An estimated 250,000 Iowa workers are losing out on more than $900 million per year due to wage theft, a newly released report from Common Good Iowa finds. That statistic accounts for about one in seven workers and their families, according to a release. “This insidious and growing problem costs Iowans 10 times more than […]
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An estimated 250,000 Iowa workers are losing out on more than $900 million per year due to wage theft, a newly released report from Common Good Iowa finds.
That statistic accounts for about one in seven workers and their families, according to a release.
“This insidious and growing problem costs Iowans 10 times more than all other forms of theft combined,” said Sean Finn, author of the report entitled A Heist in Plain Sight: Wage Theft in Iowa, in a statement. "These long-ignored problems are a public policy failure. Lawmakers and state agencies have been aware of this issue for at least a decade, but have been unwilling to take action."
Wage theft is defined as an employer paying less than the full wages to which the worker is legally entitled.
It is commonly found in low-paying positions such as food service, hospitality, nursing, child care and construction, and often affects vulnerable workers (such as disabled employees, immigrants or those with language barriers). Employers also commonly mislabel employees as independent contractors, which employers use to illegally dodge contributions to unemployment insurance, workers' compensation and payroll taxes.
Based on analysis of 2017-19 Bureau of Labor Statistics data and Iowa Workforce Development and U.S. Department of Labor enforcement records, workers lost $501 million in overtime violations and $241 million in minimum wage violations.
The issue affects local governments too. Each year, wage theft causes Iowa to lose $190 million in lost tax revenue. For every $1,000 in wages stolen from Iowa workers, understaffed government agencies recover just two dollars.