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Editorial: Spokane to punish wage theft; state should do more

Thu., Aug. 13, 2015

The Spokane City Council’s adoption of an ordinance that clamps down on wage theft reminds us of a similar bill the Legislature should have passed.

The city ordinance, which passed on a 6-1 vote Monday night, highlights the problem of employers failing to pay agreed-upon wages for services rendered, or otherwise flouting labor laws, including those covering the minimum wage and overtime. Under the ordinance, the city could deny or revoke the business license of an employer found in willful violation.

The problem is bigger than many people realize because the victims are generally in low-wage industries where they are vulnerable to retaliation. They fear being fired or punished if they file a complaint with state Department of Labor and Industries, so they may not speak up.

But, as state Attorney General Bob Ferguson has noted, the U.S. Department of Labor collected over $280 million in back wages on behalf of some 300,000 workers in 2012, which was more than twice the amount stolen in bank, convenience store and gas station robberies that year.

Bank robberies make headlines. Wage theft does not.

Millions more dollars are uncollected because the crimes aren’t reported or enforcement is lacking. The state gets 5,000 complaints per year, but has only 16 investigators. A 2014 U.S. Department of Labor study of New York and California shows that up to 6.5 percent of workers received less than the minimum wage. If the violation rate were just one-half that across the nation, more than 2 million workers would be affected.

Assistant City Attorney Matthew Folsom says the average worker loses 15 percent of income due to wage theft.

City Councilman Mike Fagan, the lone no vote, said he was bothered by the provision that spotlights employers who retaliate against illegal immigrants by reporting them to authorities. It’s true that such workers aren’t supposed to be in this country and that employers shouldn’t hire them. But pretending this doesn’t occur exposes the workers to exploitation. The ordinance provides an extra disincentive for such hires.

Last session, the Legislature tried to crack down with a bill that banned repeat violators from bidding on state contracts. Three percent of repeat violators vie for such work, according to the state attorney general’s office. Currently, the state spends billions on public projects, but doesn’t track whether bidders follow labor laws. It should.

A bill that passed the House would’ve allowed employers one willful violation and then barred them from bidding on state contracts. But the bill languished in the Senate and wasn’t put to a vote.

Lawmakers should revive that bill and consider hiring more investigators. Otherwise repeat violators may see their lawlessness as an acceptable cost of doing business. That isn’t fair to workers or competitors who abide by the rules.