Report: NC employers stealing $316 million per year from employees; Labor Commissioner faulted

A bedrock principle of private property is that stealing is wrong. Yet the problem of employers refusing to pay their workers the wages they’ve earned—or wage theft—is pervasive and growing in North Carolina. That’s the message of Employers steal billions from workers’ paychecks each year, a report recently released by The Economic Policy Institute.

This report looks specifically at employers’ failure to pay the minimum wage to their employees at in the 10 most populous states, including North Carolina, and reveals the magnitude of the impact of wage theft on the low income workers who are least able to withstand it. While other types of wage theft are also harmful – non-payment of overtime wages and illegal deductions, for example – minimum wage violations are a direct hit to low income workers who rely on their wages to meet basic needs.

Workers in the food and drink industry suffer the highest rates of minimum wage violations, followed by agricultural workers (some of whom are not covered by minimum wage laws), leisure and hospitality, and retail workers. Unsurprisingly, women, young people, people of color, non-citizens, workers with lower levels of education, unmarried, workers, and workers without the protection of a union contract are disproportionately affected, though that is primarily because they are also more likely to be low wage workers.

EPI found that 12.3% of low wage workers in North Carolina who are covered by minimum wage laws are not receiving minimum wage—and they’re losing almost a third of the wages they are due. This is the third highest average loss among the states studied, just behind Texas and Pennsylvania.

The researchers attribute this in part to a lack of political will to enforce the law:

“The severity of minimum wage violations in North Carolina may come as less of a surprise given that the state’s elected labor commissioner during the period studied showed little interest in enforcing wage laws. An investigation by The Charlotte Observer noted that during the commissioner’s 15-year tenure, her office “sued companies for failing to pay wages only 35 times, an average of less than 2.5 times a year” (Locke 2015) [See The Reluctant Regulator].…

It is noteworthy that in all three of these states—Texas, Pennsylvania, and North Carolina—the binding minimum wage is the federal minimum wage of $7.25. The particularly large lost wages for wage theft victims in these states, despite the relatively low value of the minimum wage, raises questions about these states’ legal framework, penalty structure, and enforcement practices for combating wage theft. To the extent that these states are deferring enforcement to federal authorities, they may be placing their state’s most vulnerable workers at risk of particularly harmful labor practices.”

EPI advocates for greater enforcement, higher penalties, and better legal protections against wage theft and retaliation to combat this pervasive problem.