Low-Wage Workers Suffer Financial Discrimination

New research suggests more than 90% of low-wage workers are denied worker's compensation for injuries, and almost 70% are cheated out of substantial sums of their paychecks. Annette Bernhardt, Policy Co-Director of the National Employment Law Project and co-author of the study, explains the findings and what can be done to protect low-wage workers.

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LINDA WERTHEIMER, host:

I'm Linda Wertheimer, and this is TELL ME MORE from NPR News. Michel Martin is away.

Coming up, a new book tells the stories of seven people who lived through Hurricane Katrina, but in the form of a comic strip. But first a study released yesterday tells a very bleak story about the way American business routinely treats low-wage workers. According to the study, employees who earn a low wage are regularly denied overtime and workers' compensation and are paid less than the minimum wage. The study was done last year, financed by four prominent foundations.

It surveyed over 4,000 low-wage workers. And in a New York Times article about the study, Labor Secretary Hilda Solis was quoted saying: "There is no excuse for the disregard of federal labor standards, especially those designed to protect the neediest among us. Today's report," she goes on, "clearly shows we still have a major task before us."

Annette Bernhardt is policy co-director of the National Employment Law Project and coauthor of the study, which is called "Broken Laws, Unprotected Workers." Dr. Bernhardt, welcome to our program.

Dr. ANNETTE BERNHARDT (Policy Co-Director, National Employment Law Project): Thanks so much for having me.

WERTHEIMER: Now, a lot of this information, I think, you know, will sound like something we already know, but I think that the magnitude of it is very surprising. I mean, some of these numbers are astounding. Only eight percent of low-wage workers receive workers' compensation when they're injured on the job. Why does something like that happen?

Dr. BERNHARDT: On the one hand, we definitely know that employers are actively trying to avoid paying workers' comp, and so one of the things we found in this study is that workers report that employers tell them don't file for workers' compensation. Here's some cash, you know, go to the emergency room. I just don't want to have to pay the insurance. And then employers also just retaliate. They say if, you know, if you're going to be injured, if you're going to be out of work, you know, I'm firing you.

WERTHEIMER: You also found that a large percentage of the workers you interviewed were paid less than the minimum wage for the week surveyed, and others reported that they had worked extra hours without pay.

Dr. BERNHARDT: That, I think, is one of the most astonishing figures, that more than a quarter of the workers were not paid the minimum wage. And, you know, one of the ways that this happens is in this part of the labor market, you see some really interesting pay arrangements, to put it nicely. A prep cook, for example, may have a job where he's paid $300 flat a week. Now he'll work between 35 and 50 hours, but he'll always get $300. And depending on the number of hours he puts in, he may drop below the minimum wage. He certainly isn't getting overtime.

WERTHEIMER: Dr. Bernhardt, who are we talking about, here? Who are the people who are most likely to be paid less than the law requires?

Dr. BERNHARDT: Some workers are more vulnerable than others, and especially women, people of color definitely had higher violation rates depending on which violation you looked at. This problem is not limited to unauthorized immigrants or even authorized immigrants. But our conclusion in the end is that pretty much everyone is at risk, here. If you work in one of these low-wage industries - this is about employers making active decisions to violate these laws, and those are very much shaped by the industries that they operate in.

WERTHEIMER: Did you find that this kind of practice was confined to small business or big business or both?

Dr. BERNHARDT: We did see that violations were often higher in smaller businesses, businesses with 100 workers or less. So that's not, you know, the tiny, tiny shops that people probably have in their mind as a stereotype. But even among big companies, chains, even national chains, we found one in six workers were paid below the minimum wage. And when workers in those companies, you know, put in overtime hours, almost half weren't paid the full overtime rate.

WERTHEIMER: I'm trying to do the math here. The study suggests that more than a quarter of the people who ought to be getting the minimum wage are not getting it. How big a chunk of the whole work force are those minimum-wage workers who are being abused in this way?

Dr. BERNHARDT: We estimate that in a given week, there are about 1.1 million workers in the three cities, New York, Chicago and L.A., who have at least one pay-related violation. And that amounts to a pretty big chunk of money that is being robbed. We estimate roughly $56 million a week in lost wages due to these practices. This is a lot of money, and it's money that is not going to these families. It's money that is not going to these communities. It's a loss both to these workers and to us as a society. So this problem is not going away, and if anything, we think it's just going to escalate.

WERTHEIMER: Annette Bernhardt, thank you very much.

Dr. BERNHARDT: Thanks so much.

WERTHEIMER: Dr. Bernhardt is policy co-director of the National Employment Law Project and coauthor of the study "Broken Laws, Unprotected Workers." She joined us from our bureau in New York City.

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