Minimum Wage Violations Are Costing California Workers Billions

By: Sam Watanuki | Published: May 15, 2024

Minimum wage violations are a significant issue in California, reportedly costing workers billions of dollars annually. Despite strong wage laws, enforcement problems mean many workers don’t receive their rightful pay.

A study by Rutgers University highlights the scope of this problem and its impact on workers.

The Scale of the Problem

The study by Rutgers University found that minimum wage violations in California’s major metro areas, such as San Francisco, San Diego, and San Jose, cost workers up to $4,000 per year.

Street view of a Mexican restaurant in California with a large sign reading "Mexican Restaurant" and smaller signs advertising homemade burritos and other Mexican food under a clear blue sky

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This widespread issue highlights the need for better enforcement of wage laws to protect vulnerable workers and ensure they receive the pay they deserve.

A Dramatic Increase

From 2014 to 2023, minimum wage violations in California increased by 56%. Last year alone, nearly 1.5 million workers were affected by these violations.

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This dramatic rise underscores the importance of addressing wage theft and ensuring that all workers are paid fairly and in accordance with the law.

Who's Affected the Most

The Rutgers also study revealed that Black and Latino workers, along with young people aged 16-24, are more likely to experience wage theft.

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These groups are often in lower-paying jobs and may lack the resources or general knowledge to fight back against unfair labor practices. Addressing this disparity is crucial for achieving wage justice.

High-Risk Jobs

Privately held roles such as childcare workers, nannies, and home health care professionals are among the most affected by minimum wage violations.

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These jobs often involve long hours and low pay, making them more susceptible to wage theft. Ensuring fair wages for these essential workers is vital for their well-being and the quality of care they provide.

Impact of the Fast Food Wage Hike

On April 1, 2024, California increased the minimum wage for fast food workers from $16 to $20 per hour.

A fast food worker prepares burgers on a tray. Deep fryers and tools are seen in the background

Source: Canva

While this is a positive step for workers, it raises questions about compliance and enforcement to ensure that all workers benefit from the increase and receive their entitled pay.

Legal Protections Under Threat

The Private Attorneys General Act (PAGA) allows employees to file lawsuits for labor violations on behalf of themselves, other workers, and the state.

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However, a potential ballot initiative this November could repeal PAGA, weakening worker protections and their ability to seek justice for wage theft and other violations.

The Need for Stronger Enforcement

Professor Janice Fine from Rutgers University emphasized the need for stronger labor enforcement, stating, “This is the time to be strengthening — not weakening — labor enforcement.”

Workers in a fast-food restaurant kitchen, dressed in red uniforms, are busily assembling burgers. One worker in the foreground is focused on adding condiments to the burger buns, while others in the background continue with the preparation process

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Robust legal frameworks and proactive enforcement are essential to protect workers and ensure they receive fair wages.

The Role of Businesses

Instead of raising prices to cover higher wages, some franchisees suggest improving operational efficiency and adopting new technologies. These strategies can help balance costs without negatively impacting customers.

Two self-order digital kiosks at a Burger King restaurant, with signs indicating where to order, situated in front of the counter with the menu displays and a bustling kitchen in the background

Source: Wikimedia Commons

In the case of fast food, this includes implementing automated ordering kiosk systems and a larger focus on using mobile applications for takeout orders. Unfortunately, this has also come with job cuts within the industry.

The Economic Impact

Wage theft not only hurts workers but also affects the broader economy. When workers are underpaid, their spending power decreases, leading to lower overall economic growth and stability.

A busy street in Los Angeles filled with cars, palm trees, buildings, and neon signs

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Ensuring fair wages for all workers is crucial for a healthy and thriving economy that benefits everyone.

Solutions and Hope

Addressing wage theft requires a multifaceted approach, including stronger enforcement, better education for workers about their rights, and supportive policies that protect vulnerable workers.

Inside a fast-food restaurant kitchen, two workers in uniform are seen preparing orders. The kitchen is equipped with modern appliances and digital order screens

Kiryl/Unsplash

By taking these steps, we can create a fairer labor market where all workers are compensated justly for their efforts.

Staying Informed

Minimum wage violations in California are a serious issue costing workers billions. Stronger enforcement and protective laws are essential to ensure fair wages for all.

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Stay informed, know your rights, and support policies that promote fair labor practices. If you find yourself in a situation where you think your wages are being stolen, don’t hesitate to seek legal advice or assistant from advocacy groups such as The Legal Aid Society-Employment Law Center.