Overview:

Employers failing to pay workers minimum wage is the most common form of wage theft in the state, a Signal Cleveland analysis of Ohio Department of Commerce data shows. Nearly 2 million Ohioans are estimated to have experienced this type of wage theft from 2012 to 2022, according to a Northwestern University professor’s analysis of federal data done for Signal Cleveland. 

Grace Heffernan was the first person to address Cleveland City Council when the body started allowing public comment in October 2021. She didn’t criticize the delivery of city services or complain about a neighborhood nuisance. Heffernan spoke on behalf of Guardians for Fair Work, a coalition of community and other groups who believe City Council should play a role in ensuring that labor laws are enforced.

That December, Heffernan, wearing a Christmas elf’s cap, again gave public comment. This time it was about wage theft, the practice of employers cheating workers out of their pay. Nearly a dozen coalition members, also dressed as elves, joined her. They gave copies of Kim Bobo’s book, “Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid and What We Can Do About It,” to each of the 17 council members. In the following months, Heffernan said Guardians for Fair Work met individually with more than half of council, including Council President Blaine Griffin. In September Griffin introduced a bill that would bar businesses that have engaged in wage theft from bidding on certain city contracts. 

The more people who know their rights, the better: Your employer can’t steal from you, whether or not they do business with the city.

Grace Heffernan, board president of the Northeast Ohio Worker Center

The proposed ordinance marked the high point of Guardians for Fair Work’s more than yearlong campaign aimed at combating wage theft. Other efforts by the coalition of 30 community and faith-based groups and labor organizations include an online petition, ostensibly lobbying council to support what the coalition would like to see in the bill, an online video and community outreach. She said coalition members are pushing for the legislation because it would serve as a reward for companies wanting to do business with Cleveland to treat their workers fairly.

“We saw that there is an opportunity to improve the quality of jobs for businesses where the City of Cleveland spends its money,” said Heffernan, board president of the Northeast Ohio Worker Center, which she describes as “sort of a driving force behind the campaign.” 

Analysis shows 2 million Ohio workers affected 

Heffernan and others in Guardians for Fair Work believe it would be fitting for Cleveland, which persistently ranks among cities with the highest poverty rates, to take a strong stance against wage theft. Much of the research on the topic shows that low-wage workers are more at risk for wage theft than their more affluent counterparts. Employers failing to pay workers minimum wage is the most common form of wage theft in the state, a Signal Cleveland analysis of Ohio Department of Commerce data shows. Nearly 2 million Ohioans are estimated to have experienced this type of wage theft from 2012 to 2022, according to a Northwestern University professor’s analysis of federal data done for Signal Cleveland. 

Failing to pay minimum wage is not the only wage-theft violation. Other violations include not paying the prevailing wage, usually the hourly rate contractors are required to pay workers on publicly funded projects. Another is employers mandating that workers come in early to clean, set up or perform other tasks without paying them. Though such practices are illegal, workers often don’t know that they are or they don’t complain for fear of being fired. 

Wage theft infographic Credit: UCLA Labor Center

This was true of the nearly 40 people attending an educational meeting on wage theft the coalition held last March for residents in the Kinsman neighborhood, Heffernan said. As many from the predominantly Black, low-income and working-class neighborhoods and nearby similar communities shared their work experiences, they gave many examples of wage theft. Many of them believed that what were common practices in their workplaces, such as employers not paying hourly workers overtime, was just the way business was done, said Aisia Jones, who heads outreach and engagement for Guardians for Fair Work.

“This has been disproportionately normalized in certain neighborhoods and communities, which  are often predominantly Black, because of the lack of knowledge about wage theft and because of a lack of resources. We’re in this mode of survival: ‘It took me forever to get this job. I’m just glad I’m working – even if it is a $10-an-hour job.

“They don’t think they have any rights, and that’s just not true,” Jones said. “It was a matter of putting the language [about wage theft] in front of a lot of these workers so that they could realize, ‘I think that this is happening to me!’”

Wage theft clinic

The next coalition outreach effort is a Northeast Ohio Worker Center wage theft clinic from noon to 3 p.m. Nov. 19 at St. Paul’s Community Church, 4427 Franklin Blvd., Cleveland.

Though Cleveland’s law would only apply to businesses bidding on city contracts, Heffernan said its impact could potentially be greater.

 “A big part of why you even try to pass one of these ordinances is the community education aspect,” she said. “The more people who know their rights, the better: Your employer can’t steal from you, whether or not they do business with the city.”

The current version of the bill “requires any person or entity that bids on a city construction or service contract, or applies for financial assistance, to disclose any legal determination that they committed wage theft or payroll fraud in the previous two years.” The council president said addressing such fraud would include focusing on businesses that “conceal their true payroll” from the government.

Griffin said amendments are in the works and that council could vote on the bill as early as Dec. 5. He said that he has not only met with the coalition but also with organized labor and other community-based groups in fashioning the bill and devising amendments. He said he introduced the bill because wage theft “affects a lot of BIPOC [Black, Indigenous, People of Color] communities.” Griffin said addressing the practice is in line with his long-standing concern for low-wage issues. He co-sponsored the 2000 living wage ordinance that sets a minimum wage for city employees and workers for certain city contractors, a standard that continues to be higher than the state minimum. 

I didn’t want to ruffle any feathers at any job because I was under the impression that this was one of those states where they can fire you for any reason

Ernest Hatten, Cleveland resident

The only hint that Griffin would offer about amendments is that some would be focused on the Fair Employment Wage Board, whose duties include reviewing the effectiveness of the living wage ordinance.

“What we’re doing now is trying to enhance that board and its responsibilities in order to try to prevent wage theft and payroll fraud,” he said.

Heffernan declined to comment on details of the current version of the bill or what amendments the coalition would like to see. The bill that was introduced doesn’t include some components for which they had lobbied. For example, Guardians for Fair Work wanted the city to have the power to claw back–force the return–of tax abatements and other financial incentives given to businesses involved in wage theft. They also wanted the city to engage in community education about wage theft. Since the City of Cleveland can’t enforce wage theft and other labor law violations, the coalition wanted the city to have a mechanism to refer people wanting to file wage theft complaints to the appropriate agencies. Enforcing labor laws in the state is primarily within the purview of the Ohio Department of Commerce and sometimes the U.S. Department of Labor. 

“Council President Blaine Griffin, to his credit, really has been open to dialoguing and working with us on this,” Heffernan said. “I think that we have reason to believe that we may not get everything that we’d like to see, but that we can get much closer. “

More victims than complaints suggest 

When Ernest Hatten of Cleveland heard about the coalition’s wage theft campaign, he didn’t hesitate to join. He even appears in a campaign video. Now, he had a name for and understanding of what he said had happened to him a few times at different jobs. Hatten said he first encountered wage theft 15 years ago as a security guard, when he worked 20 hours of overtime in a week.

“My immediate supervisor called me and said, ‘Payroll can’t handle your check,’” Hatten said. “‘I’m gonna give you a vacation day in exchange for eight hours. Are you OK with that?’ I didn’t know about labor laws and regulations. I didn’t want to ruffle any feathers at any job because I was under the impression that this was one of those states where they can fire you for any reason.”

Hatten’s example illustrates how many wage theft victims never file complaints with the Ohio Department of Commerce in an attempt to recoup their lost wages. Data shows the disparity between the estimated number of wage theft victims and the actual number of cases filed with the department. 

Daniel Galvin, an associate professor of politics at Northwestern University, has studied wage theft extensively. In an analysis for Signal Cleveland, he used 2012 to 2022 data from the Current Population Survey, a federal monthly survey of about 60,000 U.S. households, to estimate the number of minimum wage violations. Galvin estimates that an average of 177,422 Ohioans annually, or nearly 2 million during the 10-year period, fell victim to the state’s most common form of wage theft. 

Activists rally for worker rights | Credit: Guardians for Fair Work Credit: Guardians for Fair Work

Yet an average of only about 330 minimum wage violation complaints were filed annually with the state between 2017 and 2021, according to a Signal Cleveland analysis of Ohio Department of Commerce data. About 30 percent of the complaints filed were either rejected or denied, the analysis found.

Galvin’s analysis offered other insights into estimated minimum wage violations in Ohio. Ohio ranks 22nd among states for the rate of minimum wage violations. He estimates that 14.8 percent of low-wage workers in Ohio were victims of this type of wage theft violation. Even more telling is that these workers lost an estimated 20 percent, or $1.62 per hour on average, to wage theft.

“Wage theft is a persistent problem. Minimum wage violations, which I study most closely, are particularly problematic because they cause the most vulnerable, lowest-paid workers to lose income they cannot afford to lose,” Galvin wrote in an email. “They also take a psycho-social toll on workers and cause myriad hardships. They often bring low-wage workers under the poverty line.”

Andy Schumann, organizer with Cleveland Art Workers Collective, said it is common for club owners, promoters and others to take advantage of young musicians trying to break into the entertainment industry.

“Young musicians are preyed on in such a way that they don’t really receive compensation that’s equivalent to an Ohio minimum wage,” he said.

Part of a Movement

Cleveland would become the third Ohio city to pass wage theft legislation aimed at contractors. Cleveland, Columbus and Cincinnati would have this in common: Ohio’s only three worker centers, nonprofit groups often focused on ensuring that low-wage workers aren’t exploited in the workplace, came up with the idea for the legislation in each city and lobbied to get it passed.

Galvin described the effort of the three worker centers as an example of “alt-labor.”

“Alt-labor groups [like worker centers and other nonprofit worker-justice advocacy groups] have pushed for public policies to raise the floor on labor standards and deter noncompliance with the law,” said the author of the forthcoming book, “Alt-Labor: Low-Wage Workers and the New Politics of Workers’ Rights.” “They’ve successfully enacted higher minimum wages, stronger penalties for violations, stronger enforcement capacities, etc. at the state and local levels. Their efforts have resulted in the creation of new offices of labor standards in many cities to enforce municipal minimum wages, stronger penalties and regulations in many states [anti-wage theft laws], and many other related laws and ordinances.”

Guardians of Fair Work interviewed for this article look to the Columbus wage theft ordinance, passed in 2020, as a model for Cleveland. They like that it includes a community education program and that staffing and other resources have been allocated to implement the law.

Sarah Ingles, board president of the Central Ohio Worker Center, said having an ordinance has made a difference, including raising awareness about wage theft. She said collaborations between government and community-based groups have either been formed or strengthened to fight wage theft. While Ingles also credits her organization’s many years of outreach and education on the topic, the center saw a substantial increase in people contacting them for help with filing complaints after the law was enacted. She said it went from a couple of cases each month to a dozen or more.

“And that’s not even all the calls that we get asking questions like, ‘I’m not getting paid overtime. Hey, is this legal?’ Or, ‘What should I be asking? What should I be looking for?’”

Heffernan, Schumann and others in Guardians for Fair Work said they look forward to this happening in Cleveland. In the meantime, the mere introduction of the Cleveland ordinance doesn’t escape them.

“Not only practically, but also in terms of symbolism, it shows that the City of Cleveland will not stand for people who are taking advantage of people just trying to make a living,” Schumann said. “It’s wonderful to see this narrative shift.”

Economics Reporter (she/her)
Olivera, an award-winning journalist, covered labor, employment and workforce issues for several years at The Plain Dealer. She broke the story in 2013 of a food drive held for Walmart workers who made too little to afford Thanksgiving dinner. Olivera has received state and national awards for her coverage, including those from the Society for Advancing Business Editing and Writing (SABEW). She was a Nieman Fellow at Harvard University. Olivera believes the sweet spot of high-impact journalism is combining strong storytelling with data analysis.