News Release

Many Oregon workers face a more difficult and uncertain path to recovering wages stolen by employers, now that budget cuts have forced the Oregon Bureau of Labor and Industries (BOLI) to lay off staff in its wage and hour investigative unit.

The cuts to BOLI’s budget come at a time when advocates are sounding the alarm over the problem of wage theft. The Oregon Coalition to Stop Wage Theft — a group of over two dozen labor, faith, workers’ rights and community organizations — is calling for legislation that would crack down on employers who steal workers’ wages.

“Wage theft is already a widespread problem in Oregon, and the cuts to the bureau’s enforcement arm threaten one of the most effective ways that victimized workers have for recovering the wages they are owed,” said Janet Bauer, policy analyst with the Oregon Center for Public Policy, a member of the coalition. “These cuts make it all the more important that the legislature take action to protect workers.”

BOLI helps hundreds of Oregon workers each year recover unpaid wages. From 2006 to 2011, BOLI acted on over 8,500 wage claims worth $24.5 million. Many of those claims arose in low-wage industries such as restaurants and nursing care facilities.

Facing a funding loss of $413,000, BOLI has cut services and laid off staff in all of its divisions. The wage and hour division, responsible for handling wage theft claims, has seen its general fund investigative staff reduced from five to two positions. According to BOLI, the remaining two positions must investigate not just wage claims, but other issues as well, such as meal and rest period violations, working conditions and child labor.

As a result, BOLI announced that as of July 1 it stopped accepting claims in which workers allege that their employers failed to pay them an agreed-upon wage rate, vacation pay or benefits pay or their employers wrongfully deducted money from their wages.

BOLI has said that it will continue to accept minimum wage, overtime, prevailing wage claims and claims that qualify for the wage security fund. The wage security fund is primarily for employees whose employer has gone out of business.

The types of claims that BOLI is no longer enforcing accounted for about half of all wage complaints filed with the bureau during the one-year period from July 2010 to June 2011, according to OCPP’s analysis of BOLI data.

The bureau is now advising workers with such claims to take their case to court.

“Even workers with the means to retain an attorney will see slower access to justice, and others will lose access completely,” said BOLI Commissioner Brad Avakian in a letter to the leadership of the Oregon House and Senate.

Avakian said that BOLI will be asking the legislature to reinstate the funding when it meets in 2013.

Beyond restoring funding for the bureau, lawmakers need to enact laws that deter wage theft and make it easier for workers whose wages have gone unpaid to obtain and enforce judgments against their employers, according to Michael Dale, executive director of the Northwest Workers Justice Project (NWJP). His group leads the Oregon Coalition to Stop Wage Theft.

Wage theft can take many forms. It occurs, for example, when employers pay workers less than the minimum wage or a higher agreed-upon wage, don’t pay time-and-a-half for overtime hours, cheat on the number of hours worked, steal tips or don’t pay workers at all.

“Wage theft harms workers and their families, honest employers who must compete against unscrupulous employers, and local economies robbed of the purchasing power that stolen wages represent,” Dale said. “Lawmakers need to stand up for all Oregonians and protect workers against wage theft.”

The Oregon Center for Public Policy is a non-partisan, non-profit institute that does in-depth research and analysis on budget, tax and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.