Unpaid Wage Complaints on the Rise in New Jersey

Zhen Zhong Zhang, a cook in a busy Chinese restaurant, suspected something was wrong when he was working 70 hours a week but was taking home just $500.

An immigrant from the Zhejiang Province of China with no English skills, Zhang wasn't aware he was entitled to both minimum wage and overtime pay, regardless of his immigration status.

"I felt there was something wrong with it," Zhang said through a Mandarin interpreter. "There were a lot of other people that were in my situation but didn't stand up for their rights because they were afraid of getting fired."

The way the U.S. Department of Labor handles such cases is the subject of a congressional hearing this week. It comes on the heels of a report released Wednesday that criticizes the way the agency handles wage theft complaints.

An undercover investigation by The Government Accountability Office found the labor department's wage and hour division doing a poor job of helping the nation's most vulnerable workers.

Zhang learned about his rights in a Chinese language seminar given by a local community group. Alexander Saingchin, a lawyer with the Asian American Legal Defense and Education Fund, a national advocacy group for the protection and promotion of the civil rights of Asian Americans, helped Zhang confront his employer.

Zhang, 59, has since received $11,000 in unpaid wages from the central New Jersey restaurant where he worked. He also has found a better job.

"Once I learned about the labor laws, I learned that I could stand up for my rights," Zhang said. "I worry about other workers in my situation. I sympathize for them deeply."

Saingchin says cases like Zhang's are common, especially in low-wage work places — from construction sites to nail salons — that are largely staffed with immigrant workers. He says many employers assume immigrant workers will be unfamiliar with the U.S. legal system and unaware of their rights.

"They may feel that because they don't speak English, they'll have nowhere to turn for help or won't ask for help because of their immigration status," Saingchin said. And if they don't have legal status, they fear their employer "can use that as a sword to not pay them overtime or a legal wage," he said.

The number of wage complaints filed in New Jersey increased nearly 29 percent in 2008 compared to the previous year, said Leonard Katz, deputy commissioner of the state Department of Labor and Workforce Development.

Katz says the complaints include allegations that employers pay less than minimum wage or deny people overtime or vacation pay.

New Jersey has taken steps to make it easier for immigrants to report possible wage abuses, Katz says. Complaint forms have been translated, there are more places where people can file complaints, and community organizations have been given the cell phone numbers of labor inspectors so they can reach them when disputes arise.

Nationally, the number of wage complaints has fluctuated in recent years. The U.S. Department of Labor attributes a recent downturn in complaints to improved screening and intake strategies that filter out cases that don't fall under its jurisdiction.

The amount of back wages collected on behalf of workers in the lowest-wage industries, however, has continued to increase. The $57.5 million recovered in 2008 represents a 9 percent increase from 2007, and more than a 77 percent increase over 2001, according to the Department of Labor's Web site.

The General Accounting Office report faults several of the agency's processes, from its investigative procedures to its follow-up methods. When GAO investigators posed as workers and companies on 10 occasions, the labor agency handled just one of the 10 fake complaints properly, according to the report.

It also noted slow response times and shoddy record keeping and complaint intake. And it found insufficient employer follow up, the report says.

Labor Secretary Hilda Solis has promised to step up enforcement at the agency.

Janice Fine, an assistant professor at Rutgers University, said the problem of wage theft is prevalent across the country in low-wage, immigrant-heavy industries. She attributes the increase, in part, to the rise of subcontracting and nonstandard forms of employment.

"In these industries where profit margins are tight and competition is tight, employers look to compete on the basis of wages, and they look to cut their labor costs," said Fine, who sits on the state's Blue Ribbon Advisory Panel on Immigrant Policy.

Wages abuses are especially prevalent, according to Fine and others, among day laborers. A recent nationwide survey by the University of California found that almost half of all day laborers polled reported at least one instance of unpaid wages in the two months before the survey.

Jose Luis Aguilar, a day laborer from the Mexican state of Puebla who lives in Passaic, says he's been trying since January to recover $480. He says a contractor picked him up on a street and hired him for a week to lay floors but then refused to pay him or take his calls.

"It's a very bad situation. We work for necessity; we're not standing out there waiting for work just for fun," Aguilar said in Spanish. "You trust that you'll go and do a job, and return home, and get paid for your work. Often, they'll say: 'Work for me a few days, I'll pay you at the end,' but they have lots of tricks."