Stealing pay from Ohioans is all in a day’s work for some companies

When picturing a thief, most people envision a masked bandit with a sack of cash slung over his shoulder. A new city ordinance insists it can also look like a shady employer, and City Council intends to do something about it.

Columbus City Councilmember Rob Dorans will convene a public hearing this week to discuss a new city ordinance to combat wage theft in Columbus. The hearing will take place Wednesday Aug. 19 at 5:30 p.m. live via WebEx, phone, television, and on Facebook.

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Dorans said state and federal enforcement of wage and hour laws is underwhelming, and he feels that it’s up to Columbus to come up with its own incentives.

“We’re not gonna be able to create a wage theft department at the city with dozens of inspectors checking businesses,” he said. “What we wanted to do was put into place a regulatory regime that really focuses on trying to get everyone to follow the law as written.”

Ordinance 1802-2020 is targeted at companies that receive city contracts, financial incentives, permits, licenses and other benefits. It would mandate that they report instances of wage theft and payroll fraud to the city. In addition, it requires these companies to provide proof that independent contractors are properly classified. These employers will be barred from working with subcontractors who are found in violation of state and federal wage and hour laws.

“We’re gonna consider this very serious behavior, and if you’re caught doing it, we’re just not gonna work with you,” said Dorans.

According to a Yale Law & Policy Review article entitled “The Problem of Wage Theft,” wage theft is one of the most common, yet least reported crimes in America. It accounts for more value stolen than bank robberies, convenience store robberies, street and highway robberies, and gas station robberies combined. It can happen when a company pays employees less than minimum wage, refuses to pay overtime compensation, or simply doesn’t compensate them for hours worked. Payroll fraud, a related crime, involves dodging taxes by misclassifying employees as independent contractors or paying for transactions under the table. These arrangements preclude the employee from receiving unemployment or workers compensation benefits.

In both cases, workers are given a raw deal, but the government also loses millions in unemployment compensation payments, workers’ compensation premiums, and state income taxes. These dollars would normally go to funding Social Security and Unemployment Insurance.

Wage theft is a problem that hits Ohio especially hard. A report from Policy Matters Ohio estimates that 271,000 workers in Ohio fall victim to minimum wage violations each year, amounting to $600 million in stolen compensation. The U.S. Department of Labor reported nearly 14,000 cases of wage theft at 620 companies in Columbus alone between 2007 and 2016.

Dorans said City Council has already received responses from labor organizations, employer groups, and members of the general public. He sees the ordinance as a benefit to employees and businesses alike, ensuring that everyone plays by the same rules.

“This isn’t about being anti-business or anything like that,” he said. “It’s about following the law as written and treating people with dignity and respect.”

Residents that intend to testify live must email Kevin McCain by 4 p.m. the day of the hearing to request a WebEx speaker link. Written testimony must be submitted via email to McCain by 5 p.m. the day of the hearing. Testimony is limited to 3 minutes per speaker.

The hearing can be viewed live on the CTV website or on Spectrum, Channel 1024; WOW, Channel 3 and AT&T U-verse, Channel 99. It will also be posted to the City of Columbus YouTube channel for viewers unable to attend the live hearing.

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