Power

Low-Wage Colorado Workers Win Wage Theft Case

In a class action lawsuit against a grocery store, workers in Colorado won over $300,000 due to them in unpaid minimum and overtime wages and penalties. But most Colorado businesses who practice “wage theft,” get away with it.

In a class action lawsuit against a grocery store, workers in Colorado won over $300,000 due to them in unpaid minimum and overtime wages and penalties. But most Colorado businesses who practice “wage theft,” get away with it. Shutterstock

Between 40 and 50 low-wage workers at a grocery store in the Denver suburb of Aurora will collect a total of $305,000 in back wages and penalties, thanks to a U.S. District Court ruling July 31 affirming the employees were underpaid.

The decision is based on often under-utilized federal and state “wage theft” laws, which allow employees and employers to sue businesses that effectively steal money from employees by not, for example, paying required minimum or overtime wages.

In the Aurora case, one employee at the Carniceria y Verduleria Guadalajara approached the group Towards Justice, which works to defend “the economic stability of working families,” and claimed to have been habitually underpaid. The grocery store did not realize it was breaking any laws, and did not appear to have malicious intent, worker advocates said.

After an investigation confirming this allegation, Towards Justice represented the employee and others at the store in a class action lawsuit.

“It’s really courageous for an employee to vindicate not only their rights but the rights of their colleagues,” Towards Justice Executive Director Nina DiSalvo told Rewire. “Wage theft disproportionately affects immigrant workers, who are less likely to complain because they are unsure what their rights are in a foreign country. All workers, regardless of immigration status, are protected by wage laws.”

Studies show that wage theft is common, and most incidents often go unchallenged by employees.

The Colorado Fiscal Policy Institute reported last year that in Colorado alone, $750 million in “wage nonpayment” is withheld from workers annually with only a “small fraction” being reported. This translates to $25 million to $47 million in lost taxes for Colorado, the study estimates.

“Our next big push is to make sure that the folks who are victimized can do something about it,” Felicia Griffin, executive director of FRESC, said in an interview with Rewire.

Griffin’s organization and others helped pass a law in Colorado last year that added staff at the Colorado Department of Labor to process wage theft cases.

“Before last year there was no staff and no recourse,” Griffin said. “You could call and nothing would happen. But most people still don’t know you can get help from the Department of Labor.”

Griffin added that groups like Towards Justice and a law clinic at Denver University provide other avenues for workers and employers to seek help.

“We can talk a lot about raising the minimum wage, but if workers don’t actually receive it, it’s meaningless,” DiSalvo said.

Asked why an employer would sue another based on wage theft laws, DiSalvo said, “A legitimate employer that follows the law simply cannot compete if their competitors are violating the wage and overtime laws.”

Wage theft prosecution has come to the forefront in several states over the past year. A judge ruled in February that a Papa John’s pizza franchise in New York must pay its workers nearly $800,000 in unpaid wages over allegations the business underpaid employees and failed to pay overtime.