Austin Tries to Address Wage Theft, Texas Tries to Make It Harder

David Chincanchan (at right), policy director at Workers Defense Action Fund, speaks during a protest against Tesla's labor practices November 15 (photo by John Anderson)

Back in December, Workers Defense Project and other labor organizations celebrated the passage of Austin's first wage theft prevention ordinance, the third in Texas following Houston and El Paso. Nearly five months later, as the city gears up to hire a wage theft coordinator and drop a public database of thieving employers, the Legislature has a slate of bills that could cut those efforts off at the knees.

Wage theft affects more people than any other type of theft, costing American workers about $50 billion a year and Texas construction workers alone $117 million annually. It can take many forms, including normal pay rates or no pay for overtime, check fraud, misclassification of workers as independent contractors, or simply paying less than the minimum wage. One of the biggest contributors is unpaid overtime, which according to one study by the law firm Bisnar Chase comprised a staggering $13.9 billion owed to Texans in 2022. Construction workers are disproportionately impacted, which makes it even more urgent to address in perpetual boomtown Austin, where employers as powerful as Elon Musk are being investigated for wage theft. According to Workers Defense Project, 1 in 5 construction workers reports being denied payment, and 1 in 3 reports being retaliated against for seeking back pay.

The ordinance creates a publicly available database of employers with a record of wage theft adjudication that do business with the city of Austin; bars them from entering into contracts with the city again; and creates a wage theft coordinator position to assist workers with reporting violations. The city told the Chronicle it is weeks away from hiring the coordinator and plans to launch the database by May. An online complaint form is expected to go live next month, and an on-demand training and tracking function should be completed in June.

That coordinator position is important, as the process for filing a claim is hard to understand – several entities have different jurisdictions over different kinds of cases, including the Texas Workforce Commis­sion, the Department of Labor, and the Travis County District Attorney's Office. "For folks in Texas who are victims of wage theft, there's not a lot of information out there about the resources or the process," says David Chincanchan, Workers Defense Action Fund's policy director. He hopes the coordinator will not only help workers navigate filing claims, but also be proactive in educating the community about wage theft before it happens: "I'm not sure if that is really clear in the ordinance language." The original Council resolution, which passed back in January 2022, floated the idea of the position being housed in the Office of Civil Rights, but it now lives in Financial Services, which Chincanchan says makes sense for investigating city contractors "but also just makes us worry, how much weight is going to be placed on get[ting] information about the ordinance to the general public as well?"

Proactively teaching workers how to file a claim is made more urgent by TWC's statute of limitations, which currently sits at six months from when the wage theft occurred. A bill by Sen. Judith Zaffirini, D-Laredo, making its way through the Legislature, could extend that statute from 180 days to a year. There are, however, many bills that could undermine Austin's ordinance as well, such as the infamous preemption bill, House Bill 2127, which would prevent municipalities from adopting or enforcing any ordinance that is in a "field of regulation" occupied by the state. The language is vague, but labor advocates know it would at least kill Austin's rest break ordinance, which mandates a 10-minute break after every four hours of work. "It's really hard for us to understand the full impact of those bills, because they just list out whole sections of the state code," says Chincanchan. But "we're concerned." Another wage theft preemption bill, HB 3430, "seems specifically aimed at preempting ordinances like [this] one in Austin."

Other bills aim to improve wage theft accountability: Zaffirini's Senate Bill 67, and HB 2872 by Rep. Mary González, D-Clint, would create a statewide database like Austin's. The Department of Labor also has a database that shows violators by ZIP code, and TWC's database lists more than 10,000 employers that owe more than $2,000 in wages and are barred from doing business with the state. However, there's a high bar for even getting on TWC's list: Many claims get dismissed for lack of evidence or workers withdrawing them. Even those that make it don't necessarily pay the wages back: "There are hundreds of millions of dollars in the course of the last 10 years that have just gone completely unpaid," says Chincanchan. A January CBS investigation found that since 2010, nearly 150,000 wage theft claims have been filed in Texas. About half were dismissed, and only about half of those that weren't dismissed ended with workers being paid back. The Department of Labor Austin office alone, which represents 33 counties including and around Travis, reported $1.9 million wages owed in fiscal year 2022 and $400,756 in FY 2023 so far, while the D.A.'s Wage Theft Division has secured three indictments and helped victims recover $14,513.17 in restitution since its inception in 2021. However, the process for returning those wages can take a long time if the employer or the DOL can't find the worker – in that case the wages are returned to the U.S. Treasury.

"We know for a fact that wage theft is really rampant and we haven't taken a whole lot of official action to prevent it," says Chincanchan, underscoring the urgency of the city to act on the ordinance. "Even just a few hundred bucks can make a difference in someone's life and whether they can pay their household bills, utilities, rent, or medical care."

Need to Report Wage Theft?

• Call the Department of Labor at 866/487-9243 or visit dol.gov/agencies/whd/contact/complaints.

• If your employer was found to be in violation, but hasn't paid back your wages yet, visit dol.gov/agencies/whd/wow.

• Call the Texas Workforce Commission at 800/832-9243 or visit their website at twc.texas.gov.

• For the District Attorney's Office to criminally investigate a claim, file a Request to Investigate form at bit.ly/3N5xxIj.