SearchHomeMenuSign UpDonate

Wage theft in Oregon continues to be 'widespread'

Statesman Journal
August 13, 2012

As the economy continues to sputter along, workers with jobs are likely to count their blessings when payday arrives. But for thousands of employees in recent years, a paycheck has turned into a bounced check.

The Oregon Center for Public Policy spent time analyzing wage claim data from the Bureau of Labor and Information. Juan Carlos Ordonez, communications director with the center, said the analysis demonstrates that wage theft in Oregon is "widespread."

From mid-2006 to mid-2012, the center counted more than 8,500 wage claims that accounted for more than $24 million.

"That's quite significant," Ordonez said. "This is only the tip of the iceberg. The BOLI (Bureau of Labor and Industries) data only captures the workers who really know that BOLI is available as a resource. Many workers are either unaware of the resource or afraid to access it."

Ordonez said wage theft is most frequently a problem in low-wage or low-regulated industries, such as construction and accommodations and food service. Construction was the industry with the highest share of claims relative to the size of its workforce, while restaurants and hotels had the highest total claims.

One resource available to workers is the wage security fund, established by BOLI, that provides payment to workers when a business runs out of resources. Bob Estabrook, communications director at BOLI, said the fund maintains around $1 million on a regular basis, with a limit on individual claim payments at $4,000.

Of the past six fiscal years' worth of data, obtained by the Statesman Journal from the Center for Public Policy, the largest group of claims to the wage security fund was filed recently. Around June, 248 individual claims were filed against Select Onion, LLC, an agribusiness company that was based in Ontario before it went under. The total of those claims was more than $245,000.

In Marion County from July to Aug. 7, 13 claims were registered against four companies for a total of more than $10,000: Bizznaga 303 Grill, LLC; Hog Hollow Nursery; Jerky Hut International and Saddle Mountain Meats.

Money from the security fund comes from a fraction of a percent of the employer tax the state takes in, where that fraction is only added to the fund one quarter of every other year. Still, in 2009, that money came out to about $3.6 million.

There have been instances of individuals attempting to scam the system. Morgan Sanchez of Eugene was sent to jail in 2009 after opening multiple restaurants and refusing to pay workers what they were owed — and refusing to pay back the wage security fund, who reimbursed those workers.

In addition, Estabrook mentioned the View Point Inn, a business that closed at the end of 2009.

"We paid some claims out of the fund to workers at that time, and then found out the business reopened the following spring and then went out of business again," he said. "When we received claims from those workers, we said 'No, we’re not going to pay,' because they didn’t have a good faith relationship with us."

More about: wage theft