Building Robust Labor Standards Enforcement Regimes in Our Cities and Counties

An unprecedented number of cities and counties around the nation have adopted a local minimum wage that is higher than the federal wage floor. Today, more than 20 cities and counties have a higher local minimum wage; 11 were approved in 2014 alone.

This wave of local minimum wage wins can substantially improve the lives of millions of workers, especially because workers are calling for higher minimum wages than ever before. For such wins to make a real difference to workers and their communities, however, strong enforcement provisions need to be part of any local minimum wage proposal. A robust local regime will strengthen workers’ ability to assert their rights and ensure employer compliance with the new wage laws.

The Current State of Wage Enforcement

The rates of noncompliance with existing wage laws remain staggeringly high, particularly in low-wage industries. A seminal 2009 national study of the low-wage workforce in New York City, Chicago, and Los Angeles found that more than two in three low-wage workers experienced at least one wage violation in their previous work week, including 76 percent who were not paid overtime and 26 percent who were not even paid the minimum wage.  A 2014 report that estimated the social and economic effects of minimum wage violations in California and New York reported that wage violations in 2011 in these two states alone cost workers at least $32.7 million a week, or around $1.7 billion a year.  The report further found that at least 50,000 families in the two states suffered income losses due to minimum wage violations, and at least 14,800 families were brought below the poverty level.

The high rates of violations are the result of many factors. Labor standards enforcement is primarily complaint-driven, relying on individual workers coming forward to assert violations of the law. But fear of retaliation, limited knowledge about workplace rights and where to file wage claims, and the limited remedies available to workers prevent many from coming forward. Other factors that contribute to the high rates of noncompliance include the inability of many private attorneys to take workers’ cases, insufficient damages and penalties assessed against law-breaking employers, woefully under-resourced public enforcement agencies, and the lack of political will to engage in proactive and strategic agency enforcement.

As more cities and counties adopt higher minimum wage standards, they also have the opportunity to establish a local enforcement regime, either by using existing tools and administrative agencies or by building from scratch. They should adopt a broad and robust enforcement system that channels public resources and private litigation to ensure that workers, law-abiding employers, and communities actually benefit from the new higher wage levels.