Local Minimum Wage Enforcement Varies: Millions in Fines in One City, Nothing in Another
Author: Michael Cardman, XpertHR Legal Editor
September 26, 2016
Nearly three dozen cities and counties around the nation have enacted local minimum wage ordinances in recent years - but statistics collected by XpertHR suggest that these ordinances are not being enforced consistently.
Enforcement actions vary significantly from places like Chicago, where not a single employer has been found in violation, to San Francisco, where hundreds of employers have been assessed millions of dollars in fines.
Experts believe a number of factors drive these differences, including:
- Whether the municipality has its own enforcement agency, and if so, whether it is adequately staffed and funded;
- Whether employees are aware of their rights, either through posting requirements, outreach by community groups or even an active plaintiffs' bar;
- Whether employers face significant penalties for violations, such as fines on top of wages due, the revocation of business licenses or a loss of eligibility for contracts with the municipality; and
- Whether the ordinances prohibit employers from retaliating against their employees for reporting violations.
"Enforcement is generally not happening at the level we need to see in order to combat pervasive wage theft," said Haeyoung Yoon, Director of Strategic Partnerships for the National Employment Law Project, a nonprofit organization that advocates for low-wage workers and the unemployed.
Although major cities like Seattle, San Francisco and Los Angeles are "leading the way," Yoon said smaller jurisdictions are capable of aggressive enforcement as well. For example, she said, many smaller towns and cities in California partner with the state's Labor & Workforce Development Agency to enforce their ordinances.
A sampling of data from different jurisdictions illustrates the differences in minimum wage enforcement:
- Chicago has logged 425 complaints since its minimum wage ordinance took effect on July 1, 2015, according to the Freedom of Information Office of the Department of Business Affairs & Consumer Protection. Chicago has not found any employers to be in violation of the city's minimum wage ordinance, according to department spokeswoman Mika Stambaugh, although about 100 investigations remain in progress.
- San Francisco has logged an average of 80 complaints per fiscal year between 2004-05 and 2015-16, according to a report from the city's Office of Labor Standards Enforcement and more recent statistics provided by an administrative analyst. During that time, the city recovered $9.7 million in back wages from employers found to be in violation of the ordinance.
- Prince George's County, Maryland, and Montgomery County, Maryland, have logged 32 and 58 complaints, respectively, since their minimum wage ordinances took effect on October 1, 2014, according to Maureen O'Connor, a spokeswoman for the Department of Labor, Licensing and Regulation (DLLR), which is responsible for enforcing the counties' ordinances. During that time, the DLLR has collected $11,946.95 from employers in Prince George's County and $8,595.32 from employers in Montgomery County. The DLLR did not have information available about how many employers had been found in violation.
- Johnson County, Iowa, has logged about 20 complaints since its minimum wage ordinance took effect, but no employers have been fined, according to the Des Moines Register.
"Laws ultimately are as good as their enforcement," said Ken Jacobs, Chair of the UC Berkeley Center for Labor Research and Education. "Passing and raising the standards is important, but to have any meaning, they must be enforced."