that time other than minimum wage, it was perfectly common to receive a 1099 instead of actual wages.  I didn’t provide any tools, didn’t bid jobs, and didn’t find my own homes to paint.  I showed up when I was told, used company tools and supplies, performed the tasks I was instructed to perform, and was paid an hourly rate for work but in the form of 1099 wages.  Certainly this isn’t the complete economics reality test, but looking back a 1099 was not appropriate. I was not self-employed. The 1099 allowed the employer to avoid workers compensation, unemployment insurance, and other taxes.

What I have learned since is that this is a common practice in the construction industry for all trades, especially in the residential construction market.  Further, we see most non-union employers in construction violating other laws, like Michigan’s prevailing wage, Davis-Bacon, overtime, and worker classification.  The two main tools used to violate prevailing wage laws are worker misclassification and using “bona-fide” fringe benefit funds to lower the wage– like the BCT supplemental unemployment benefit.

More recently, a family member started working at a restaurant, locally owned and having two locations, with the second not yet opened.  She has been training at the first location over the past several days. The owner has told her that employees are not paid during training, so she has been working for free. The training includes serving patrons, cleaning, stocking, and all the other things that would normally be assigned.  Further, the training is mandatory.  I only hope that this owner is simply wrong and not intentionally violating the law.

So what can you do if you encounter these issues?  Most people would probably just quit and move on to a different employer.  That was in fact my advice to my relative, while also suggesting that she call the U.S. Department of Labor, working with her co-workers to address the issues and thereby being protected by the National Labor Relations Act, or starting an organizing campaign under the National Labor Relations Act.  The difficulty in any of this of course is that most of us don’t differentiate between our boss and our rights.  Meaning, our boss is a nice enough person sometimes and we feel that raising these issues interferes with this relationship.  Or, our boss is a jerk, but that’s just the way it works.

However, the laws were put in place to prevent these abuses and ensure a level playing field for competition among business without impoverishing workers completely (although we’ve moved backward on that in this country).  These rights are important and we need to stand up for them, otherwise we hurt everyone.  So that means your employer is obligated to follow the law and we all have an obligation to raise our voices to protect our rights under the law.  Please join me and the many groups working on these issues next time you or someone you know gets hit with these types of employment problems.  Click here for more information on your rights at work from the AFL-CIO.

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This entry was posted on July 24, 2015 by in Local news and tagged , , , , .

Kent-Ionia Labor Council

The Kent-Ionia Labor Council, AFL-CIO is a coalition of west Michigan labor unions in Kent and Ionia Counties, based in Grand Rapids.

Address, phone, email

918 Benjamin NE
Grand Rapids, MI 49503
616-456-8233
info@KICLC.org

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