Department of Labor Secretary Says Wage Recovery Efforts Benefit the Economy

WageAndHourIn a recent posting to the agency’s website, U.S. Department of Labor Secretary Tom Perez argued DOL enforcement actions benefit everyone and spur the economy. The DOL recently completed a study that estimated the extent of minimum wage and overtime violations and the lost income associated with these violations in California and New York in 2010.

In California, the survey estimated 372,000 weekly minimum wage violations resulted in $22.5 million in weekly lost income for workers. The study contends underpayment of wages caused California to lose $14 million in state income taxes and reduced payroll taxes by $167 million in 2010. In New York, the estimated 188,000 weekly violations resulted in $10.2 million in lost wages and $8 million in lost state income taxes. Between the two states, the study contends the federal government lost an estimated $351 million in income taxes in 2010.

The DOL study found that most violations occurred in service occupations such as leisure and hospitality, retail, health services, and educational services. The study also found that less educated workers were much more likely to experience violations.

Secretary Perez estimates that nationally two million workers a month are “getting ripped off.” Perez states the DOL has recovered “more than a billion dollars for more than 1.2 million workers” since 2009. The agency will continue enforcement to increase compliance and requested funding for additional investigators in 2015. Finally, Perez states the DOL will assess “liquidated damages and civil money penalties when we find violations so that employers know we mean business.”