California is Right: Stealing Workers’ Pay Should be a Felony

Laura Clawson

Thirty-one California workers will get more than $216,000 in overtime pay they earned but were cheated out of by their employer. But the Labor Department’s investigation and action against the Sacramento pallet manufacturer that employed the workers is a great example of why a company would break the law by not paying overtime to begin with. A recent California law provides hope for a fix, but only if the state can beef up its enforcement.

Martinez Pallets Incorporated and its owner, Miguel Arturo Cruz, dodged overtime laws by paying cash or using separate paychecks to pay workers their regular rate, rather than the time-and-a-half they were legally entitled to, for hours they worked over 40 per week. The company also violated child labor laws by having a 16-year-old and a 17-year-old operate equipment that’s considered too hazardous for minors.

In addition to paying the workers what they should have gotten to begin with, Martinez Pallets was fined not quite $14,500 for the overtime and child labor violations. Fourteen. Thousand. Five hundred. Dollars.

Why would a boss who doesn’t care about doing the right thing follow the law here, if all that happens when—or rather if—they get caught is that they have to pay what they owed to begin with, plus a $14,500 fine?

What’s even more appalling, though, is that $14,500 is a large fine for workplace safety violations. The median Occupational Safety and Health Administration fine for a fatality investigation is just $9,753, according to the AFL-CIO’s 2022 Death on the Job report. 

A teenager working on dangerous machinery can turn into a fatality too easily. Workers under 25 are more likely to be injured on the job than older workers, and in 2015, 403 teenagers—24 of them under 18—were killed on the job. Teenagers are killed in construction and farm jobs, but also while working in amusement parks, campgrounds, and swimming pools. That’s the context in which Martinez Pallets had minors operating woodworking machines and forklifts. (And do we really think the company that was dodging overtime pay laws was being extra careful about the safety procedures involved with minors illegally operating hazardous machinery?)

The fact that Martinez Pallets committed both wage and safety violations is a reminder that bad employers are usually bad in more than one way. And wage theft is hugely common in California. It costs workers an estimated $2 billion a year. Minimum wage theft, where workers are cheated out of even the legal minimum wage, cost the average victim $64 a week, or $3,400 a year, in 2015, the last year for which data is available. Adjusting for inflation, we’re talking about 12 gallons of gas a week or three months of child care a year. 

One woman who worked at a Jack in the Box restaurant for 17 years without a raise above minimum wage did not know she was legally entitled to paid breaks. She told CBS News she had learned that if she’d been paid for the last three years of the wage theft she experienced, she might have been able to buy a car. And while California passed a law making some wage theft a felony, the agency responsible for enforcement is short-staffed. 

You can be an opponent of mass incarceration and think that felony charges are absolutely the right answer for employers who intentionally and systematically cheat their workers out of pay, be it minimum wage or overtime.

It can’t be only the state of California putting teeth in wage and hour law. There should be a federal law criminalizing this. Of course, it would never get past congressional Republicans. But this should be part of the Democratic agenda for the day when the filibuster no longer stands in the way of every possible piece of pro-worker legislation. And other states with Democratic majorities should consider copying California’s law.

This blog originally appeared at Daily Kos on October 19, 2022. Republished with permission.

About the Author: Laura Clawson has been Daily Kos’ contributing editor since December 2006. She has been full-time staff since 2011, and is currently the assistant managing editor.

Learn more about unpaid wages and wage theft with Workplace Fairness here.

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.