From October 25, 2022 post.

Today, Rep. Cindy Axne (IA-03) sent a letter to Iowa Workforce Development Director (IWD) Beth Townsend asking for more information about what policies and penalties are in place at the IWD to combat wage theft.

According to a recent report by Common Good Iowa, wage theft is estimated to cost 250,000 Iowa workers more than $904 million annually. The same report found Iowa workers are shorted an average of $300 per week through minimum wage and overtime wage violations, in which workers are paid less than they are due according to federal minimum wage and overtime standards.

In addition, public records show IWD only has two active investigators to address unpaid wage claims for 1.5 million workers in Iowa, and only 9 percent of employers that IWD investigated from 2017 to 2019 for wage theft were subject to penalties beyond the wages they owed to their workers.

“Iowans work hard, and they deserve to be fairly compensated for that work. When employers fail to pay them their due, workers should have robust supports and advocates to ensure that they are able to retrieve their stolen wages,” Rep. Axne wrote. “The abundance of wage theft impacting Iowa workers demonstrates that IWD has failed to meet the urgency of this matter. IWD needs to do better and it is time that Iowans get answers on how it will improve.”

Dear Director Townsend:

I am writing to you today to inquire about the Iowa Workforce Development’s future plans to address wage theft and stand up for Iowa workers.

Wage theft in Iowa is astronomical. A recent report published by Common Good Iowa found that wage theft is estimated to reach $904.4 million and affect 250,000 Iowa workers annually. On a weekly basis, this report estimates that affected Iowa workers are shorted an average of $300 per week, which can be critical to affording rent, utilities, and meals. This wage theft primarily takes the form of minimum wage and overtime wage violations, in which workers are paid less than they are due according to federal minimum wage and overtime standards. Worse yet, workers who are among the lowest earners, working multiple jobs, employed in essential work such as food service and childcare, and not represented by a union also bear the largest costs of wage theft. These findings are generally consistent, if not worse, than past reports conducted by Iowa Policy Project, Economic Policy Institute, and National Employment Law Project.

Despite the alarming prevalence of wage theft documented over the last years, the Iowa Workforce Development (IWD) has done little to address and prevent wage theft. This report found that IWD and the U.S. Department of Labor (DOL) recovered stolen wages for just 3 percent of estimated victims of minimum wage violations over the course of 2017-2019. Additionally, of the 1,490 wage violation claims that IWD received in 2017-2019, just over half of them (53 percent) resulted in backpay with less than a third of the total amount claimed (only $580,000 out of $1.8 million) returned to workers.

Many of these issues stem from IWD’s policies and administration. For example, IWD only has two active investigators to address unpaid wage claims for 1.5 million workers in Iowa. Additionally, IWD rarely requires employers who are found to have committed wage theft to pay anything beyond the wages they already owe their workers, meaning that bad actors rarely receive even a slap on the wrist for stealing from their employees. In fact, only 9% of employers that IWD investigated from 2017-2019 for wage theft were subject to damages. Given that Iowa state law empowers IWD to assess liquidated damages of up to two times the unpaid wages and impose civil penalties (tried and true measures to adequately compensate workers and deter violations), the lack of these remedies that IWD has levied against employers guilty of wage theft is remarkable and leaves the impression that IWD is not committed to discouraging these crimes. Lastly, the IWD bars claims above $6,500, leaving workers that have been victims of wage theft for sums larger than $6,500 to independently seek an attorney and private lawsuit to get justice. Such a policy, which is not required by law, underserves the most severely impacted by wage theft – many of whom may not be able to afford the costs associated with a private lawsuit and thus are left with little recourse.

All of this is unacceptable. Iowans work hard, and they deserve to be fairly compensated for that work. When employers fail to pay them their due, workers should have robust supports and advocates to ensure that they are able to retrieve their stolen wages. The abundance of wage theft impacting Iowa workers demonstrates that IWD has failed to meet the urgency of this matter. IWD needs to do better and it is time that Iowans get answers on how it will improve.

I ask that you respond to the following questions by November 15, 2022:

• Does IWD track information on the prevalence of wage theft in Iowa? If so, what are IWD’s estimates on the level of wage theft in Iowa including that which goes unreported? Which workers are most acutely affected by wage theft according to IWD?
• Regarding reported cases of wage theft, is there information on the number of claims above $6,500? If so, please share information on the number of claims above $6,500 and the types of workers that seek these types of claims.
• What is IWD’s process for addressing possible, but not reported wage theft? Does IWD proactively monitor and investigate possible wage theft violations, or does it simply investigate claims made by Iowa workers?
• What progress has IWD made in filling the currently vacant or inactive investigator positions? When can Iowans expect that these roles are filled and operating?
• Given the current level of wage theft in Iowa, does IWD plan to increase the number of investigators responding to these cases in the near future? Why or why not?
• Under what circumstances are employers required to pay liquidated damages and/or civil penalties (as called for under state law) on top of the owed wages?
• What is IWD’s rationale for not levying penalties or requiring liquidated damages against employers who commit wage theft? If there are no remedies or penalties for not paying workers beyond what they are owed, what disincentives exist to prevent employers from continuing to do so?
• Does IWD plan to increase the regularity and severity of penalties it levies against businesses that commit wage theft in the future? Will IWD implement any additional disincentives to wage theft?
• Wage theft is commonly underreported due to lack of education on resources to reclaim unpaid wages. What initiatives has IWD implemented to increase workers’ education on wage theft and resources to report and recover lost wages? Are there any future initiatives that IWD is planning?

Original source can be found here