The Oregon Bureau of Labor and Industries has failed to collect nearly $5 million in wage theft claims from employers since 2015, according to a new analysis from InvestigateWest. It also found that employers in industries with more low-wage and undocumented workers, like construction and agriculture, left more wages and penalties unpaid. Kaylee Tornay, investigative reporter with InvestigateWest, joins us to discuss her findings.
Note: This transcript was computer generated and edited by a volunteer.
Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. We turn now to wage theft. It’s the job of the Oregon Bureau of Labor and Industries to investigate claims of wage theft and, if they’re substantiated, recover the money. Since 2015, the agency has ordered employers to pay about $12 million in back wages and penalties, but almost half of that was never recovered. That’s according to a new analysis from InvestigateWest. Kaylee Tornay is an investigative reporter with the nonprofit news source, and she joins us with more details. Welcome to the show.
Kaylee Tornay: Hi, Dave. Thanks. Glad to be here.
Miller: It’s great to have you on. I want to start with the basics. What happens when someone files a wage theft claim?
Tornay: Investigators with the wage and hour division, at Oregon’s Bureau of Labor and Industries, process the claim and begin to look for evidence from the worker who filed the claim. They’ll also be in touch with the employer to notify them that there is a claim against the business for unpaid wages. They use that evidence and interviews to determine whether wages are in fact owed to the worker. Then they begin the process of communicating with the employer about how that claim can be resolved. And it can go a lot of different directions at that point.
Miller: What industries are the biggest offenders?
Tornay: For biggest offenders, the biggest was actually a really large kind of catch-all term of ‘miscellaneous business services,’ which can include a lot of different industries from landscaping and janitorial work to, I think, a lot of administrative support services. We also saw high rates of wage theft in various aspects of the construction industry and restaurants, cafes, those sorts of businesses as well.
Miller: The big number that stands out from your reporting is that about $5 million in unpaid wages and fees, that the agency ordered to be paid back, were not paid. What are the most common ways that employers get out of paying this money?
Tornay: Yeah. There are really a variety of ways, and it kind of depends on what sort of employer you’re dealing with. Sometimes it is a situation where the employer has gone out of business, and there’s no longer income coming in. Often those are cases where final paychecks either bounced or were never sent to the worker after they were laid off or terminated. So bankruptcy and the closure of a business are pretty common issues that lead to the worker not ever receiving money from the employer at least. But other times the bureau is dealing with employers that know how to, in essence, hide their assets, their income, their property from being able to be seized upon, even though they still possess it. They know how to change the business’ name, move either across state lines or move the business. So there’s kind of a variety of ways that an employer can hide their assets as well, even though they may still be getting income or have something that could be seized upon to help make a worker whole.
Miller: If the company doesn’t pay this money, are employees ever made whole?
Tornay: There are definitely situations where workers can still get their money, and that is because of the wage security fund. Oregon has a pretty robust and healthy wage security fund, which was established in the ‘80s to make workers whole, specifically in these situations when an employer goes bankrupt, and they really have no ability to pay. Oregon has also changed its policies around the wage security fund, where more workers are able to access it now, even if the employer is still in operation. BOLI [Bureau of Labor and Industries] has the ability to use the wage security fund to make the worker whole, even while they go about still trying to collect on the debt. It just means that the worker doesn’t have to wait as long because that often is enough to make someone want to drop their claim, basically.
Miller: You know something important, if depressing, which is that Oregon is not alone in having a high percentage of uncollected wage theft claims. What does the national picture look like?
Tornay: Yeah. We referenced one analysis in our reporting that was done by Politico, which looked at about 15 different state agencies. Their rate was right in line with Oregon’s, where about 41 percent of owed wages and penalties were being collected, and the majority – 59 percent – was not being collected. So this is a really common part of enforcement of wage and hour laws that remains really difficult for labor agencies to improve upon basically.
Miller: I want to turn to steps that some states are taking to improve their own processes of recovering this money. What’s happening in New Jersey?
Tornay: Yeah, New Jersey passed a pretty aggressive series of laws, I believe it was in 2019 for New Jersey, that allowed the state to revoke business licenses over unpaid wage theft. It also added criminal penalties, where employers can even be prosecuted, pay fines, even face jail time for wage theft. So that is a pretty strong piece of legislation. Certainly the criminalization of wage theft – there’s disagreement about whether that’s a good idea or not, but it’s a direction that some states like New Jersey have moved in.
Miller: What about Washington State? What did lawmakers there do in 2021?
Tornay: We talked about Washington’s embrace of what’s called a pre-judgment wage lien. Basically the lien is something that workers can get on an employer’s property, their assets, even before a final judgment on their claim is issued because a judgment can take a while, sometimes months, sometimes weeks. What that lien does is keeps the employer’s property from being able to just be sold off or hidden in the same way so that if the worker gets a judgment in their favor, they have a higher likelihood of being able to actually use the employer’s assets to be made whole. So it just kind of prevents those assets from being hidden during that lengthy process of the judgment and collection.
Miller: Are there efforts underway right now to give Oregon’s labor laws more teeth?
Tornay: There’s definitely legislators who are engaged on the topic. We spoke with Representative Paul Holvey from Eugene, and I know he’s really engaged on the topic. We looked at a bill that he had introduced in the past legislative session which dealt specifically with contractors and subcontractors in the construction industry and the idea of contractors being able to be liable for any unpaid wages and wage theft by any of the subcontractors they hire, which Representative Holvey told me is the case when it comes to prevailing wage rate cases, sort of a separate issue. But that bill didn’t get… It passed the House, but then during the walkout of the Senate and those weeks the bill ended up dying in the Senate. So, he told us that he’s working with colleagues in the Senate to introduce that bill again in the 2024 session and to introduce it in the Senate because there’s a greater likelihood that it will pass the House once it passes the Senate since it’s done so in the past.
Miller: You did note, speaking of the criminal side of this, that since March of 2022, BOLI has had an agreement with the Multnomah County District Attorney’s office to explore criminal prosecutions of wage theft. But as of October of this year, that office, the DA’s office, hadn’t brought any cases. Why not?
Tornay: That is a good question. To be honest, I did not get a chance to ask the District Attorney’s office that question, and BOLI didn’t really speak to it. But I feel like that is a good thing to follow up on for some future pieces. We’re planning to write some more about this topic, so maybe that’s a stay-tuned question.
Miller: Alright, I will stay tuned for that. You do point out that there’s been an increase in wage theft claims in recent years. Did anyone you talked to have an explanation as to why?
Tornay: Yeah. The administrator for the wage and hour division, who was very helpful in explaining a lot of what was going on in this data and the rules and laws around this topic, told me that a couple of years ago when the pandemic, early days of the pandemic, the filing form to file a wage claim… I can’t remember if there was any version to do it online before, but they basically made it easier to file a claim online, rather than having to do it on paper or in person or something like that. So the form is very accessible now to workers, which is a good thing obviously for workers that are looking to recover their wages. It’s good that that’s accessible. But they have seen a marked increase, and at least part of that they think is attributable to just the fact that the claim form is easier to access for workers now.
Miller: But at the same time, you reported that Oregon’s staff of wage investigators decreased between 2000 and 2019, and we have something like half the investigators per capita that Washington has. What does that mean in terms of just their ability to do investigations?
Tornay: If we think about it logically, with one investigator who is, in theory, responsible for looking out for 200,000 workers in Oregon, that is going to necessarily mean someone is having a lot more on their plate, just in sheer volume of wage claims. From what I was told by the division administrator, that does have an effect on the extent to which these investigators and BOLI staff can be creative about trying to go after these wages. It’s important for me to note that collections, once they’ve gone through the whole process, and we’re at the point of collecting on debt, that is the Department of Revenue that handles it at that point. But BOLI is still involved with the claim up until that point, and there’s a person who monitors collections and how things are going with the Department of Revenue. All of that to say that it absolutely makes a difference on how much attention each wage claim can get when you have so much on your plate.
Miller: The bottom line here is that many employers in Oregon are getting away with not paying their employees for work their employees have done. What did you hear about what that means for employers who are playing by the rules?
Tornay: It really puts them at a disadvantage because it’s going to be cheaper for me, as an employer, to provide my goods and services to a customer if I know that I’m not gonna be paying my workers everything that they’re earning, as opposed to an employer that does comply with wage and hour laws. It’s going to affect their ability to compete. So that’s definitely a big piece of this. In addition to the impacts that it has on workers when their employers aren’t going to be held accountable for wage theft, it also affects the employers who are striving to be in compliance with these laws and want to be fair to their workers. It puts them at a real disadvantage.
Miller: Kaylee, thanks very much.
Tornay: Thank you.
Miller: Kaylee Tornay is an investigative reporter with InvestigateWest. It’s a nonprofit news outlet covering the Pacific Northwest.
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