Will the Trump Administration Make It Easier for Employers to Steal from Workers?

Andy Puzder, Donald Trump's nominee for labor secretary, comes from an industry where wage theft is troublingly common.

by Livia Gershon
Jan 13 2017, 3:52pm

Christian Gooden/St. Louis Post-Dispatch via AP

For nearly four years, Oliwia Pac has been working at O'Hare International Airport in Chicago, assisting wheelchair users and unaccompanied minors and sometimes providing security services for the airlines. When it comes time to get her paycheck every two weeks, she always worries about what she'll find. Over the years, she says, the company she works for has often played with her timesheets. For example, if she works overtime at security, a job that pays a base rate of $11.50, she says she'll find the hours listed under her wheelchair assistant position—which, because it's a tipped position, pays only $8.75.

When that kind of thing happens, says Pac, who is also an activist with Fight for $15, her managers make excuses. "I heard recently a co-worker who was supposed to be getting 30 hours of overtime didn't see any of that money," she told me.

Allegations of wage theft were widespread last year at O'Hare, and airport workers went on strike to protest low pay in November. But the sorts of abuses reported by Pac and her co-workers are common throughout the country—and the Trump administration is unlikely to do much about it.

That's a safe inference from Donald Trump's selection of Andy Puzder, the CEO of the company that owns fast food chains Carl's Jr. and Hardee's, as the next secretary of labor. (Puzder is one of many wealthy executives Trump plans to bring into his cabinet.) Some of the coverage around Puzder has focused on Carl's Jr. and Hardee's softcore-porn-adjacent burger ads, which harmonize so well with the Trump brand of American sleaze. But more troubling, given the power Puzder will likely wield after his expected Senate confirmation, is his company's own record on labor issues.

Over the years, Carl's Jr. and Hardee's have frequently been accused of failing to pay workers for all the hours they worked. When the Labor Department inspected the restaurants over the past seven years, it found labor violations 60 percent of the time, according to a Bloomberg analysis. In 2004, the restaurant's parent company, CKE, paid $9 million to settle class-action lawsuits alleging that managers weren't paid overtime they were due. CKE is currently beset by other lawsuits; in 2014, Puzder said CKE had spent $20 million in labor lawsuits over the previous eight years.

On Thursday, workers from the two chains, organized under the Fight for $15 umbrella, held demonstrations in more than 20 cities protesting conditions at the restaurants. "If Puzder is confirmed as labor secretary, it will mean the Trump years will be about low pay, wage theft, sexual harassment, and racial discrimination instead of making lives better for working Americans like me," said Terrance Dixon, a Hardee's worker who makes $9 an hour, according to a press release from organizers. 

Saru Jayaraman, co-director of the workers advocacy group Restaurant Opportunities Centers United, which recently surveyed several hundred CKE workers about their experiences, said many reported having their timesheets "corrected" to reduce their hours or being forced to clock out and then keep working.

"Managers are under pressure from the companies to keep labor costs low," Jayaraman said. "It's pervasive."

CKE certainly isn't the only labor law violator in fast food, or even the worst offender. But Puzder's confirmation would put him in the strange position of being in charge of enforcing rules that his industry has habitually bent. 

Wage theft is prevalent in the food-service world—where workers are often already struggling and rarely unionized—but it's common in all kinds of jobs, especially low-paying ones. This stuff is tough to measure because many people are afraid to report it, or don't even realize their employers are breaking the law, but a report commissioned by the Labor Department using 2011 government data on workers' wages found that each week more than 3 percent of all jobs covered by the minimum wage in New York and California failed to pay enough. That added up to between $22 and $49 million in lost wages every week in those two states alone. It also meant thousands of families were driven below the poverty line because their employers didn't pay the legal minimum wage.

That study only covered minimum-wage violations, not other employer violations, like failing to pay overtime. A 2008 report by researchers working in Chicago, Los Angeles, and New York that focused specifically on low-wage employees in those cities found that 26 percent of them were paid below the minimum wage in the previous week. Meanwhile, more than three-quarters of those who worked more than 40 hours weren't paid overtime.

Victor Narro of the UCLA Labor Center, one of the authors of the 2008 report, said that even though wage theft remains a big problem, the Obama administration has done a lot to improve things. In 2009, the Labor Department hired 250 new investigators, and Narro said the department has been smart about where it puts its resources, teaming up with organizations like his, and with state and local authorities, to target industries with troublesome practices.

"The last five or six years in Los Angeles, we've found very creative strategies," Narro said. "We were never able to do that under the Bush administration."

Jayaraman, whose group works with restaurants and customers to promote better pay and benefits, said the Obama Labor Department has also supported those efforts as well.

"I think it's really smart and strategic," she said. "I think a lot of good work was done."

A Puzder-helmed Labor Department is likely to roll back all sorts of other Obama-era worker-protection initiatives. It's almost certain to put the brakes on a rule change that would have made 4 million low-paid salaried workers eligible for overtime, and to make it easier for companies to classify employees as "subcontractors" to get out of their legal responsibilities as employers. Puzder is also loud opponent of raising the minimum wage.

Meanwhile, another likely Trump administration initiative, the proposed mass deportation of undocumented immigrants, will target a population particularly at risk for wage theft.

Nicolas, a Texas construction worker who asked me to use only his first name because of his legal status, said he's had wages stolen multiple times since he moved to the US from Guatemala 11 years ago.

"When I first came to the United States, I didn't know my rights," he said. "Because I didn't have any documents, I didn't feel I could go to the police or go to anyone and make a complaint."

In one recent case, a contractor hired Nicolas at $140 a day, but, after a few days, began stalling on making payments. Eventually, Nicolas left the job and went to the Austin-based Workers Defense Project for help.

Undocumented workers are legally entitled to the same wage protections as anyone else, so Nicolas was able to file complaints with local and state authorities. But with a new president who's declared war on undocumented immigrants, and who has his own record of treating contractors badly, Nicolas is worried about what lies ahead. "A person who steals from his workers and who says terrible things about undocumented workers—you can only imagine what's coming," Nicolas said. 

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