Social Policy in Ontario

Wage-theft victims lost $28M to poor enforcement, statistics show

Posted on August 2, 2016 in Delivery System

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TheStar.com – News/GTA – Law-breaking bosses are almost never prosecuted, leaving thousands of workers out-of-pocket.
Aug. 2, 2016.   By SARA MOJTEHEDZADEH, Work and Wealth reporter

Victims of wage theft across Ontario have lost out on $28 million over the past six years because the Ministry of Labour failed to collect the pay owed to them by law-breaking bosses, new statistics show.

Just $19 million of the $47.5 million stolen from out-of-pocket workers since 2009 has ever been recovered — a “disturbingly low success rate,” according to a government-commissioned research project requested by the Star. Yet it found less than 0.2 per cent of bosses guilty of monetary violations are ever prosecuted.

“Our study showed that (Employment Standards Act) enforcement is still largely complaint driven but that many employees face barriers, like fear of retaliation, that inhibit them from making complaints,” said Leah Vosko, one of the lead researchers and a professor at York University.

“Moreover, even when violations are validated by the ministry, penalties are rarely imposed on employers and the dispute resolution system provides opportunities for employers to avoid paying employees all that they are owed.”

The research was conducted for the Ministry of Labour as part of its Changing Workplaces Review. An interim report on that process — designed to bolster protections for precarious workers — was released Thursday and identified “serious” problems in the ministry’s enforcement efforts.

A Star investigation into wage theft earlier this year showed around one third of stolen entitlements in Ontario are never recovered, a finding corroborated in the numbers compiled by Vosko along with labour expert Eric Tucker of York University and Ryerson sociology professor Andrea Noack.

Their study shows that the accommodation and food services industry were the most likely to break the law: 78 per cent of complaints assessed by the ministry in that sector turned up violations. Across all industries, 85 per cent of assessed complaints about unpaid wages or termination pay were found to be valid.

Small businesses were also found to be far more likely to be in violation of employment laws. Some 80 per cent of assessed complaints from employees at small firms with fewer than five employees turned up a violation. That figure was around 50 per cent for companies with more than 200 workers.

“The total entitlements that workers are assessed as being owed can be substantial,” the reports goes on to say. “About half are consistently for $1,000 or more, a loss which may result in employees’ inability to meet their basic expenses, or cause them to incur debt.”

“For low-wage employees that is a huge burden they have to bear,” said Avvy Go, director of Metro Toronto Chinese & Southeast Asian Legal Clinic. “I think more prosecutions, more penalties, more notices of violations — all of those are very important.”

Since 2012, the ministry has launched just 41 prosecutions of law-breaking bosses — or 0.18 per cent of cases with confirmed monetary violations, according to the research.

South of the border, numerous jurisdictions have moved to get tougher wage theft — Los Angeles, America’s wage-theft capital, has instituted heavy automatic fines for such violations. Toronto restaurant worker Jonathan Ozols, 30, has been owed more than $875 for three years — and said he wants to see enforcement that works in his city

“Health inspections have been very stringent, they happen quite often, and they’re very thorough. I think (we should have) the same kind of thing with labour — they come in every two or three months, look over everything, make sure everything is safe, workers’ rights, wages, pay, breaks, everything,” Ozols said.

The study recommends numerous fixes, including expanding the ministry’s workplace inspection blitzes instead of relying on workers risking their jobs to make a complaint. It also suggests making the complaints process safer and more accessible, for example, by allowing workers to make anonymous or third-party complaints.

It also says that re-establishing a provincial wage-protection fund, which pays out workers when the money hasn’t been recovered from their bosses, could be “the most straightforward and certain way” to guarantee wage-theft victims get what they are owed.

“At the end of the day, you can have all the best protections in the world,” Go said. “But if the employees cannot have their rights enforced, if their rights only exist on paper, it is not going to improve their life conditions.”

Tags: crime prevention, economy, jurisdiction, poverty, rights, standard of living

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