A Report by the Houston Interfaith Worker Justice Center (now the Fe y Justicia Worker Center), May 2012
In the city of Houston, second only to New York City in the number of Fortune 500 headquarters, which as an independent nation would rank as the world’s 30th largest economy, all of its residents should be able to prosper. However, as wage theft is becoming a defining trend of low-wage industries in the 21st century, Houston workers and businesses are being hard-hit with the dire consequences of this labor abuse. The repercussions of wage theft are city-wide and affect business owners, consumers, and workers alike.
This report explores the effects of wage theft on the individual, community, and local economy within the context of the city of Houston. It also provides an assessment of the current system charged with dealing with wage theft cases, and its many limitations in effectively providing solutions. Lastly, it analyzes the impacts of both of these variables in order to present policy recommendations for the City of Houston that will bring down wage theft and make the city a just and prosperous place to work.
Wage Theft is a Community Problem:
- Wage theft becomes a problem to the community as a whole because of: (1) the sheer prevalence and pervasiveness of wage theft; and (2) the individuals’ connection to the broader community undoubtedly has collateral effects on their families, the public, the taxpayer, the local economy and even other businesses.
- An estimated $753.2 million dollars are lost every year due to wage theft among low-wage workers. The consequences of this loss further depress working family incomes, resulting in decreased community investment and spending and limited economic growth.
- Over 100 wage and hour violations occur in Houston every single week, a conservative figure that still demonstrates the pervasiveness of wage theft in the city. Although it is prevalent in the Houston construction and restaurant industries, it affects all types of industries, especially low-wage work.
The System Charged with Wage Enforcement is Failing:
- Across the board, agencies and institutions – including the DOL’s Wage and Hour Division, the Texas Workforce Commission, the Courts, and community organizations – face many limitations, including understaffing, financial barriers (for both institutions and workers), and lack of enforcement and jurisdiction.
- As a result, many workers are left unprotected, either through exclusions from the law or financial barriers to reporting and pursuing wage theft cases.
- Weak employer enforcement and near non-existent consequences for violations make wage theft recovery increasingly difficult and also fail to deter future wage theft occurrences.
Houston has Many Opportunities to Bring Down Wage Theft through Community & Policy Action:
- Throughout the nation, communities have been resisting wage theft by implementing creative community actions and successfully pushing comprehensive policy solutions at the local and state levels.
- Houston can capitalize on successful models nationwide, as well as on its own local innovation, to create better wage theft prevention and recovery mechanisms based on the needs of the region’s industries and workers.
- The city can take action by facilitating wage claims and resolutions through an administrative hearing process, increase employer consequences to improve wage theft recovery and prevention, and strengthen worker protections against retaliation for reporting wage claims within the city.