Last Thursday, Chicago passed a new wage theft law that gives the city the power to revoke the business licenses of companies convicted of wage theft. While many US states have recently passed tough wage theft laws, Chicago is now the largest city in the US that has this kind of enforcement power. A local worker centre, Arise Chicago, led a campaign to win the ordinance.
As news of this important win spread through social media, some asked if it could be a model for worker rights organizing in Ontario cities. Wage theft is a growing problem in Ontario. In a recent Workers’ Action Centre study, 1 in 3 workers surveyed reported facing unpaid wages in the last 5 years. We get dozens of calls every week on our phone-line from workers owed wages. Some like Juan Carlos have waited years to get paid, even after the Ministry of Labour has ordered their employer to pay. Many workers feel employers are confident to break the law because there is little chance of getting caught, or facing any penalty.
That’s why WAC is calling on the Ministry of Labour to increase fines and penalties for wage theft. Fines for employers found guilty of wage theft in Ontario start at a measly $250. Many employers are not fined at all (less than 0.5% of employers were fined in 2010). This means there is usually no cost to employers who break the law. We think Ontario should follow the lead of US states that require employers found guilty of wage theft to pay workers interest on unpaid wages. In New York State, workers can be paid double the wages owing to them when there are repeat and serious violations. We need to adopt these kinds of enforcement measures in Ontario so there are real consequences for employers who break the law.
But could cities also play a role in addressing wage theft? It’s an interesting idea. The City of Toronto issues business licenses to many types of low-wage industries such as car washes, grocery stores, coffee shops and restaurants and some types of construction businesses. However, other sectors with high rates of wage theft such as painting, cleaning and manufacturing are not licensed through the city. That’s why to have an impact on the maximum number of industries and workers, the Ministry of Labour must take the lead in addressing wage theft for workers across Ontario. But as worker centres begin to emerge in cities across Ontario, city resolutions could be another tool to explore in our efforts to crack down on wage theft.
Read more about the Chicago ordinance here
Get involved in our Stop Wage Theft campaign