Over 450 American Companies Penalized Over $9 Billion for Cheating Workers Out Of Their Wages
A new report titled Grand Theft Paycheck: The Large Corporations Shortchanging Their Workers’ Wages reveals that over 450 American companies have increased profits by cheating employees of their wages. The report was published by the Corporate Research Project of Good Jobs First and Jobs With Justice Education Fund.
According to the report, court records showed that since 2000, thousands of cheated workers have resorted to the courts to seek redress in over 1,200 litigations brought against their employers. Some of the aggrieved workers claimed their former employees had forced them to work off the clock without pay; others said they were compelled to work overtime periods without any pay. Such improper conducts are known as wage theft, PR Watch states.
Many Forbes Fortune 500 Companies Caught Practicing Wage Theft
“Our findings make it clear that wage theft goes far beyond sweatshops, fast-food outlets and retailers. It is built into the business model of a substantial portion of Corporate America,” said Philip Mattera, Research Director at Good Jobs First and lead author of the report.
The courts have ordered Corporate America to pay out a total $8.8 billion as compensation to former workers. Many of these ex-staffers ranged from cashiers to sales representatives to financial advisors and anything inbetween. Apart from the $8.8 billion shelled out to settlements with workers, the offending companies also paid out $400 million in penalties to the Wage and Hour Division of the US Department of Labor.
Companies named in the court records include well-known companies listed in Forbes Fortune 500 and Fortune Global 500 and are often featured in Forbes. Some of the companies are –
- Bank of America
- Wells Fargo
- JPMorgan Chase
- State Farm Insurance
- Home Depot
- Verizon Communications
- Best Buy
Corporate America Wage Theft Cuts Across Several Industries
As the report found, the companies named in court documents for engaging in wage theft cut across all industries. Many of them have been penalized severally for individual and collective action lawsuits. Some of these are –
- Walmart – penalized $1.4 billion for wage theft
- FedEx – penalized $502 million for wage theft
- Bank of America – penalized $381 million for wage theft
- Wells Fargo – penalized $205 million for wage theft
- JPMorgan Chase – penalized $160 million for wage theft
- State Farm Insurance – penalized $140 million for wage theft
The retail industry saw the highest total wage theft penalties, Walmart and other companies in the retail industry were penalized a total $2.7 billion. Companies in the financial services were fined a total $1.4 billion as penalties for wage theft; companies in the freight and logistics industry were penalized a combined $828 million; those in business services penalized $611 million, and companies in insurance fined $557 million.
Adding insult to injury for workers, most of the companies participating in wage theft are highly profitable. “Among the dozen most penalized corporations, all but two had an annual net income of more than $2 billion in their most recent fiscal year. AT&T, JPMorgan Chase and Wells Fargo each had more than $20 billion in profits. These companies pay their chief executives generous salaries, bonuses and perks. CEOs at AT&T, Bank of America, JPMorgan Chase and Walmart each receive annual compensation of more than $20 million,” the report stated.
The report also offered policy recommendations to address the wage theft. “While wage theft is pervasive, it is also preventable,” said Jobs With Justice Education Fund Senior Policy Analyst Adam Shah, who contributed policy recommendations to the report. You can see the full report here.