Chicago has joined a growing list of governments enacting so-called wage theft laws cracking down on employers who cut corners on wages owed to employees. The laws are aimed at what the National Employment Law Center (NELP), a workers advocacy group, calls an “epidemic” of employers cheating workers, according to MSNBC.
Under Chicago’s new ordinance, passed in January, companies could have their business licenses revoked if they engage in wage theft practices. That could include not paying overtime, paying below minimum wage, withholding tips and improperly docking workers’ wages.
“So many people have had their wages stolen, and this ordinance will them recover their wages and prevent wage theft from happening to other people,” Liliana Baca, a member of the Arise Chicago worker center said in a statement.
Wage theft practices are widespread, according to NELP. In a 2008 survey of 4,387 low-wage workers, the group found that more than two-thirds “experienced at least one pay-related violation in the previous work week.”
Part of the problem is a lack of enforcement of existing wage laws. Departments charged with overseeing wage laws are short-staffed at local, state and federal levels, according to NELP.
Chicago’s wage theft law follows a similar effort by Illinois state legislators. A 2010 law gave increased powers to the Illinois Department of Labor, including possible jail time for wage theft offenders.
Worker advocates say Chicago is the largest U.S. city to enact wage theft legislation. Other governments with similar laws include New York state, San Francisco, Pittsburgh and Miami-Dade (Fla.) County.