Lost Wages Can Come Back

Missing Pay a Problem for Many

The Northwest Arkansas Workers Justice Center in Springdale recovered more than $500,000 in back pay for low-wage workers in the last five years, according to its records. Then the calls for help from professionals and business owners started coming.

“That’s when I realized this is a problem for everybody, not just for people in low-wage jobs whose first language isn’t English,” said Ana Aguayo, associate director of the center. “We’re set up to help low-wage workers, to be an advocate for them, but then others started calling after we settled some cases and recovered some wages. The problem crosses all social, language, class and income lines.”

The problem isn't a simple one of good workers versus bad employers or vice versa, either, said Daniel Faulkner, attorney for the state Department of Labor. The department recovered $605,980 for workers in unpaid wages and overtime in the fiscal year that ended June 30, according to state records.

“There are such things as honest disagreements,” he said. “We’ve been able to come to an agreed-upon settlement in a lot of cases.”

Workers who successfully pursued claims include William Ivey, a Missouri resident who has worked in Arkansas. Ivey was assisted by the state Labor Department.

“I was owed $1,300 and settled for $500, which isn’t $1,300, but a heck of a lot more than nothing,” Ivey said. Ivey praised the Labor Department: “At one point I wanted to drop the whole case, but Faulkner wouldn’t give up,” he said. “I’m a lot better off because of that.”

The Problem’s Extent

The center and groups like it help address wage issues nationwide, Aguayo said.

“There’s nothing about this problem that’s unique to Northwest Arkansas,” she said.

The best research shows 26 percent of workers working for the federal minimum wage get paid less than that, said Annie B. Smith of the University of Arkansas School of Law. Smith served as a public defender in New Jersey, where she represented unpaid wage claimants among other workplace disputes. The best study of the subject, she said, is a 2008 survey of 4,387 low-wage workers. The study was chiefly paid for by several nonprofit foundations, including the Ford Foundation, the John Randolph Haynes and Dora Haynes Foundation, the Joyce Foundation and the Russell Sage Foundation.

Of those workers paid less than the federal minimum, 60 percent fell short of that minimum by $1 an hour or more, the study found. One-fourth of the workers surveyed worked overtime in the work week surveyed, yet three-quarters of the workers owed overtime pay received less overtime pay than they were entitled to.

Twelve percent of workers in jobs in which they receive tips had at least some of their tips taken by employers or a supervisor. That particular problem appears to be getting worse as more people pay for meals out with debit cards.

“Tip in cash,” Smith said. “That’s one thing everybody can do.”

The problem is bigger than just unpaid wages, Aguayo and Smith said. Add in unpaid health and safety benefits, payments into the workers compensation system, and taxes, they said.

“If an employer is not paying the full wages that are due, it’s unlikely he’s making the proper withholdings: unemployment insurance, taxes and the rest,” Smith said. “That means his employees are not contributing their full share while other businesses are.”

“It punishes good companies that follow the rules,” Smith said.

What To Do

Without question, the best thing a wage-earner can do to protect himself is keep records — any records, according to Faulkner, Smith and Aguayo. Notebook jottings of hours worked, where they were worked and the pay rate are vital to these cases.

“By law, your employer is required to keep records,” Faulkner said. “The thing people don’t know is: If your employer doesn’t keep those records, the court accepts any records you keep as accurate. If the courts didn’t do that, there’d be no consequences for an employer who didn’t keep any records at all.”

Smith, who represented workers in such cases, strongly agreed.

“Keep any papers you get from an employer,” she said. Also, keep addresses where work was done, names and telephone numbers of supervisors and co-workers, and witnesses.

Businesses that get in a situation of owing workers money “often don’t keep great records,” Faulkner said. “The simplest information, like where you worked and what time, can help you find witnesses to support your case,” Faulkner said. “Things like license plate numbers of the vehicle your employer drives or the name of the bank when he pays you by check can help us locate him and his bank accounts.”

“Getting a judgement in your favor isn’t the hard part. Getting the money is,” Faulkner said. “You can garnish bank accounts in these cases. That’s what makes a copy of a check with his bank and an account number on it the filet mignon for cases like these. If you see your employer go to a bank and use the automatic teller there, make a note of which bank it was.”

“I tell people to keep folders for each month, and put anything related to your work for that month — pay stubs, work orders, notes you make — into those folders,” Faulkner said.

“There’s another thing: People sometimes go to work for days or weeks without getting paid,” Faulkner said. “When you ask them why they did that, they say ‘I’ve got to have a job.’ Well, that’s true, but if you’re not getting paid, it’s not doing you any good. You can stay home and not get paid too.”

Locally, the justice center has helped recover $580,897 in owed wages as of March. That covers 360 cases in the last five years, Aguayo said. Workers would have less need of recovery if they knew their rights and asserted them more, she said.

Many members of Northwest Arkansas’ large college student population don’t know what the current minimum wage is, she said.

“I give presentations to students and ask them, what is the minimum wage? If anybody answers at all, they’re just guessing. People don’t know, and that’s the root of the problem. People don’t have a basic knowledge of their rights.”

“People shy away from hard questions about anything, and asking about pay you’re owed is no exception,” Aguayo said. Asking tough questions is harder when you don’t know yourself what you’re really owed, she said.

The relationship between a worker and his business owner is very often personal and close, especially true in small businesses, Faulkner said. Confronting an employer you consider a friend is something many workers find uncomfortable, he said.

At the other extreme, there are often cases where workers barely knew the person who hired them for some temporary job, Faulkner said. Faulkner represents workers in wage claim cases. “The department basically pays for your lawyer in cases like this,” he said.

Nothing is guaranteed in these cases, Faulkner said.

“Sometimes, the money’s just not there. If the business has gone under, sometimes there’s no money to recover.”

Stronger penalties would help, Smith said.

“You can steal a candy bar and get arrested, but not pay somebody for five weeks of work and not go to jail,” she said.

At A Glance

Where To Turn

• Arkansas Department of Labor, 501-682-4500; 10421 West Markham Street, Little Rock, AR, 72205; www.labor.ar.gov/Pages/default.aspx (wage claim links are in the left-hand column)

• Northwest Arkansas Workers Justice Center, 479-750-8015; 207 W Emma Ave., Springdale, AR 72764; www.nwawjc.org/

Web Watch

Related Reads

• "High Cost of Being Poor," http://articles.washingtonpost.com/2009-05-18/news/36823675_1_poverty-line-middle-class-milk

• Unpaid Wages and Benefits Study, 2008, http://nelp.3cdn.net/e470538bfa5a7e7a46_2um6br7o3.pdf

Upcoming Events