Report: Virginia rarely helps workers collect unpaid wages from deadbeat employers

Ronaldo Gonzalez Vasquez says his employer owed him two weeks of pay when his once-reliable boss stopped responding to phone calls and text messages.

So the 21-year-old construction worker who had been building offices in Tyson’s Corner and McLean turned to the state for help, filling out an unpaid wage claim with the Department of Labor and Industry, which is the sole recourse for many low wage workers attempting to recover money owed by employers.

The subsequent investigation yielded a glimmer of hope — his boss admitted to the officer assigned to the case that he owed at least a portion of what Gonzalez Vasquez was claiming — followed by a serious let down. The state said in a letter that that wasn’t enough to collect.

“I didn’t get anything,” Gonzalez Vasquez, who says he moved to the United States from Guatemala to study architecture. “That’s not cheap. I pay my rent. I support myself. I need this money.”

Gonzalez Vasquez’s experience is surprising, but typical, according to the Legal Aid Justice Center, which released an analysis last month that found the department rarely recovers wages for workers while going easy on employers accused of wage theft.

The review, which included cases closed between January 2015 and May of this year, concluded:

• The state ordered employers to pay back wages in less than 19 percent of cases, or 736 of 3,948 claims.

• The state didn’t investigate nearly half of the wage claims filed, dismissing 47 percent without a review, many times based on internal policies that block claims in cases where, for instance, a worker received tips, had a written contract, or consulted a lawyer about their case.

• The department almost never holds employers it finds have committed wage theft accountable beyond seeking repayment, issuing just nine fines and referring no cases for follow-up by law enforcement.

“This has been a problem for a long, long time,” said Nicholas Marritz, a Legal Aid Justice Center lawyer and co-author of the report. “It finally just got to the point where we found the situation to be just so intolerable that we didn’t want to refer workers anymore because we just knew that nine times out of 10 the agency is going to find any reason to dismiss your case.

“We didn’t want to give people false hope.”

The Department of Labor and Industry declined to respond to questions about the report and its findings. In a series of emails exchanged over a two-week period, a representative also declined to comment on Gonzalez Vasquez’s account of his experience or the response he received from the department. They also refused to make anyone from the department available to speak about the wage claim process generally.

“We are in the process of reviewing our wage-claim policies and procedures,” said Jennifer Rose, a director with the department. “We will fully consider their recommendations as part of that process, along with Governor Northam’s recommendations to combat worker misclassification. We look forward to working with (Legal Aid Justice Center) and others to ensure Virginia workers get the pay they deserve.”

Under Virginia law, workers can sue employers for unpaid wages, but that approach rarely makes sense for low wage workers, for whom the cost of hiring a lawyer and lost time in court would outstrip any potential money recovered.

That leaves the Department of Labor and Industry as the primary recourse, and while Marritz acknowledges that not every claim filed is likely valid, he says it’s not plausible that only 18 percent over a four-year period were actionable.

The Legal Aid Justice Center offered about a dozen recommendations they say will improve outcomes for workers, all of which they say can be implemented immediately because the policies that are causing problems were developed internally and are not based on existing laws or regulations.

Among them: Do a better job determining if workers are correctly classified as independent contractors, give workers a chance to respond or provide additional information before claims are dismissed, allow workers to pursue wage claims against businesses that closed but have not filed for bankruptcy, stop rejecting claims from workers that received tips, consulted an attorney or had a written work contract.

They’re also calling for the department to step up enforcement against employers who have been credibly accused of wage theft, with fines and additional referrals to law enforcement.

“There’s basically no incentive for employers to pay their workers on time under Virginia law because the penalty is, ‘Ok, fine, pay them late,’” Marritz says. “It’s madness. It’s got to change. But until that changes, DOLI can do a lot more without passing any new laws and regulations.”

In Gonzalez Vasquez’s case, Marritz says the employer should have been ordered to pay the $400 he admitted to “probably” owing immediately while Gonzalez Vasquez was given an opportunity to present evidence justifying his claim for the full two weeks wages. And he argues that in the absence of any records kept by the employer, Gonzalez Vasquez’s testimony alone should be enough to pursue a claim.

Instead, Gonzalez Vasquez received a one-paragraph reply in the mail that said he would have to pursue the case in court. It requested a response within five days without indicating what if any information the case officer was seeking. And, in either case, Gonzalez Vasquez was out of the country when it arrived and couldn’t respond within the timeframe.

“Workers like Ronaldo did their job,” Marritz said. “All we’re asking is for (the department) to do their’s.”