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Oregon employers rarely pay penalties for stealing wages

News Release
January 20, 2021

Oregon employers face no real downside to stealing the wages of their workers, because the state rarely penalizes them, and employers almost never pay the fines assessed. That’s according to new research by the Oregon Center for Public Policy (OCPP).

“Part of the reason why wage theft is so common is because employers rarely face consequences for stealing from their employees,” said OCPP Policy Analyst Janet Bauer. “Ensuring that workers get paid for their work requires the state to beef up enforcement.”

OCPP reviewed wage claims filed with the Oregon Bureau of Labor and Industries (BOLI) over a six-year period. Although the Bureau found most of the claims to be valid, it assessed penalties in only 16 percent of valid claims, Bauer said.

Even more rare were the instances when employers assessed penalties paid the fines. In just over 1 percent of valid cases did employers actually pay a penalty, according to OCPP. In other cases, once the employer paid the wages owed BOLI closed the case.

Wage theft is a widespread problem, according to OCPP. Wage theft refers to the many ways employers fail to pay workers the wages they have earned, such as failing to pay overtime, requiring people to work off the clock, and stealing tips. By one estimate, it costs low-wage workers nationwide over $50 billion annually.

“Wage theft makes life much harder for many Oregon families, stealing away income that would help them pay for food, rent, and other essentials,” said Reyna Lopez, Executive Director of PCUN, Oregon's Farmworker Union. “Protecting the well-being of Oregon’s low-paid and often essential workers requires that the state take strong action to stamp out wage theft.”

One of the difficulties the state faces when it comes to enforcing wage and hour laws is understaffing at BOLI, according to Bauer. She said that the Bureau’s staff dedicated to investigating wage claims has dwindled to about half of what it was 25 years ago, when factoring in staff cuts and the growth of Oregon’s workforce.

In addition to providing BOLI more resources to investigate wage violations, the state should also give workers the power to enforce the law when state officials lack enforcement capacity, Bauer said. House Bill 2205, known as the Just Enforcement Act, would do just that, giving workers or their representatives the right to sue on behalf of a group of workers for unpaid wages.

“Wage theft won’t go away by itself,” said Bauer. “We need a strong deterrent to make sure that unscrupulous employers don’t steal from their workers.”

The Oregon Center for Public Policy (www.ocpp.org) 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.