Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘wage theft’

Trump reversal of Obama-era labor rule is great news for corporations

Friday, June 23rd, 2017

A transgender woman is suing McDonald’s and the owner of the franchised restaurant she worked for after allegedly experiencing sexual harassment and discrimination.

La’Ray Reed said a coworker asked if she were a “boy or girl,” “top or bottom,” or what her “role” was “in the bedroom.” She said she was groped and spied on while using the public toilet.

But for Reed to hold McDonald’s responsible for her alleged mistreatment, her lawyers have to prove that McDonald’s should be held responsible as a joint employer—not just the owners of the franchised restaurant. There is a question of whether the Labor Department’s recent decision to rescind the standard for determining who is a joint employer will hinder her ability to seek justice. The Obama administration’s standard went beyond simply looking at who sets wages and hires people, and considered a worker’s “economic dependency” on the business.

McDonald’s has resisted this legal responsibility for many years, and says it does not have control over things like pay and working conditions at franchised restaurants. In 2016, McDonald’s settled a wage-theft class action through a $3.75 million payment that allowed it to dodge responsibility. McDonald’s released a statement that said it “reconfirms that it is not the employer of or responsible for employees of its independent franchisees.”

Industry groups have been pushing against efforts to call businesses like McDonald’s joint employers for many years now. In 2015, Matt Haller, a lobbyist at the International Franchise Association called a 2015 National Labor Relations Board ruling on whether a recycling company could be called a joint employer, “a knife-to-the throat issue for the franchise model.” He told the Washington Post, “You’d be hard pressed to find a business that shouldn’t be concerned about the impact of this joint employer standard.” Haller said IFA was “pleased” at the department’s decision to rescind guidance this month.

But there is certainly hope for La’Ray Reed, and other workers like her who are experiencing discrimination or issues such as wage theft at work. Since the joint employer guidance does not have the full force of law, it is not as important to these cases as existing tests for determining if an employer relationship exists. Under the economic realities test, applied under Title VII of the Civil Rights Act of 1964 and the Fair Labor Standards Act, among other laws, a relationship exists if someone is economically dependent on that business. Paul Secunda, professor of law at Marquette University, who teaches on employment discrimination law, said this test will play a much bigger role in determining whether an employee can hold McDonald’s responsible for discrimination.

“Just the Trump administration withdrawing this guidance does not mean in any way that these claims are doomed to failure or are otherwise are not plausible,” Secunda said. “Because what matters the most with employment law is focusing on employment discrimination under Title VII and what other state laws apply there.”

‘This control standard is the standard that has been in place since the 1950s and ‘60s, and so it doesn’t make sense to have different standards under different laws. It only makes sense to hold liable those who control what happens in the workplace,” Secunda added.

Representatives of Fight for $15, a group of fast food workers, teachers, and adjunct professors advocating for better pay backed by the Service Employees International Union, said McDonald’s has failed to enforce its own policies.

“The growing number of allegations suggests a failure by McDonald’s to enforce the zero-tolerance policy against sexual harassment outlined in its Operations and Training and Policies for Franchisees manuals,” the labor group told BuzzFeed.

“There are terms and conditions that are set by the national parent McDonald’s,” Secunda said. “It has a policy on sexual harassment and equal opportunity that all its franchisees have to meet: that it will not tolerate sexual harassment whether based on transgender status or otherwise in the workplace. [The argument is] that McDonald’s parent company exercises meaningful control—that is being free from sexual harassment and demeaning conduct in the workplace.”

None of this means that any parent corporation is responsible for any franchisees’ lability, Secunda said, since every case must be decided on its facts, but where employers do exercise meaningful control over employees, there should be a possibility that they will be held responsible.

The decision to rescind this joint-employer guidance will by no means kill any possibility of holding a corporation, such as McDonald’s, responsible, and a judge would be more likely to consider the rule of law first, Secunda said, but the joint employer guidance would still be a helpful resource for the defendant to have in its arsenal.

“If I were a conservative jurist who wanted it to come out on the corporate conservative side of the world, I see that they could use this. ‘You know they’re the expert agency, so they can’t be wrong,’” Secunda said. “But I just think that would be disingenuous, because the agency has obviously changed its position based on the politics on the administration. And this should be an answer that has nothing to do with politics. It should be based on rule of law.”

This blog was originally published at ThinkProgress on June 22, 2017. Reprinted with permission. 

About the Author: Casey Quinlan is a journalist covering education, investments, politics, crime, and LGBT issues.

Bosses are stealing billions from their workers' paychecks, but it's not treated like a crime

Monday, May 15th, 2017
 Here’s a kind of theft almost no one goes to prison for. When an employer doesn’t pay workers the money they’ve earned, it has the same effect as if they got paid and then walked out on the street and had their pockets picked. But somehow wage theft—not paying workers the minimum wage for the hours they’ve worked, stealing tips, not paying overtime, and other ways of not paying workers what they’ve earned—doesn’t get treated as the crime it truly is. It has a huge impact, though, as a new study from the Economic Policy Institute shows. The EPI looked at just one form of wage theft: paying below minimum wage. Just that one type of violation steals billions of dollars out of workers’ paychecks:
  • In the 10 most populous states in the country, each year 2.4 million workers covered by state or federal minimum wage laws report being paid less than the applicable minimum wage in their state—approximately 17 percent of the eligible low-wage workforce.
  • The total underpayment of wages to these workers amounts to over $8 billion annually. If the findings for these states are representative for the rest of the country, they suggest that the total wages stolen from workers due to minimum wage violations exceeds $15 billion each year.
  • Workers suffering minimum wage violations are underpaid an average of $64 per week, nearly one-quarter of their weekly earnings. This means that a victim who works year-round is losing, on average, $3,300 per year and receiving only $10,500 in annual wages. […]
  • In the 10 most populous states, workers are most likely to be paid less than the minimum wage in Florida (7.3 percent), Ohio (5.5 percent), and New York (5.0 percent). However, the severity of underpayment is the worst in Pennsylvania and Texas, where the average victim of a minimum wage violation is cheated out of over 30 percent of earned pay.

Young workers, women, immigrants, and people of color are disproportionately affected because they’re overrepresented in low-wage jobs to begin with. This wage theft is keeping people in poverty—the poverty rate among workers paid less than the minimum wage in this study was 21 percent, and would have dropped to 15 percent if they’d been paid minimum wage. If their bosses had followed the law, in other words.

The wage thieves rarely face penalties for stealing, and when they do:

Employers found to have illegally underpaid an employee are usually required only to pay back a portion of the stolen wages—not even the full amount owed, much less a penalty for violating the law.

The law basically gives employers permission to steal from workers, in other words. And it sure won’t be getting better under Donald Trump.

This blog originally appeared at DailyKos.com on May 12, 2017. Reprinted with permission. 

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006 and labor editor since 2011.

The Trump Economy Myth and Job-Killing Policies

Thursday, April 13th, 2017

Making America Great Again; every time a U.S. company hires a hundred people, or even a dozen, President Trump’s support network blasts out the message that this is what he’s doing. Now they’re crowing that unemployment fell to 4.5 percent in March, even though many say this number underrepresents how many people are actually out of work.

Only 98,000 jobs were actually gained in the month, about half of what economists had expected. And even if these new jobs are something to crow about, it’s not as if they have anything to do with Trump.

Propaganda is one thing, but Trump’s actual policies will hurt job and wage growth once they kick in.

Obama Momentum

Remember when President Obama had been in office a few months, and the fiscal year 2009 deficit was reported to be $1.4 trillion? Right-wing propaganda outlets showed charts drawn to convey that the 2009 budget deficit was his fault.

The 2009 fiscal year budget ran from October 1, 2008 to September 30, 2009. Obama’s first budget year began the following month. The 2009 budget deficit wasn’t an “Obama deficit,” is was a Bush deficit. Obama did not have time to do anything. For the same reasons, the 2017 economy, and any health it has, is still Obama’s.

In fact, when Obama DID do something this is what happened:

That job reversal was the result of actual policies put in place by Obama, not Republican propaganda.

Propaganda, Not Policies

Like almost everything Republican, the Trump administration is almost entirely about propaganda, not actual, rubber-meets-road policy. Healthcare is the best example of this. After years of propaganda opposition to Obamacare, Republicans had no actual coherent, alternative policy plan to put forward, and were unable to come up with one when the opportunity came for them to do it. The actual policies they finally came up with would have caused 24 million Americans to lose their healthcare.

Propaganda might achieve a propaganda goal, policies get actual things done.

As of today, there is no real Trump economic policy in place. He has submitted a ridiculously extreme budget proposal. He has proposed to “study” trade. He has no real “trillion-dollar” infrastructure plan – his budget proposal actually cuts infrastructure spending – and his tax “reform” plan does nothing more than give corporations and wealthy people huge breaks.

Actual Trump Policies Undercut Jobs And Wages

Trump’s actual policies will undercut job and wage growth. Right off the bat, Trump’s budget proposal would eliminate as many 200,000 federal jobs.

Trump is trying to reverse the “overtime rule” that increases the salary threshold for receiving overtime pay from $23,660 per year to $47,476. This rule is a big deal and would mean that would immediately boost the pay of 12.5 million workers, if Trump allows it to go into effect. Even with the rule the percent of workers who are eligible for overtime pay would still be lower than it was in 1975.

Trump’s executive orders also undercut job and wage growth. He has removed protections against wage theft and rights violations by federal contractors, affecting one in five workers.

Another example of actual Trump policies affecting jobs is in the energy sector. Calling climate change a “hoax,” Trump wants to promote oil and coal jobs at the expense of wind and solar jobs. But the U.S. solar power industry now employs more workers than coal, oil and natural gas combined. He wants to gut the auto fuel economy rules, undercutting opportunities for renewable-fuel companies like Tesla to innovate.

Stocks Up But Trump Economy Is A Myth

The stock market has risen under Trump; Tomahawk missile-maker Raytheon stock just went way up. Cruise missile strikes aside, bumps like these aren’t based on economic fundamentals or sound projections, but instead on the expectation of windfalls for corporations and the already-wealthy stock-owning investor class through the huge tax cuts Trump has promised.

But beyond momentary market gains,  the idea of a booming Trump economy is a myth – at least for people who work. There are no actual policies, existing or on the horizon, aimed at actually boosting jobs and wages. Only bluster. In fact, Trump has said we need to reduce American wages to the point where we can be “competitive” with Mexico and China. Yes, he said that.

His executive orders so far undercut jobs and wages. His budget eliminates jobs. His dramatic cuts in the things government does to make our lives and economy better — education, scientific research, regulation, etc. — will eat the seed corn of our future prosperity.

Trump does not offer real policy, only the propaganda of the moment, to be reversed at the next moment if convenient.

This post originally appeared on ourfuture.org on April 10, 2017. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Republicans Repealing A Rule To Stop Wage Theft? It’s Who They Are

Friday, March 10th, 2017

Who could be against rules that try to protect workers from having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations? See if you can guess who.

Last August, President Obama implemented a ‘Fair Pay And Safe Workplaces’ executive order that aims to stop companies from getting federal contracts if they violate labor and civil rights laws, steal workers’ wages and risk their health and safety. Actually, it just says the government will take violations into consideration, and yes, he waited eight years to implement this.

So of course, Republicans being who they are, have now voted in the House and Senate to repeal this act, exposing workers once again to having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations.

Obama’s executive order also required companies bidding on federal contracts to disclose if they had been busted for violating federal and state labor laws. Government procurement officers would then try to work with these companies to come into compliance with the laws and could deny contracts if they refused to.

That kind of government meddling against corporate wage theft and health & safety violations was just too much for Republicans. On February 2, the House voted 236 to 187 to get rid of this rule. Three “Democrats” voted with Republicans to protect corporate wage-stealers: Jim Costa (CA 16), Luis Correa (CA 46) and Henry Cuellar (TX 28).

Remember those names, and if you live on one of those districts click this and consider running for office yourself.

On March 6, the Senate voted 49 to 46 to repeal, the Fair Pay and Safe Workplaces act, with all Democrats voting on the side of protecting workers, and all Republicans voting on the side of protecting corporate wage-stealers.

This bill is waiting for President Trump to sign or veto it. Will Trump, who campaigned on the side of working people, sign this repeal of an act that tries to protect workers from having their pay stolen, having their health and safety put at risk and being subjected to civil rights and labor law violations? Heh.

This post originally appeared on ourfuture.org on March 9, 2017. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Wage Theft Against Immigrants Threatens All Working People

Tuesday, November 22nd, 2016

wage-theft-against-immigrants-threatens-all-working-people_blog_post_fullwidthThe United States holds sacrosanct the principle that regardless of who you are, or where you come from, your hard work will be rewarded.

For day laborers in America, at least half of whom report experiencing wage theft, this ideal rings hollow. In a country so expansive and so diverse as America, there must be mechanisms in place to ensure the principle of getting paid for the work you do is a reality for everyone.

Take my story, for example. After a hard day’s work, when I asked for my earned wages, my employer refused to pay me. He went on to call the police and falsely accused me of attempting to rob him with a knife. After a police investigation, it was clear I was a victim of extortion and false charges. However, since I didn’t have the proper documentation, I was placed in deportation proceedings, which I am still fighting to this day.

Immigrant workers like me are struggling to provide for our family, yet have to work extra to organize with other workers, and to get informed about our rights to make sure we are not being exploited or robbed of our wages. Many of us who search for work on the street corners face very difficult situations on a daily basis. Not only do we receive insults by passerby, but employers themselves often try to undercut us simply because they think that we are not organized and have no support. As we continue to organize, we have developed power as working people and have had significant victories as well.

I know firsthand the confusion, humiliation and helplessness felt by those who have been robbed or shortchanged by their employers. This can happen to anyone. Only a few months ago, we learned cafeteria staff for the U.S. Senate faced issues of wage theft, too. Their fight was very important because they are helping to create a just workplace for all of us. Such a significant victory has waves of impact that reach other parts of the country and inspire many of us to continue to struggle for justice.

The U.S. Senate cafeteria workers’ encounter with wage theft is very typical of what occurs to other working people across the country, but for day laborers and immigrants like myself, our encounters with wage theft go beyond the denial of earned wages. Because of the inherent isolation of our work, and the irregularity of our schedules and employers—with the added issue of growing xenophobia and racism directed at Latino immigrants—we are seen as easy targets for bad employers, and often experience threats of deportation or get falsely accused of wrongdoing.

Many of us have to battle every day to stop employers who want to undercut us. Most of the time we have to work and struggle to get our employers to even pay us for the hours we’ve worked. The institutional protections that we have are often limited, and sometimes it feels like they are nonexistent.

Most workplaces are not the Senate cafeteria. Day laborers throughout the country are experiencing wage theft every day. The Department of Labor and national politicians must recognize our plight and devote the necessary resources to stop this epidemic of wage theft. Though we will continue to organize and fight for justice, it is necessary for the institutions created to hold up the labor protections to benefit all workers.

This blog originally appeared in aflcio.org on November 21, 2016.  Reprinted with permission.

Jose Ucelo is a day laborer and immigrant worker.

Think It’s Tough for Labor Now? Just Wait Until Trump Takes Office in January

Friday, November 18th, 2016

photo_321703[1]In 63 days, organized labor is going to find itself in a new political reality, which it seems totally unprepared for. Donald Trump will be president; the Republicans will control the House and Senate and one of Trump’s first tasks will be to nominate a new Supreme Court justice. Though Trump was tight-lipped about specific policy proposals, his campaign and the current constitution of the Republican party do not bode well for labor.

Trump’s actions will largely fall into one of four categories: judicial, legislative, executive and at the level of federal agencies. Each potential move will take various levels of cooperation from other branches of government and varying amounts of time to complete.

On Day 1 of his new administration, President Trump can simply rescind many of Barack Obama’s executive orders that benefited large groups of workers. Chief among these were EO 13673, which required prospective federal contractors to disclose violations of state and federal labor laws, and helped protect employees of contractors from wage theft and mandatory arbitration of a variety of employment claims. Similarly, EO 13494 made contractor expenses associated with union busting non-allowable, thereby helping to ensure that workers can exercise their labor rights.

At the agency level, Trump will have the opportunity to fill vacancies on the five-person National Labor Relations Board (NLRB), effectively turning what has been one of the most pro-worker boards in recent memory into one that is more concerned with employers’ interests. The NLRB is one of the more politicized federal agencies, and it is not uncommon for a new NLRB to overturn a previous board’s rulings. A conservative board would put into jeopardy recent gains, including the requirement of joint employers to bargain with workers, the rights of graduate students to form unions, the rights of adjuncts at religious colleges to form unions and the protections from class action waivers in employment arbitration agreements, which effectively block access to justice for too many.

Similarly, Trump can immediately dismiss the entire Federal Service Impasses Panel (FSIP) and appoint his own members. The FSIP is a little-known federal agency that functions like a mini-NLRB to resolve disputes between unionized federal employees and the government.

Donald Trump may be able to not only roll back many of Barack Obama’s accomplishments, but also change the face of labor law for decades to come. (AFL-CIO/ Facebook)

Donald Trump may be able to not only roll back many of Barack Obama’s accomplishments, but also change the face of labor law for decades to come. (AFL-CIO/ Facebook)

At the legislative level, various anti-worker bills sit ready for a GOP-led push. Perhaps chief among them is the National Right to Work Act, which would place every private sector employee (including airline and railway employees currently under the Railway Labor Act) under right-to-work. Right-to-work is the misleading law that prohibits unions from requiring that workers represented by the union pay their fair share. Such a bill was introduced last year by Sen. Rand Paul, and it had 29 co-sponsors, including Senate Majority Leader Mitch McConnell. Trump announced on the campaign trail that his “position on right-to-work is 100 percent,” so this will likely be an area where he has common cause with the GOP-controlled Congress.

At the judicial level, there is also a strong possibility that we will see a sequel to the Friedrichs case at the Supreme Court. Friedrichs was widely anticipated to bar fair share fees and place all public sector employees under right-to-work, but ended in a deadlock after Justice Antonin Scalia’s death. It is likely that any Supreme Court justice that Trump chooses will be as critical of fair share fees as Justices Samuel Alito and John Roberts, and would provide a critical fifth vote in changing long-standing precedent regarding the allowance of such fees. Groups like the National Right to Work Committee and Center for Individual Rights often have cases in the pipeline that could be pushed to the Supreme Court when the opportunity arises.

Similarly, at the judicial level, Trump will likely have his Department of Labor drop appeals to court decisions that enjoined or overturned pro-worker rules, such as the rule requiring union-busters to disclose when they are involved in an organizing campaign. Dropping the appeals would be an easy route to kill the rules, rather than going through a more time consuming rulemaking process to rescind them.

All indications are that labor has been caught unprepared for a President Trump and a GOP-controlled Congress and Supreme Court. With such broad control over every branch of government, Trump may be able to not only roll back many of Obama’s accomplishments, but also change the face of labor law for decades to come.

This post originally appeared on inthesetimes.com on November 17, 2016.  Reprinted with permission.

Moshe Z. Marvit is an attorney and fellow with The Century Foundation and the co-author (with Richard Kahlenberg) of the book Why Labor Organizing Should be a Civil Right.

L.A. Port Strike Today Over Federal Contractor Wage Theft

Thursday, November 3rd, 2016

dave.johnson

 

“An order that creates a culture of legal compliance could have a transformative impact on American industry.” George Faraday, Legal and Policy Director at Good Jobs Nation

 

Truck drivers and warehouse workers working for federal contractors at the Port of Los Angeles are striking for 48 hours to draw attention to wage theft and other violations. These workers work for companies that contract with the federal Department of Defense. They say they have been misclassified as “independent contractors”, had their wages stolen and have been retaliated against for exercising the right to organize.

The workers are doing this because President Obama’s Fair Pay & Safe Workplaces Executive Order protecting low-wage workers on federal contracts from wage theft and other labor law violations takes effect today. Contractors are supposed to start reporting whether they are found in violation of wage theft and other labor laws and regulations. Later the government can use this information in the decision process for awarding contracts.

On a press call discussing today’s strike, Jaime Martinez, a port worker, explained that he has worked for K&R, a federal contractor, for 19 years. “We are on strike today for issues including respect and and wage theft. We earn very low wages, with no benefits and no workers compensation because we are classified as independent contractors.”

Obama’s Fair Pay and Safe Workplaces Executive Order

July’s post, Obama’s ‘Fair Pay and Safe Workplaces Executive Order’ explained,

President Obama’s executive order cracks down on federal contractors who break hiring, health and safety, and wage laws. It also prohibits employers from requiring mandatory arbitration agreements with employees of federal contractors, in order that workers can get their day in an actual court instead of being forced to appear in front of an arbitrator picked and paid for by the company when there is a dispute involving the Civil Rights Act or related to sexual assault or harassment.

Specifically, the new rules require companies that bid on federal contracts to disclose wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights violations from the prior three years. Federal contractor hiring officers are to take serious violations into account before awarding contracts. These officers will be issued guidelines on whether certain violations “rise to the level of a lack of integrity or business ethics.”

This Is A Big Deal

According to Good Jobs Nation this will affect a large number of workers around the country,

  • A U.S. Senate investigation revealed that federal contractors were responsible for nearly one-third of the largest U.S. Department of Labor penalties for wage theft and other legal violations;
  • A report by the National Employment Law Project found that 1 in 3 low-wage federal contract workers are victims of wage theft; and
  • An analysis by the Government Accountability Office showed that known legal violators have continued to receive lucrative federal contracts because of lax government oversight and enforcement.

“Creates A Culture Of Legal Compliance”

Companies with federal government contracts employ 1 in 4 American workers. Thanks to this executive order they will have to demonstrate a record of labor law compliance, including wage and hour and health and safety laws. On the press call discussing today’s strike Good Jobs Nation’s Legal and Policy Director George Faraday said, “An order that creates a culture of legal compliance could have a transformative impact on American industry.”

Fair Pay Hotline And Website

Also today, Good Jobs Nation is launching the first-ever national legal hotline – 1-844-PAY-FAIR – for federal contract workers to report law-breaking. Information is also available at goodjobsnation.org/payfair,

If you are a worker on a federal contract and you believe that are not receiving the pay and benefits owed to you under federal laws – like the Service Contract Act or the Davis Bacon Act – contact Good Jobs Legal Defense at 1-844-PAY-FAIR or click below.

This post originally appeared on ourfuture.org on October 25, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

 

McDonald's settles with franchise workers for $3.75 million in wage theft lawsuit

Tuesday, November 1st, 2016

LauraClawson

McDonald’s is still insisting it isn’t a joint employer of workers in franchise restaurants, but even so, it’s paying out millions to settle a lawsuit over labor law violations by a franchisee:

In a filing in U.S. district court in San Francisco on Friday, lawyers representing about 800 employees at five restaurants owned by a single franchisee said Illinois-based McDonald’s would pay the workers $1.75 million in back pay and damages and $2 million in legal fees. […]

The 2014 lawsuit claimed McDonald’s and the franchisee, Smith Family LP, violated California law by failing to pay overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms. The franchisee previously settled the claims for $700,000.

gettyimages-534355124

McDonald’s exerts tight control over how its franchisees do things it cares about. That happens not to include little things like obeying labor laws—but because McDonald’s control over how its franchisees do business is so well established, the National Labor Relations Board is moving toward treating McDonald’s as a joint employer. This settlement doesn’t settle that question, but at least these workers are getting a measure of justice.

This article originally appeared at DailyKOS.com on October 31, 2016. Reprinted with permission.

Laura Clawson is a Daily Kos contributing editor since December 2006. Labor editor since 2011.

 

Inequality Is Still the Defining Issue of Our Time

Monday, October 17th, 2016
screen-shot-2016-10-17-at-9-05-23-am
In 2011, President Obama, speaking in the wake of Occupy Wall Street, called inequality the “defining issue of our time.” Now Jason Furman, chair of the Council on Economic Advisors, argues that Obama “narrowed the inequality gap” more than any president in 50 years. The nonpartisan Congressional Budget Office echoes the observation that income inequality after taxes is no higher than it was in 2000, and that Obama’s policies have done more to reduce inequality than any other policies on record.

Don’t take down the barricades. Inequality remains extreme and continues to widen. And the populist uprisings that have roiled American politics have clear opportunities to tackle the core problem after the election.

As James Kwak at Baseline Scenario notes, the council’s report measures Obama’s reductions against what inequality would have been if George Bush’s policies had been sustained through the Great Recession. The progress comes largely from progressive tax changes. Obama raised taxes marginally on the very wealthy (allowing the Bush tax cuts to expire for very rich, particularly the 15 percent tax on capital gains, and taxing investment income under Medicare to help pay for health care reform) and increased tax subsidies to low-wage workers (expanded child tax and expanded earned-income tax credits.) These advances, while praiseworthy, don’t come close to reversing the regressive tax polices of the past decades.

As Emmanuel Saez has shown, the richest 1 percent continue to pocket the bulk of the rewards of growth. The income share of the top 1 percent before taxes fluctuates with the business cycle, but it has been rising over time. Despite recent increases, household income for the vast majority of the population has still not recovered from the Great Recession. These rewards largely reflect the underlying economic structures that determine what Jacob Hacker has dubbed predistribution (the pretax distribution of income): globalization, bargaining power of labor, executive pay structures, demand for skills, etc. As Kwak concludes, “It’s hard to point to anything [Obama] did that affected the underlying economic factors producing the increase in inequality.”

This elevates the importance of fierce political battles that will occur after the November elections. First, President Obama plans to join with the business lobby to push the Trans-Pacific Partnership Treaty through the lame-duck session of Congress. The TPP is another in the corporate trade and investment deals that have proved so devastating to American workers. Even trade-accord advocates now admit that our globalization strategy has contributed directly to growing inequality, putting American workers in competition with low-wage and repressed labor abroad, with no sensible industrial or comprehensive strategy for impacted communities and workers.

The mobilization against the TPP will engage the populist energies in both parties. Sanders’s new organization Our Revolution will join with labor and the bulk of the activist Democratic base to drive an intense opposition that will make the Tea Party look like, well, a tea party. If the TPP is defeated, the next administration will be forced to rethink America’s globalization strategies, moving toward more balanced trade, ending the special privatized investor arbitration system, and focusing attention on the tax traps and dodges that allow global corporations to evade hundreds of billions in taxes. Even if the TPP passes, the fury of the opposition could force an understanding that the old game is over.

Similarly, efforts to lift the floor under workers already in motion should gain new energy. The Republican House leadership won’t even allow a vote on hiking the minimum wage, but Fight for $15 and other movements are winning wage hikes in cities and states across the country. Measures to guarantee paid sick and vacation days and to crack down on wage theft and demand equal pay for women are beginning to move. These efforts—particularly at a time of relatively low unemployment—can help workers gain a greater share of the profits they help to produce.

Obama recently admitted that stronger unions are vital to redressing inequality. Yet he abandoned campaign promises to make labor-law reform a priority early in his administration and has refused to issue an executive order giving union employers priority in government contracting. Union support was central to Clinton’s victory in the primaries. When she takes office in January, activists should join with federal contract employees to demand issuance of a Good Jobs executive order that would encourage firms with federal contracts to respect labor rights. And Democrats at every level of executive office should be pushed to put government on the side of workers.

Finally, populist energy should be directed at curbing obscene CEO pay packages. Academics have exposed the fraudulence of “performance pay” bonuses. Investors bemoan the perverse corporate policies generated by executive efforts to drive up the value of their bonuses. Yet boardrooms haven’t got the message. It is time to turn up the heat. For example, executive compensation rules to discourage Wall Street risk-taking were supposed to have been written nearly five years ago. They haven’t been, and progressives in Congress led by Elizabeth Warren and Bernie Sanders should expose this outrage. Unions, public pension funds, and university endowments should use their votes to challenge excessive CEO compensation packages. Sanders’s Our Revolution might join with other progressive groups in challenging the worst abusers at their annual shareholders meetings.

Inequality remains a defining issue of our time. The advances made under Obama deserve applause, but the real work remains to be done. This presidential season has exposed the growing revolt against business as usual. Now activists must seize the opportunity to build on the energy after November.

This blog originally appeared in ourfuture.org on October 13, 2016. Reprinted with permission.

Robert L. Borosage is the founder and president of the Institute for America’s Future and co-director of its sister organization, the Campaign for America’s Future. The organizations were launched by 100 prominent Americans to develop the policies, message and issue campaigns to help forge an enduring majority for progressive change in America. Mr. Borosage writes widely on political, economic and national security issues. He is a Contributing Editor at The Nation magazine, and a regular blogger at The Huffington Post. His articles have appeared in The American Prospect, The Washington Post, The New York Times, and the Philadelphia Inquirer. He edits the Campaign’s Making Sense issues guides, and is co-editor of Taking Back America (with Katrina Vanden Heuvel) and The Next Agenda (with Roger Hickey).

Papa John’s Franchisee Faces Jail Time Over Stealing Workers’ Wages

Friday, July 17th, 2015

Bryce CovertOn Wednesday, the owner of nine Papa John’s franchises in New York City pled guilty to the first criminal case brought by New York Attorney General Eric Schneiderman against a fast food franchisee over wage theft.

According to court documents, including company records obtained by the attorney general’s office, Abdul Jamil Khokhar, the franchisee, and BMY Foods Inc. paid its 300 current and former workers the same base rate for any hours they worked after putting in 40 a week, which under law should be paid time-and-a-half. To get away with paying less, they allegedly paid overtime hours in cash and created fake names for the employees in the timekeeping system. They then filed fraudulent tax returns that left out the cash payments made to employees under the false names.

Khokhar’s sentencing is set for September 21, when he faces 60 days in jail. He also faces paying the employees $230,000 in back wages as well as an additional $230,000 in damages and $50,000 in civil penalties.

BMY Foods Inc. declined to comment. A Papa John’s spokesperson said in an emailed statement, “Papa John’s is aware of the recent incident involving one of our New York franchisees who was taken into custody this morning. These allegations do not reflect our position as a company. We have a strong track record of compliance with the law. We do not condone the actions of any franchisee that violates the law. This particular franchisee has divested itself of most of its restaurants and is in the process of exiting the system. We will continue to monitor the situation closely and take appropriate action.”

Jail time is unusual for people who perpetuate wage theft, but Schneiderman may not be done. “My office will not hesitate to criminally prosecute any employer who underpays workers and then tries to cover it up by creating fake names and filing fraudulent tax returns,” he said in a press release. “We will continue to be relentless in pursuing the widespread labor law violations, large and small, which we have found in the fast food industry.”

This isn’t the first time Schneiderman has gone after Papa John’s franchisees. In October of last year, he sued some in New York for allegedly stealing wages from more than 400 delivery drivers, seeking more than $2 million in backpay, damages, and interest. Then in February he won a nearly $800,000 judgement against another who allegedly ripped off employees.

He’s also focused on wage theft prosecutions in the New York fast food industry generally. In March of last year, he won a $448,000 payout from 23 Domino’s Pizza franchise owners and a nearly $500,000 one from a McDonald’s franchisee.

Wage theft, where workers aren’t paid minimum wage and/or overtime, are made to work off the clock, or are made to buy uniforms or equipment out of their own paychecks, is particularly rampant in the fast food industry. One poll found that about 90 percent of these workers have experienced at least one form of theft. But it’s also not limited to fast food. In 2012, at least $933 million was won in backpay by the Department of Labor, state labor departments, state attorneys general, and research firms. That sum dwarfs the less than $350 million taken in all robberies that year. Even that understates the extent of the problem, however, since many employees don’t file formal charges; it’s estimated that the country’s employers steal more than $50 billion from their employees every year.

Some places have taken steps to go beyond federal wage and hour laws to try to crack down on wage theft. On Wednesday, Jersey City, New Jersey unanimously adopted a law that would revoke city licenses from any company that doesn’t reimburse workers for lost wages, a step that has been taken in other places across the country. Other cities have upped the penalties for wage theft and enhanced enforcement measures.

This blog was originally posted on Think Progress on July 16, 2015. Reprinted with permission.

About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

Your Rights Job Survival The Issues Features Resources About This Blog