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What is Wage Theft?: Rebecca Galemba on the Impacts for Day Laborers

Half a million Coloradans experience wage theft each year with workers losing $750 million in unpaid wages and benefits. However, despite this issue’s extremity, transparency and social awareness about wage theft are limited.

I recently spoke with Dr. Rebecca Galemba,  an Associate Professor at the Josef Korbel School of International Studies at the University of Denver, about the prevalence and impact of wage theft on day laborers in the Denver metro area. At Korbel, her research and teaching emphasize community-engaged work and interdisciplinary methods to enhance public good.  

Dr. Galemba spoke at TEDxMileHigh: Uncharted in March 2021, and her talk focused on her wage theft research and findings. Follow our discussion about how wage theft occurs for day laborers and potential solutions that the private sector and the government can provide to mitigate the adverse effects on workers’ livelihood, health, and sense of security.

Watch Rebecca Galemba’s TEDxMileHigh talk from TEDxMileHigh 2021 Uncharted Conference (her talk begins at 1:44:11).

Dr. Rebecca Galemba on Wage Theft in Denver

Every journey has a backstory. How did you become interested in wage theft?

I got involved with wage theft both academically and through activism on immigration issues. When I lived in Boston, I taught an immigration class, and I wanted my students to get outside of class and learn through practical experience, so the students worked with immigrant rights organizations. When I moved to Denver, I was looking for ways to get involved with similar initiatives right from the start.

The first thing I did was contact American Friends Service Committee (AFSC) because I was connected with them in Boston. They connected me to the nonprofit organization in Denver, El Centro Humanitario. They are a center for domestic workers and day laborers, which provides services and engages in policy and political advocacy.

I began collaborating with the worker center in collaboration with my courses. I teach a research methodology class at the Korbel School of International Studies, at the University of Denver, and we partnered with El Centro for community-engaged research projects.

Your research focuses specifically on day laborers, right?

Yes. My research focuses specifically on day laborers, most of whom are immigrants from Latin America who seek daily jobs for cash.

How do job contracts for day laborers work; can they range from as short as a day to months?

Yes, most day-laborer jobs are as short as a day, but the end goal for most of them is to turn the day job into a longer-term opportunity or repeat jobs. Sometimes, day laborers are able to find a summer-long project that started out as a day job, but other times, day laborers are undercut because the employer exploits them by paying inconsistently. This is where you see a lot of wage theft.

Are day laborers disadvantaged in the free-market system? Since employers can find someone who is willing to work for less, if an employee brings forward a complaint, is the employer quick to dismiss them?

Yes. Employers can find people who are willing to work for less. Those individuals could be more recent arrivals, or they might be desperate for work. There is a tension between solidarity of people trying to boost each other up and establish wage floors and a market that is inherently competitive. That’s why El Centro tries to implement more transparency by instilling specific agreements and requirements. 

On the other end, if labor laws implement stronger regulations that a lot of employers can’t meet, would that inadvertently hurt day laborers who are looking for jobs?

I think it’s more likely to upgrade the market. Day laborers tend to work in competitive low margin industries where there can be few ways small players can make money, so they often squeeze labor.  If regulations are enforced, the playing field can shift when their competitors have to do the exact same thing.

The problem is largely that the regulations are not enforced and the penalties for getting caught are often lower than the cost savings from exploitative practices.

Through your fieldwork, did you run into the issue of day laborers encountering barriers to healthcare access? Did they delay urgent medical care?

Yes, there are several instances of workers laboring through injuries and health conditions. In many cases, we saw workplace injuries, which the employer is supposed to cover, but a lot of the time the employer will avoid their responsibilities.

Once, we observed a case where a worker had fallen from a tree and broken several ribs. The employer was liable. The worker took the case to court and even got a judgment in his favor. But, the problem was that we couldn’t find the employer so he could never recover his settlement.  The worker would still come out to the street corner and take off his brace so that he could get hired. He needed the work and money to pay his rent and support his family.

What kind of industries are more prone to instill such violations?

It varies by state, but certain industries are more prone nationally. In some states, restaurants are the biggest violators, but in Colorado, construction has contributed the largest share of wage and hour violations.

Is the fear of retribution contributing to workers’ hesitancy to seek legal action? 

There are varying levels of retaliation and retribution. People are nervous that they’ll get fired, be reported to immigration even though this is illegal, given an undesirable schedule change, etc. At the end of the day, it’s the opportunity cost for the workers. Many times, workers are short-changed small amounts of money.

For many workers, they cut their losses and move on, but for others, a $50 short-change means that they couldn’t pay the motel that night and are sleeping on the street.

What kind of legal support or resources are available for day laborers?

There are very few resources available for unauthorized workers. There is a saying that they are over-policed by the law and under-protected by its more protective provisions.

But U.S. wage and hour laws cover anyone in the United States regardless of immigration status under the Fair Labor Standards Act. However, there are exemptions and exclusions to coverage, which is why you will see lots of employers classify their employees as independent contractors to avoid covering them as their employees.

While immigrant workers can pursue claims under wage and hour law, most immigrant workers don’t have the time and resources to pursue these claims.

But, there are pro-bono legal services they can access, right?

Yes. One in Colorado is Towards Justice. They do free-legal intakes, and they’ll advise workers of their best options. They also have a growing network of pro bono and low-cost attorneys. Class action cases are the best because it lowers fear of retaliation when individuals do not have to each come forward. But sadly, many day laborers’ cases cannot be easily aggregated.

In terms of short-term solutions, what kind of role can private companies play?

There is a big role for the private sector. Some of the biggest advocates who are pushing forward legislation have been businesses who don’t want to see themselves cheated out of the marketplace.

Are there any specific industries that are stepping up their efforts to improve the status quo?

The restaurant sector with the Restaurant Opportunities Center United, which works to promote high road establishments. They also have an app where you can search the restaurant name and find information about how it treats and pays its employees; it also awards good actors.

Do you think such business models can help provide incentives to other sectors to take similar actions?

Yes, rewarding businesses that step up, in addition to punishing the bad ones, is a role that the private sector can shoulder. Can you shame the bad ones but highlight the good ones? We grappled with this question a lot.

In Colorado, it used to be hard to shame the bad actors because the Colorado Department of Labor couldn’t release who violated the law, but after the Wage Theft Transparency Act was passed in 2017, they can publish this information. The benefit to this is that if we know which industries are violating, resources can be targeted to inspections to make sure they’re complying. For example, nail salons in New York, and car washes in Los Angeles became vectors for increased inspection after rampant abuses and violations were recorded.  

Currently, there is a proposal in Denver to have a wage bond in the construction industry. Thus, even if the worker doesn’t get paid, or the employer can’t/won’t pay them, there is a fund so that workers can still collect their money.

What are some potential longer-term solutions?

There are currently many gaps within federal laws, and that’s why state and locals have filled them in. Obama boosted staffing levels for the federal Department of Labor and got them back to basically where they were in the 1980s prior to cuts. That just shows how severely it was undercut, especially as the number of workplaces to monitor has dramatically increased over this period.

Meanwhile, the immigration enforcement budget has ballooned. When the two systems collide, what do you think happens? They aren’t meant to infringe on each other, either, but they often do.

Potential longer-term solutions include, first, bolstering funding for federal and state departments of labor and making them more proactive than reactive—now they largely depend on people to come forward individually. Second, making resources more accessible to everyday people, and third,  adapting laws to the changing nature of work. 

What is the next step for your research?

My research on wage theft has been on the public level from the start; I’ve been involved in policy groups at the local and state levels. But, now I’m transitioning into writing for academic audiences. I’m writing this up as a book right now, actually.

One next step I am thinking about is to look at some of the effects of COVID-19 on day laborers. Periods of precarity have impacts on long-term income and health, and COVID is likely to aggravate other forms of vulnerability over time. We are also interested to explore how organizations can support workers holistically, as whole individuals.

What message do you hope to deliver to the wider community? 

I want people to see that while wage theft impacts many people, it impacts the most vulnerable even more, whether that be immigrants, women, people of color, international students, or farmworkers. It impacts many more people than immigrants; wage theft is just a symptom of the kinds of precarious work that have become increasingly prevalent.

Thank you for your time. I hope your talk reaches many people!

Thank you, too!

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