One of the costliest categories of theft each year in the U.S. isn’t burglary, robbery or grand theft auto — it’s wage theft, the act of paying employees less than they’re legally owed. Every year, employers cheat workers out of more than $50 billion in wages, more than triple the FBI’s estimate for the total annual value stolen in all major property crimes combined.
Now lawmakers want to crack down on wage theft in Colorado, starting by treating it like any other kind of theft. Under existing state law, denial or underpayment of wages is considered a misdemeanor, no matter how much a worker is owed. House Bill 1267, which passed out of the House Judiciary Committee on Tuesday, April 2, would define wage theft as theft, making it a felony if the amount of unpaid wages is more than $2,000.
“A hard day’s work should equal a fair day’s wages,” said Representative Jonathan Singer, a Democrat from Longmont and co-sponsor of the bill, during the committee hearing. “What actually happens in some situations is that we have dishonest actors that put honest employers at a competitive disadvantage. We have folks out there who will hire people and then not pay them.”
Wage theft comes in many forms, from simple non-payment to improper deductions, failure to pay overtime, minimum-wage violations and more. But the most common victims of the practice in Colorado are low-income Latino workers, including those who are undocumented or speak little English — and in the most serious cases, wage theft is committed as part of human-trafficking schemes.
“Wage theft is stealing, but it is also so much more corrosive to our society,” said Representative Meg Froelich, a Democrat from Greenwood Village and another co-sponsor of the bill. “Wage theft is perpetrated against the most vulnerable workers.”
Froelich and Singer introduced HB 1267 following a series of recommendations from the Colorado Human Trafficking Council, a 31-member body created in 2014 to lead the state’s fight against human trafficking. The Council’s 2018 annual report noted that while Colorado organizations who serve trafficking survivors report that victims of labor trafficking are their “most common client profile,” enforcement and prosecution of such cases has lagged behind that of other kinds of trafficking.
Witnesses who testified in support of the bill at Tuesday’s hearing included many victims of wage theft and other criminal labor practices.
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“For ten years, I’ve helped workers who’ve been brought to Colorado from Texas, Nebraska, Oklahoma, South America, with a promise of a wage better than they earn at home,” said Juan Arellano of Carpenters Local 555. “They work all the hours they can work, only to find that when payday comes, they’re paid less than what was originally discussed, and there’s no overtime.”
In a study released last month, researchers from the University of Denver surveyed hundreds of day laborers in the Denver metro area and found that nearly two-thirds had experienced wage theft. "Lack of accountability for wage theft not only exploits some of the city’s most vulnerable workers," the report's authors wrote, "but it also renders the quality and safety of work conducted in the Denver area questionable."
More than 1,100 Colorado businesses have been cited for wage-theft violations since April 2017, according to data maintained by the state’s Department of Labor and Employment. The amount of back pay ordered to be paid in those cases ranges from just a few dollars to the maximum $7,500, with an average figure of about $1,371. These reported cases account for only a small fraction of Colorado workers' overall losses as a result of wage theft, which a 2014 report from the Colorado Fiscal Institute estimated at $750 million per year.
"There are many people this is happening to, and it's unjust," said Pamela García, a victim of wage theft who spoke through a translator at Tuesday's hearing. "We hope that you'll pay attention and listen to us, and try to resolve these issues."