Wage theft is growing dramatically (as recent Newstips have indicated) — some advocates describe it as an emerging business model in an economy increasingly dependent on contingent labor — but weaknesses in Illinois law allow many employers to get away with it.
On Monday, state legislators and labor and community groups will announce legislation to increase penalties for employers who steal wages and remove obstacles to enforcement of wage law in Illinois.
State Sen. William Delgado (D-2) and State Rep. Lisa Hernandez (D-24) will be joined by workers who have experienced and fought wage theft and their supporters in the Just Pay For All Campaign at a press conference (Monday, March 8, 1:30 p.m., outside the Thompson Center, 100 W. Randolph) to announce the introduction of SB 3568.
The bill would amend the Illinois Wage Payment and Collection Act to establish an administrative hearing procedure under the Illinois Department of Labor for wage theft claims below $3,000, and would allow employees to recover legal costs if they file successfully for unpaid wages in civil court.
Smaller wage claims often fall through the cracks of the existing system, said Chris Williams of the Working Hands Legal Clinic, which handles many such cases. He said that of 10,000 wage claims filed with the Illinois Department of Labor last year, 75 percent were for amounts under $3,000, and half were under $1,500.
Currently the labor department can investigate wage theft claims and make determinations but has no enforcement power; that requires a separate, potentially costly court action by the attorney general’s office. And private attorneys must rely on contingency fees, which don’t cover costs in smaller cases.
(Working Hands takes wage theft cases as part of its mission as a nonprofit legal clinic supporting workers centers which organize low-wage and contingent workers, Williams said.)
The bill would also bring the state’s wage payment law into line with other labor law which allows workers to sue individual owners, in addition to companies, in order to recover wages. In part this removes barriers to enforcement established by the Illinois Supreme Court in a 2005 decision (Andrews v. Kowa Printing), which required employees to prove “knowing violations” by owners.
“This would be a big advantage when a company goes into bankruptcy,” said Williams, citing the Duraco case (recently reported here) in which “two brothers who are robbing the people who worked for the company are hiding behind [bankruptcy] reorganization.” Working Hands recently filed suit on behalf of former Duraco workers, claiming hundreds of thousands of dollars of unpaid wages.
The bill would also increase penalties and fines, including criminal penalties for repeat offenders, and establish a Wage Theft Enforcement Fund paid for by fines and fees. It would add a penalty of 2 percent a month when back wages are paid, to “eliminate forced interest-free loans” from workers to employers, Williams said.
The bill was initiated by the Working Hands Legal Clinic along with others in the Just Pay For All Campaign, including the Chicago Workers Collaborative, Immigrant Workers Project of South Chicago, and the Latino Union of Chicago. Several labor and immigrant groups are endorsing the bill.
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