Ensure Respect for Minimum Wage Laws

Photo Credit: Fibonacci Blue

(Note: This article is co-authored with Laura Huizar, a staff attorney at the National Employment Law Project in Washington, D.C.)

A few weeks ago, the St. Paul City Council introduced a draft ordinance that would raise the city’s minimum wage to $15 an hour. That’s a good start, but the Council must strengthen the bill’s enforcement provisions—because laws are respected only if they are enforced.

With the city’s high cost of living, the State of Minnesota’s minimum wage simply isn’t enough for many workers to afford basic expenses like rent, groceries, transportation, and health care. The city estimates that more than 56,000 St. Paul workers—31% of the city’s workforce—would benefit from this increase. But given the prevalence of wage theft here and across the country, whether those workers will actually see the benefits depends on strong enforcement.

Wage theft occurs when employers fail to pay the required minimum wage or overtime to workers. A landmark 2009 study surveyed over 4,000 workers and found that one in four had been paid less than the minimum wage, and more than two in three had suffered some type of pay-related violation, such as unpaid overtime or stolen tips, during the previous workweek. A 2017 Economic Policy Institute report found that 2.4 million workers in the ten most populous states lost $8 billion annually to minimum wage violations. And a 2015 survey of Twin Cities workers in the janitorial, restaurant, manufacturing, construction, temp agency, hotel, retail, and other industries conducted by Centro de Trabajadores Unidos en la Lucha (CTUL) found that half of respondents had experienced wage theft. In the janitorial industry, the rate was even higher: two-thirds of janitors reported wage theft.

Based on our experience working locally and nationally with workers, policymakers, and enforcement officials on the issue of wage theft, we urge the City Council to start enforcement off on strong footing by, at a minimum, including a clear “private right of action” along with strong remedies and penalties.

A private right of action gives workers the right to bring a wage theft claim in court. The St. Paul proposed ordinance does not include this option for workers—it only allows them to file a complaint with the city’s Department of Human Rights and Equal Economic Opportunity. Given the high rates of wage theft and the modest size of the Department’s staff and resources, the city cannot be expected to effectively tackle enforcement alone. Most major cities that have adopted minimum wage laws have given workers a right to go to court, including Chicago, Minneapolis, Seattle, Flagstaff, Los Angeles, San Francisco, Washington, D.C., Albuquerque, Las Cruces, and Santa Fe. Omitting such a provision in St. Paul’s minimum wage law would go against this trend and against what wage theft experts consider a best practice.

St. Paul’s minimum wage ordinance should also include stronger remedies and penalties for violations. Workers should be able to recover all wages they are owed in addition to an amount to compensate them for the time, effort, risk, and costs tied to filing a complaint. Most local and state laws, as well as the federal Fair Labor Standards Act, allow workers to recover “double damages”—in other words, double what they were owed in the first place. Some places, like Arizona, Idaho, Massachusetts, and New Mexico, allow for “triple” damages. Without this remedy, there would be little to deter an employer from stealing wages if they know they will only need to pay back what they owed initially.

Separately, we are concerned that the current draft language significantly limits the authority of the Department of Human Rights and Equal Economic Opportunity. The proposed language requires the enforcement office to ask the St. Paul City Attorney to step in whenever it believes an employer has violated the law. The City Attorney then must go through a hearing process and give each employer a chance to be heard before the full City Council. This creates an unnecessarily cumbersome process that stands to delay, and possibly deny, justice for workers who cannot afford to wait. Instead, we strongly encourage that the final ordinance give the city’s enforcement office the basic authority to issue notices of violation, carry out hearings, and issue final city decisions. With this change, employers could still go to court to appeal their case. This proposal follows the best practices developed and tested around the country.

We commend Mayor Melvin Carter and the City Council’s leadership in proposing a robust citywide minimum wage increase. In the coming weeks, we encourage them to seize this opportunity to both adopt a much-needed minimum wage increase for its workers and ensure that all workers will benefit from it.

Katie Hatt is the Executive Director at the North Star Policy Institute in St. Paul. Laura Huizar is a Staff Attorney at the National Employment Law Project in Washington, D.C.