News / Asia

Wage Theft Shatters American Dream for Many Low-Income Immigrants

Wage theft in the United States has reached near epidemic levels among low-wage workers.

Korean immigrant workers, represented by AALDEF, held a protest with supporters against abusive employment practices at a New Jersey restaurant in April, 2010.
Korean immigrant workers, represented by AALDEF, held a protest with supporters against abusive employment practices at a New Jersey restaurant in April, 2010."

Eight years ago, “Mrs. Kim” came to the United States from China “to pursue her American Dream,” but thanks to unscrupulous business practices familiar to many Asian immigrants working in low-wage industries, things went horribly wrong.

Kim, who did not want to use her real name because she is still involved in litigation, began life in the U.S. preparing dumplings and side dishes at a Korean restaurant in Bergen County, New Jersey.

The job went well for a few years. It was hard, but Kim was getting paid for her efforts.

“When I first started working, [the owner] agreed to pay me $600 per week,” she said. “Specific hours were not indicated, but she did indicate I would have to work over 12 hours per day.”

Though she worked as many as 17 hours a day, when the restaurant’s business started to decline, the owner began paying employees late or not paying them at all.

Kim is suing her former boss for more than $40,000 in minimum and overtime wages that have been withheld and additional liquidated damages.

“Wage and labor laws are designed to cover every worker. Immigration doesn’t come into it. But that’s not what we’ve seen in Asian-American communities,” said Shirley Lin, an attorney with the Asian American Legal Defense and Education Fund (AALDEF), who has taken Kim’s case. “We’ve seen employers push them to the extreme with long hours and abusive practices.”

Easy Targets

Lin said that employers in these kinds of situations often threaten to report the employee to immigration authorities if they challenge the abuse.

She said Asian immigrant workers in low-wage industries, like their Latino, African-American and Caucasian counterparts, are susceptible to wage theft for a variety of reasons, including language barriers, fear of deportation and a lack of education about their rights.

Wage theft in the United States has reached near epidemic levels among low-wage workers, according to a landmark 2008 national survey of nearly 4,000 low-wage workers in Los Angeles, Chicago and New York.

Seventy percent of the workers surveyed were foreign-born.

The survey, which was conducted by the Center for Urban Economic Development, the National Employment Law Project, and the UCLA Institute for Research on Labor and Employment, found over two-thirds of low-wage workers experienced “at least one pay-related violation” in the work week reported.

Furthermore, 26 percent of workers were paid less than the legal minimum wage; 76 percent of employees who worked overtime were not paid the legally required overtime rate; 70 percent of workers who performed work outside of their regular shifts did not receive any pay for this work; and 30 percent of tipped workers were not paid the tipped minimum wage.

Lacking an income, Kim said she was forced to borrow money from friends and not pay bills just to survive.

“They’re making employees suffer,” Kim said. “If you can’t run a business and pay your employees, you shouldn’t run a business. You shouldn’t take advantage of workers like this.”

She is now working at another restaurant and said she’s extremely stressed and tired from her experience with her former employer.

“I can’t sleep at night. It’s affecting my future employment because I’m not as strong. I’ve cried many tears over this employer.”

Paying the Boss

There is an added dimension to Kim’s struggles.

Her stress grew when her previous boss began pressuring employees to lend their money to support the business, another manifestation of wage theft, said Lin. Kim submitted, giving up around $55,000.

She said her boss would appear to pay her back by giving her postdated checks, but she was often told not to deposit them and when she did, the checks bounced.

“At the time I lent her money, I trusted her,” Kim said. “I thought she would share her success with her employees, but that’s not how it turned out. I helped her open a second restaurant. The owner became very greedy, borrowed money from employees and delayed paying our wages.”

Conning workers into giving loans is not the most common type of theft, which usually comes in the form of failure to pay, not paying required overtime wages, not paying for work required before and after a shift, or paying less than the minimum wage.

Kim, who has a husband and son back in China who she has not seen for eight years, said she sometimes regrets coming to the U.S. because of the stress caused by failing victim to, and fighting, wage theft.

"My husband has threatened to divorce me because of this,” she said. “My family wants me close to them, but because this is so important to me, I don’t want to give up.”

Kim’s is not an isolated case.

According to the survey by the Center for Urban Economic Development, Asians immigrants were the most susceptible to overtime abuse and off-the-clock violations compared to other racial groups studied.

Cracking Down

The problem has spurred a number of groups to try to help, including Adhikaar, which assists Nepalese, and the Chinese Staff and Workers’ Association, which aims to protect Chinese immigrants from exploitation.

Lin said workers like Kim are in a “vacuum of oversight and enforcement of our labor laws.”

“Without any government oversight, it falls upon the workers to hold the line against these kinds of unscrupulous employers.”

According to Nancy J. Leppink, deputy administrator of the Department of Labor’s Wage and Hour Division (WHD), the division has increased its number of investigators. They help to enforce minimum wage, overtime pay, record-keeping, child labor and other labor laws.

This reverses a trend cited by the Government Accountability Office, which found that enforcement actions by the WHD decreased from 51,643 in 1998 to 29,584 in 2007, despite an increase in the number of worksites and employees. The number of investigators in the WHD decreased by 20 percent during this period, falling to just 732 nationwide in 2007.

“Since  2009, the WHD has hired more than 300 investigators, bringing the agency’s total to more than 1,000 investigators,” Leppink wrote in an email. “In 2011, WHD collected a record number of back wages, which totaled $224.8 million, and helped over 275,000 workers. These additional resources, coupled with WHD’s changes to how it prioritizes its work to be more strategic, have clearly revived WHD’s enforcement program on behalf of the workers in this country.”

She added that more than 600 of WHD’s investigators speak a language other than English, including Spanish, Cantonese, Mandarin, Korean, Japanese and Vietnamese.

“Some of our WHD staff are fluent in many languages,” Leppink wrote. “We also have available a language interpretive service which can assist with translation in more than 170 languages.”

Room for Improvement

While Lin called these developments “laudable,” she’d said she would like to see the specifics of how these resources are allocated.

“Navigating a wage claim is extremely complex, and in some cases takes more than a year,” she said. “Telephonic access is a good step, but the critical stage of the investigation is [done] onsite and typically includes interviewing an employer who might be monolingual and employees who speak many different languages. The DOL should take proactive steps to figure out what communities are in more need of language access among its staff investigators.”

There still may be hope for wage theft victims like Kim. Some of these cases do have happy endings.

Earlier this month, three Korean chefs were able to recover nearly $40,000 in unpaid wages from a sushi restaurant after one, who had worked with AALDEF before, organized them to take action.

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