This chartbook provides a comprehensive look at not only who domestic workers are and where they live, but also their economic vulnerability—their wage, income, benefit, and poverty levels relative to workers in other occupations.

We are updating this chartbook in the aftermath of the coronavirus pandemic—a crisis that has had particularly severe effects on care workers, institutions, and the industry as a whole (Wolfe et al. 2020).1 The economic struggles domestic workers continue to face, even two years after the outbreak of the pandemic, highlight the crucial role these workers play in sustaining quality of life in the United States for tens of millions of people. These workers’ contributions range from keeping our homes clean to providing child care—including care for children with complex medical needs—and delivering critical services to older adults and people with disabilities to allow them to live independently and thrive in home and community settings.

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Jump to the data tables

The ongoing pandemic and economic recovery serve as the backdrop for this chartbook, with data available through 2021. Given that we use pooled data to capture several years, the majority of the following charts and tables provide a snapshot of these occupations that includes the pre-coronavirus period, and which partially muffles the full impact of the pandemic on these jobs.

The COVID-19 crisis has laid bare the ways in which care work is undervalued—and that this workforce is underprotected. As a front-facing industry that requires high levels of personal contact, this industry was one of the hardest hit by the pandemic in 2020 (Wolfe 2020; Banerjee, Gould, and Sawo 2021). As private employers limited the number of people they came in close contact with, and care institutions—including child care centers and nursing homes—needed to socially distance or close temporarily to limit spread of the virus, many domestic workers were left without work, and without any indication of whether they would get their jobs back (NDWA 2020). Despite the impact of the pandemic on this workforce, many domestic workers were excluded from federal COVID-19 relief. At the same time, many domestic workers who were on the front lines of the pandemic, caring for the sick and keeping homes clean, lacked the protective equipment they needed.

The collapse in institutional care during the pandemic, including unpredictable closures of centers, cancellations from individual employers, and the sheer toll the virus itself took on this very at-risk workforce, worsened the economic situation of domestic workers—many of whom were already struggling with low pay and difficult working conditions pre-pandemic. While many sectors and occupations have seen strong economic recovery through 2021 and 2022, domestic work has had a rockier path, with staffing shortages and low pay being persistent problems.

The care industry is a broken economic model: while the social need for high-quality child or elder care is high, it is too expensive for most to afford, and the pay is too low for many workers to support themselves and their families (Banerjee, Gould, and Sawo 2021; Treasury 2021). In order to bring high-quality care to households who need it, while supporting and fairly compensating the vital labor of those domestic workers providing it, we need significant public investment. Public investment can ensure that domestic workers earn higher wages and that there is effective enforcement of labor standards, anti-discrimination in employment, and safe working conditions. Investing in the domestic workforce would drastically improve domestic workers’ financial security and could pave the way for more affordable child and elder care.

In addition to caring for children and helping households stay clean, domestic workers support older people and people with disabilities or illnesses by providing hands-on health care, running errands, making meals, and cleaning homes, allowing their clients to live as independently as possible in their own homes. These services are incredibly valuable to those who receive them and to the other workers who otherwise would be spending their time on this important work. Given continued gender disparities in home responsibilities for unpaid care work, working women and households with two parents working outside the home, in particular, rely on domestic workers. The need for care services touches nearly everyone’s life—whether we received care as a child, need care as we age, or seek care for children or other family members. This critical labor and service, and the workers who provide it, must be valued and compensated more highly.

Although domestic work is vital to everyday life, this chartbook shows that domestic workers face low pay, rarely receive benefits, and have less access to full-time work than other workers. Because they work in private homes, they are outside of public view and isolated from other workers, leaving them particularly vulnerable to exploitation (Dresser 2015). And many groups of domestic workers are explicitly left out of many federal labor and employment protections—a policy decision dating back to the New Deal, when the majority-Black domestic and farmworker workforces were excluded from landmark federal labor laws as a concession to racist Southern lawmakers (Burnham and Theodore 2012; Nilsen 2021).

Specifically, domestic workers are excluded from the National Labor Relations Act, enacted in 1935 to guarantee employees the right to form labor unions—or engage in other forms of collective action—to organize for better working conditions. And “live-in” workers—who reside in the employer’s home—are excluded from the overtime protections in the Fair Labor Standards Act, enacted in 1938.

The exclusions for domestic workers carried through to subsequent worker protection statutes. The Occupational Safety and Health Act does not apply to “individuals who, in their own residences, privately employ persons for the purpose of performing…what are commonly regarded as ordinary domestic household tasks, such as house cleaning, cooking, and caring for children” (OSHA 1975). Federal anti-discrimination laws, such as the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, all generally cover only employers with multiple employees, meaning many domestic workers are excluded from these protections. This exclusion is also part of the Family and Medical Leave Act.

A critical first step to providing domestic workers with the same protections as other workers is passing a National Domestic Workers Bill of Rights. This first-of-its-kind legislation would extend and strengthen core workplace protections. Ten states (California, Connecticut, Hawaii, Illinois, Massachusetts, Nevada, New Mexico, New York, Oregon, and Virginia), and the cities of Seattle and Philadelphia, have already passed such legislation, and other states and localities should follow suit.

Home care aides make up the majority of the nation's 2.2 million domestic workers: Employment in domestic worker occupations, 2021

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here are 2.2 million domestic workers in the United States and more than half are agency-based home care aides.2 Domestic workers do the vital work of cleaning homes, tending to children, and providing daily living and health assistance to people who are elderly, convalescing from illness, or have disabilities. The data from this chart are also available in Table 1, at the end of the chartbook.

It is highly likely this 2.2 million estimate is an undercount of domestic workers. Firstly, a significant proportion of domestic workers are paid “under the table,” which makes individuals who participate in surveys less likely to report these jobs. Secondly, the share of domestic workers who were born outside of the United States is higher than the share of workers overall who are not U.S.-born, and it is thought immigrants are underrepresented in national surveys.

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Women make up the vast majority of domestic workers: Share of workers who are women or men, for domestic workers, for all other workers, and by domestic worker occupation, 2021

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ore than 9 in 10 domestic workers (90.2%) are women—a gender imbalance that is even more pronounced for house cleaners (94.4% women) and child care providers (roughly 97% women). By comparison, women make up just less than half (46.3%) of the rest of the workforce. While men are somewhat more likely to be home care aides than house cleaners or child care providers, they still account for less than 15% of nonagency and agency-based home care aides.

See Table 2 at the end of the chartbook for a demographic breakdown of domestic workers by gender, nativity, race/ethnicity, education, and age.

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Black and Hispanic workers make up a disproportionate share of domestic workers: Share of workers who are of a given race or ethnicity, for domestic workers, for all other workers, and by domestic worker occupation, 2021

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ell more than half (56.6%) of domestic workers are Black, Hispanic, or Asian American and Pacific Islander (AAPI). In contrast, Black, Hispanic, and AAPI workers make up 36.7% of the rest of the workforce. House cleaners constitute the domestic worker occupation with the highest share of Hispanic workers (62.7%), while agency-based home care aides constitute the domestic worker occupation with the highest share of Black, non-Hispanic workers (29.9%).

See Table 2 for a demographic breakdown of domestic workers by gender, nativity, race/ethnicity, education, and age. 

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Black and Hispanic women make up a disproportionate share of domestic workers: The share of domestic workers who are Black, Hispanic, or AAPI women, 2021

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hile women of all races and ethnicities are overrepresented in the domestic employee workforce, this overrepresentation is particularly pronounced for Hispanic and Black women. A majority (51.3%) of domestic workers are Black, Hispanic, or AAPI women—more than a quarter (26.6%) are Hispanic women and nearly 1 in 5 (19.3%) are Black women. Most house cleaners are Hispanic women (59.4%) and more than a quarter (26.6%) of agency-based home care aides are Black women.

See Table 3 for a detailed demographic breakdown showing the race/ethnicity and nativity of domestic workers by gender.

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Domestic workers are more likely than other workers to have been born outside the United States: Share of workers with given nativity status, for domestic workers, for all other workers, and by domestic worker occupation, 2021

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ore than a third (34.8%) of domestic workers were born outside of the United States, compared with just 16.9% of the rest of the workforce. Just less than 1 in 5 is a foreign-born noncitizen (18.5%), while about 1 in 6 is a U.S. citizen who was born in a different country (16.3%). While noncitizens are overrepresented in all domestic worker occupations, they are particularly overrepresented in the house cleaner workforce, making up half (49.9%) of house cleaners.

See Table 2 for a demographic breakdown of domestic workers by gender, nativity, race/ethnicity, education, and age. Table 3 provides even more detail, showing the race/ethnicity and nativity of domestic workers by gender.

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Domestic workers tend to be older than other workers: Share of workers by age group, for domestic workers, for all other workers, and by domestic worker occupation, 2021

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wo in five domestic workers are age 50 or older (40.2%), while just one-third of all other workers are at least 50 years old (33.7%). Home care aides who aren’t agency-based are the domestic worker occupation with the highest median age (52). The exception to the tendency of domestic workers to skew older is the occupation of nannies, whose median age is 25. More than one-third of nannies are younger than 23 years old (37.8%), compared with 8.1% of nondomestic workers who are younger than age 23.

These data suggest that domestic work is often an important source of income for older workers. The reliance of some older workers on income from domestic occupations is particularly relevant during the coronavirus pandemic—older workers have a greater risk of severe illness from the virus—and underscores the need to provide domestic workers with access to paid sick leave and adequate protective equipment.

See Table 2 for more detailed age categories and the median ages of domestic workers.

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How many domestic workers are employed in your state?: Number of domestic workers working in each state, by occupation and compared with all workers, 2021

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his map is color-coded to show which states have the most domestic workers. You can click on a state to display how many domestic workers total are employed there, and how many are employed in each domestic worker occupation, and compare these with the number of workers in all other occupations. You can access the map data from Table 4, which also shows employment counts by region. Employment counts for selected metropolitan areas are available in Table 5.

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There is a wide and persistent gap between domestic workers’ wages and wages of all other workers: Median real hourly wages of domestic workers, by occupation, versus other workers, 2010–2021

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here is a large “domestic worker wage gap”—a wide gulf between the median hourly wage of domestic workers and the median hourly wage of all other workers. The wage gap for domestic workers is not only large, but it is also persistent. Like other typical workers, domestic workers have seen stagnant wages for decades (since well before 2010, which is the starting point in this chart because it is the first year for which data are available for the domestic worker occupations defined in our analyses). For an in-depth look at the sluggish wage growth of the last 40 years, see EPI’s 2019 report State of Working America Wages (Gould 2020).

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The pay gap for domestic workers is widest for house cleaners: Median real hourly wages, domestic workers (all and by occupation) versus other workers, 2021

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he typical domestic worker is paid $13.79 per hour, including overtime, tips, and commissions—36.6% less than the typical nondomestic worker, who is paid $21.76. This wide gap between domestic workers’ wages and the wages of all other workers is consistent across domestic worker occupations.

Table 6 shows the median real hourly wages of domestic workers, all other workers, and domestic workers by occupation broken out by gender, nativity, race/ethnicity, education, and age. 

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Domestic workers who are male, U.S.-born, AAPI, college-educated, or ages 50 and older have the biggest wage gaps relative to their peers in other professions: Median real hourly wages, domestic workers versus other workers, 2021

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Within every demographic category that we analyze, domestic workers are typically paid less than their peers. Male domestic workers face a larger wage gap relative to other men (a $9.10 gap, or a 37.9% decrease) than do female domestic workers (a $6.58 gap, or 32.8% decrease; not shown). Asian American and Pacific Islander domestic workers, older domestic workers, and domestic workers with at least a bachelor’s degree also face particularly large within-group wage gaps.

Table 6 shows the median hourly wages of all domestic workers versus all other workers, and by domestic worker occupation, broken out by gender, nativity, race/ethnicity, education, and age.

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Even when controlling for demographics and education, domestic workers are paid less than similar workers: Average domestic worker hourly wages as a share of wages paid to demographically similar workers in other professions, 2021

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Even when we control for demographics and educational background using regression analysis that holds these other influences constant, domestic workers face a big pay gap: The average domestic worker is paid 75 cents for every dollar that a similar worker would make in another occupation—or 25% less. Home care aides who are not agency-based face the largest wage gap: Their wages are two-thirds the wages of demographically similar workers—a third less. Although the regression-adjusted wage gap is smaller for nannies and house cleaners, they are still paid only about 80 cents for every dollar that a similar worker would make in another occupation.

Table 7 shows regression-adjusted hourly wage gaps for all domestic workers and for each domestic worker occupation, broken out by gender, nativity, race/ethnicity, education, and age.

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Domestic workers are more likely to work part time and more than twice as likely to work part time because they can't get full-time hours: Share of workers who work full and part time, for domestic workers, for all other workers, and by domestic worker occupation, 2021

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In addition to having lower hourly wages, domestic workers tend to work fewer hours than other workers. Nearly half of domestic workers work part time, compared with less than a quarter of all other workers. Much of this difference is at least somewhat “voluntary,” with domestic workers being more likely than other workers to have a part-time job because they want a part-time schedule (or need a part-time schedule to handle child care or other responsibilities). But domestic workers are also more than twice as likely as other workers to want a full-time job but to have to settle for a part-time job because they can’t get full-time hours. The greater likelihood of wanting but being unable to get full-time work is particularly acute for house cleaners, 17.6% of whom work part time but would like a full-time job. The greater incidence of part-time work among domestic workers is reflected in their average weekly hours on the job (not shown). While workers in other occupations put in just less than 40 hours a week on average, domestic workers spend an average of 33.6 hours on the job each week.

Table 8 displays the data from this chart, as well as the average weekly hours of domestic workers.

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Domestic workers are paid less in a year than other workers: Median annual earnings, domestic workers versus other workers, 2018

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The combination of lower average hours and much lower median wages (shown in Table 8 and Figure 8) results in substantially lower annual earnings for domestic workers relative to other workers. The typical domestic worker’s annual earnings are just two-fifths of a typical worker’s in another occupation. While typical agency-based home care aides have higher annual earnings than domestic workers in other occupations, they still are paid just half of what workers outside the domestic workforce are paid in a year.

Table 9 shows the median annual earnings of all domestic workers, domestic worker occupations, and all other workers, broken out by gender, nativity, race/ethnicity, education, and age.

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Even when controlling for demographics and education, domestic workers are paid less in a year than similar workers: Average domestic worker annual earnings as a share of earnings paid to demographically similar workers in other professions, 2018

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Even when we control for demographics and educational background using a regression, domestic workers face a big gap in annual pay as a result of lower hourly wages and fewer hours: The average domestic worker is paid less than half of what a similar worker would make in another profession on an annual basis. Nannies face the largest gap: Their annual earnings are less than one-third the earnings of a demographically similar worker. Although the regression-adjusted earnings gap is smaller for agency-based home care aides, they are still paid 42.8% less annually than a similar worker would be paid in another occupation.

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Domestic workers are three times as likely to be in poverty and almost three times as likely to lack enough income to make ends meet: Poverty rates and twice-poverty rates of domestic workers versus other workers, 2018

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Domestic workers are much more likely than other workers to be living in poverty, regardless of occupation. They are also much more likely to have incomes that fall below the twice-poverty threshold, which is considered by many researchers a better cutoff for whether a family has enough income to make ends meet. The majority of house cleaners are struggling to make ends meet (their “twice-poverty” rate is 54.8%) and more than a quarter (25.4%) have incomes that put them below the official poverty threshold. Workers who provide child care in their own homes have somewhat lower poverty rates than other domestic workers, although a third of them (32.4%) still do not have enough income to make ends meet—about twice the share of the nondomestic workforce living below the twice-poverty line. Domestic workers who are not U.S. citizens and those without a high school diploma face particularly high poverty rates, as do Black and Hispanic domestic workers. (These data are shown at the end of the chartbook in Table 10 and Table 11, which provide poverty and twice-poverty rates for domestic workers and all other workers broken out by gender, nativity, race/ethnicity, education, and age.)

Poverty researchers generally do not consider the poverty rate to be a good measure of the share of families who cannot make ends meet in part because the poverty thresholds were set in the 1960s and have not evolved to reflect changing shares of spending on various necessities by low-income families. That is why “twice-poverty” is often used as a cutoff for whether a family is able to make ends meet.

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Even when controlling for demographics and education, domestic workers are more likely to live below the poverty line than similar workers: Percentage-point difference between the poverty rate of domestic workers and that of demographically similar workers in other occupations, 2018

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Even when we compare domestic workers exclusively with workers in other professions who are demographically similar, domestic workers are still much more likely to be living in poverty. House cleaners on average have a poverty rate that is 14.0 percentage points higher than the poverty rate of similar workers. Along with agency-based home care aides, house cleaners also have twice-poverty rates that are nearly 20 percentage points higher than you would expect these rates to be if these workers were employed in nondomestic occupations.

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Domestic workers are less likely to have health or retirement benefits: Employer-provided health insurance and retirement coverage rates, domestic workers versus other workers, 2018

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Just less than 1 in 5 domestic workers has employer-provided health insurance, a shockingly low coverage rate compared with the near-majority of other workers who receive health insurance through their job. Coverage rates are less than 10% for house cleaners and workers who provide child care in their own home. Even agency-based home care aides, the domestic worker occupation with the highest employer-provided health insurance coverage rate, are barely half as likely to be covered as nondomestic workers.

The coverage rates for employer-provided retirement plans are even more dismal—fewer than 1 in 10 domestic workers are covered. By comparison, about a third of other workers benefit from their employer contributing to their retirement savings.

See Table 12 and Table 13 for variations in employer-provided health insurance and retirement coverage rates for domestic and all other workers by gender, nativity, race/ethnicity, education, and age.

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Even when controlling for demographics and education, domestic workers are less likely to have benefits than similar workers: Percentage-point gap between the coverage rates of domestic workers and those of demographically similar workers in other occupations, 2018

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he glaring gaps in health insurance and retirement coverage rates are evident even when we compare domestic workers with demographically similar workers. The share of domestic workers with employer-provided health insurance is 21.4 percentage points lower than the share of all other workers with such coverage. Additionally, the share of domestic workers with employer-provided retirement plans is 17.1 percentage points lower than the share of all other workers with such coverage. Agency-based home care aides are more likely than other domestic workers to have employer-provided benefits, but the gap between these workers and nondomestic workers remains enormous even after controlling for demographic characteristics.

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Employment in domestic worker occupations is growing faster than the rest of the workforce: Projected employment change, domestic workers versus other workers, 2020–2030

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mployment in domestic worker occupations is projected to grow more than three times as fast as employment in other occupations over a decade—25.3% compared with 7.2%. This trend is driven by the expected large increase (37.9%) in agency-based home care aides, who make up about half of the domestic employee workforce. Given the increased social need for workers in this industry, it is all the more important that significant public investment help bolster higher wages and enforcement of labor standards, as so far, the market has failed to do so on its own. High consumer costs paired with the potential for positive spillover effects from domestic work makes this industry ideal for government support and investment.

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Table 1

Table 2

Table 3

Table 4

Table 5

Table 6

Table 7

Table 8

Table 9

Table 10

Table 11

Table 12

Table 13

Technical notes about data and definitions

The figures and tables in this chartbook use data from the Current Population Survey (CPS), a monthly survey of households in the United States sponsored jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics (BLS). Our CPS Basic and Outgoing Rotation Group (ORG) microdata are pulled from the Economic Policy Institute Current Population Survey Extracts, Version 1.0.32 (2022), https://microdata.epi.org.

In our analyses of hourly wages, we use data from the CPS’s Outgoing Rotation Group, a CPS subgroup of employed adults asked to answer a detailed set of questions about their earnings from work. Our analyses of annual earnings, benefits, and poverty rates come from the CPS’s Annual Social and Economic Supplement (ASEC). To ensure adequate sample sizes for these detailed analyses, we pool several years of CPS, CPS-ORG, or CPS-ASEC microdata. Most data sets are drawn from pooled 2019–2021 microdata. Given limitations in the 2020 ASEC, we use the 2018 data for those graphs on earnings, poverty rates, and benefit levels. Data sets that are broken down by geography are drawn from pooled 2010–2021 microdata. Even after pooling years together, we still do not have adequate sample sizes to report statistics for some demographic groups, as indicated in the tables by “NA.”

The CPS asks respondents about both race and ethnicity, so respondents may be categorized as having Hispanic ethnicity and being of any race. To avoid including observations in multiple categories, we create five mutually exclusive categories for race/ethnicity: white (non-Hispanic), Black (non-Hispanic), Hispanic (any race), Asian American and Pacific Islander (non-Hispanic; sometimes referred to as “AAPI” in this report), and “other.” Likewise, gender is restricted to the two predominant binary categories: women and men. Note that for clarity, when discussing our findings, we adhere to the category name of “Hispanic,” which is used in official government sources, rather than Latino, Latina, or Latinx.

In our charts, “foreign-born” refers to anyone who is not a U.S. citizen at birth. “Foreign-born noncitizen” includes foreign-born persons who are either lawful permanent residents, in a nonimmigrant status (migrants with temporary visas), or lacking an immigration status, including both unauthorized immigrants and those with lawful presence (such as Deferred Action for Childhood Arrivals recipients and asylum applicants whose cases are in process).

The data include all public- and private-sector workers ages 16 and older. Due to rounding, in a few cases sums that can be calculated by using the data in tables or figures vary slightly from sums cited in the text.

Conclusion

While many characteristics of the domestic workforce showed little change compared with pre-pandemic conditions, there are some notable differences between the pre-pandemic domestic workforce and the still-recovering current workforce. Namely, there was a decline in the number of domestic workers in the United States between 2019 and 2021. In 2019, there were 2,245,047 domestic workers employed and in 2021, there were 2,158,969. This represents about a 4% decrease compared with the pre-pandemic employment count. This aligns with reports of a severe shortage in child care and other care industries. The decrease also could reflect several “push-pull” factors: as institutional center-based child and elder care shut down, home-based care may have filled some of that gap, but also likely still fell due to labor supply considerations and other economic factors. This is likely due in part to the decimation and unpredictable closing and reopening of care institutions in 2020 and 2021, and the persistent low pay and burnout. Even after the pandemic, domestic workers continued to face persistent wage gaps compared with similarly credentialed workers.

At the same time, domestic work occupations are projected to grow at a faster pace than the rest of the workforce. The pandemic demonstrated just how crucial domestic workers are to supporting families and households across the country. We need serious investment and funding for the domestic workforce to ensure that new domestic work jobs are good jobs paying family-sustaining wages, and providing dignified protections and working conditions to workers, while allowing families to access quality, affordable care. The federal passage of a domestic workers’ bill of rights, or even the wider adoption of such a bill of rights by more states, would be a step toward acknowledging the value of this necessary facet of our economy, and toward improving working conditions for women older workers, and workers of color. Domestic work is vital labor, and it is long past time it is valued and compensated as such.

Acknowledgments

The authors would like to thank EPI Editor Krista Faries for improving the original chartbook through her careful editing and preparing of figures and tables for publication. And we are indebted to EPI’s Online and Creative Director, Eric Shansby, who created the awesome system that makes it possible to design and publish these interactive chartbooks.

Notes

1. See Wolfe et al. (2020) for the previous version of the Domestic Workers Chartbook, which used data from 2010–2019.

2. This figure comes from the Current Population Survey (CPS)—a monthly survey of the nation’s households that asks detailed questions about work.

References

Banerjee, Asha, Elise Gould, and Marokey Sawo. 2021. Setting Higher Wages for Child Care and Home Health Care Workers Is Long Overdue. Economic Policy Institute, November 2021.

Burnham, Linda, and Nik Theodore. 2012. Home Economics: The Invisible and Unregulated World of Domestic Work. National Domestic Workers Alliance, 2012.

Dresser, Laura. 2015. Valuing Care by Valuing Care Workers: The Big Cost of a Worthy Standard and Some Steps Toward It. Roosevelt Institute, October 2015.

Gould, Elise. 2020. State of Working America Wages 2019: A Story of Slow, Uneven, and Unequal Wage Growth over the Last 40 Years. Economic Policy Institute, February 2020.

National Domestic Workers Alliance (NDWA). 2020. 6 Months in Crisis: The Impact of COVID-19 on Domestic Workers. October 2020.

Nilsen, Ella. 2021. “These Workers Were Left Out of The New Deal. They’ve Been Fighting for Better Pay Ever Since.” Vox, May 18, 2021.

Occupational Safety and Health Administration (OSHA). 1975. “Policy as to Domestic Household Employment Activities in Private Residences.” Standard Number 1975.6.

U.S. Department of the Treasury (Treasury). 2021. The Economics of Child Care Supply in the United States. September 2021.

U.S. General Accounting Office (GAO). 1998. Immigration Statistics: Information Gaps, Quality Issues Limit Utility of Federal Data to Policymakers. July 1998.

Wolfe, Julia. 2020. “Domestic Workers Are at Risk During the Coronavirus Crisis: Data Show Most Domestic Workers are Black, Hispanic, or Asian Women.” Working Economics Blog (Economic Policy Institute), April 8, 2020.

Wolfe, Julia, Jori Kandra, Lora Engdahl, and Heidi Shierholz. 2020. Domestic Workers Chartbook: A Comprehensive Look at the Demographics, Wages, Benefits, and Poverty Rates of the Professionals Who Care for Our Family Members and Clean Our Homes. Economic Policy Institute, May 2020.

• establishing dedicated local labor standards offices that enforce workers’ rights laws 
• establishing ongoing worker boards or councils 
• passing local worker protection laws
• actively enforcing local worker protection laws 
• setting job quality standards for contractors with the municipal government 
• establishing legal consequences for labor violations among applicants for municipal permits or licenses 
• practicing high-road employment principles in relation to municipal employees
• championing worker issues through public leadership 

While other reports have done an excellent job of exploring local action on specific issues like paid sick leave, living wages, and creation of worker boards, this report identifies and examines the broader trend of increased local action and analyzes the landscape of cities and other localities’ pro-worker actions in a comprehensive way.

Why it matters: Policies and enforcement that protect the rights of workers, ensure workers are able to meet their basic needs, and support workers’ efforts to organize are foundational to building healthy, thriving, and equitable communities. Working people in the United States today face multiple crisis situations that not only adversely impact their well-being, but also undermine the health and well-being of communities. Outdated labor laws are skewed against workers trying to form and join unions, and workers who try often face retaliation and other violations by employers. Public enforcement resources are inadequate, and workers are increasingly unable to bring their claims in court because of forced arbitration. In this context, cities and localities are vitally important and necessary actors in the effort to expand and enforce workers’ rights. They are close to their residents, and often are nimble and fast-moving in responding to emerging needs. A few cities (along with a few states) are also at the vanguard of innovating on policy and piloting new approaches to expanding and protecting workers’ rights. There is very meaningful work currently happening at the local level, with untapped potential for much more local action. 

What can be done about it: Local policymakers, enforcers, advocates, and community members can work together to pilot new local laws, create dedicated labor enforcement agencies and worker boards, develop strategic community enforcement partnerships, and use permits to drive compliance. Localities can fight abusive state preemption that impairs the abilities of local governments to build upon minimum standards set at the state level. Unions, worker advocates, and the public can think creatively about how to enact measures within their own localities and press for action. Other actors and observers in this space—federal and state government, the media, funders, academics, and more—should develop a greater understanding of the emerging role of cities in protecting working people. They should work to institutionalize and chronicle protecting and supporting workers as part of our understanding of what localities do. This report offers a road map of opportunities to enact policies at the local level that advance workers’ rights and improve working conditions.

Executive summary

In recent years, cities, counties, and other localities have become innovators and leaders in standing up for working people. Responding to increased inequality, degraded working conditions, and insufficient or inconsistent worker protections at the state and federal level, localities have in many cases joined states as the “laboratories” of experimentation (as Supreme Court Justice Louis D. Brandeis described) in relation to workplace matters.1 A number of localities have come to view protecting workers and improving their conditions as part of their core municipal function.

This report provides an overview of some of the most noteworthy ways in which localities have taken action on behalf of working people in recent years:

• Some localities have established dedicated local labor standards offices that enforce workers’ rights laws; educate employers, workers, and the public about these laws; and in some cases help formulate or inform municipal policy in this area.
• Localities have established ongoing worker boards or councils to provide workers with a formal role in local government and/or access to local officials and agencies.
• Other localities have focused on passing local worker protection laws, including ordinances regarding minimum wages, paid sick leave, and fair scheduling; industry-specific protections for sectors with high violation rates or specific vulnerability (such as the domestic worker, gig, hotel, retail, fast-food and freelance industries); broader anti-discrimination protections; and specific laws responsive to the COVID-19 pandemic.
• Localities are actively enforcing local worker protection laws, including with funded community partnership models in some instances.
• Some localities have established job quality standards for contractors, while others have established legal consequences (including denial and revocation) for applicants for initial or renewed municipal permits or licenses who have a history of wage theft violations or unresolved labor standards orders.
• Localities are demonstrating how to be a high-road employer of municipal employees, including by incorporating labor standards like higher minimum wages and paid sick leave, and enabling or facilitating collective bargaining among workers in local government.
• Active localities and local elected and appointed government leaders are exerting leadership in the public sphere, through education and outreach about labor laws, issuance of reports, convenings and public hearings, and use of the bully pulpit.

Federal—and in some cases state—preemption creates some limitations on what localities can do to expand and protect workers’ rights. Preemption occurs when federal or state law prevents subordinate levels of government (in this case, municipalities) from legislating or acting on a given issue. Still, local governments have considerable opportunity to take meaningful action on behalf of the working people within their jurisdictions.

The time is ripe for local action to advance workers’ rights. Working people are expressing dissatisfaction with worsening working conditions by resigning, forming and joining unions, and demanding change. 

Overview and introduction

Policies and enforcement that protect the rights of workers, ensure that workers are able to meet their basic needs, and support workers’ efforts to organize are foundational to building healthy, thriving, and equitable communities (Bhatia et al. 2013; USC ERI 2020). Working people in the United States today face multiple crisis situations that not only adversely impact their well-being, but also undermine the health and well-being of communities. The COVID-19 pandemic has led to many workplace clusters. Federal and state workplace measures have been varied, yet insufficient, to provide adequate protection from the virus.

Even before the pandemic, working people had been experiencing a multitude of serious challenges. Two widespread challenges are wage theft—the practice of employers failing to pay workers the full wages to which they are legally entitled—and misclassification of workers as independent contractors—the practice of employers labeling workers as independent contractors, rather than employees, to avoid paying unemployment and other taxes on workers and covering them with workers’ compensation insurance. Outdated labor laws are skewed against workers trying to form and join unions, and workers who try often face retaliation and other violations by employers (McNicholas 2019). Public enforcement resources are inadequate, and workers are increasingly unable to bring their claims in court because of forced arbitration (Hamaji et al. 2019). Employers who fail to pay unemployment or other taxes deprive public coffers of resources needed for programs serving important human needs (Erlich 2019). Meanwhile, the labor market itself is skewed—workers’ wages have not kept up with their productivity (Mishel 2021), and corporate concentration along with anti-competitive practices add to workers’ challenges in getting a fair wage (Stansbury 2021). These challenges have fallen hardest on workers of color and workers in low-wage industries.

Federal and state leaders who wish to take action on these thorny and deep-seated issues often face significant obstacles when they seek to pass laws, promulgate regulations, or take other steps responsive to workers’ needs. Such challenges can be even greater in relation to emerging developments in the workplace.

Supreme Court Justice Louis Brandeis famously described states as laboratories of public policy experimentation.2 In relation to workers’ rights, U.S. localities3 have been true laboratories of experimentation in recent years (Diller 2014).4 Historically, the federal government and states have been responsible for workplace regulation; over the years, cities and localities have not generally taken a leading role.5 But in roughly the past decade, cities and localities have become increasingly important actors in expanding and enforcing workers’ rights—what some commentators have called the “municipalization” of labor law (Sarchet 2021).

Cities and localities have introduced cutting-edge laws that do not exist at the federal or state level (including some responsive to newly emerging problems); established new offices devoted to protecting workers; used their contracting, licensing, and permitting powers to drive employer compliance; and implemented new methods of enforcement, including close and even funded partnerships with worker and community organizations. Such action by localities has occurred not only in traditionally worker-friendly regions, but also in progressive cities located within more conservative states. (Efforts in such locales have often, but not always, been met with state-level preemption measures, as noted by Blair et al. 2020 and Wolfe et al. 2021). And in some cases, such as the expansion of paid sick days, policy leadership at the local level has provided proof of concept and helped build momentum for states (and earlier in the pandemic, even the federal government) to take action. Local government action on workers’ rights also often reflects efforts to address local conditions when it comes to cost of living, dominant and emerging industries, and the needs and organizing of specific communities (especially communities of color and immigrant communities).

This report provides both an outline and a road map: an outline of actions that cities and localities have taken in recent years to protect workers, and a road map of possible policy and enforcement options for local leaders, both elected and appointed, to consider.6 Such actions include:

• establishing a dedicated department, office, or subagency within city government focused on worker issues
• creating boards or councils that provide workers with a voice, a role, and/or access to local government
• passing laws that create new and essential rights for workers
• enforcing worker protection laws, including through strategic, innovative, and/or collaborative approaches
• leveraging contracting, licensing, and/or permitting powers to raise and address worker issues
• incorporating high-road employment practices and labor policies in relation to their own municipal workforces
• using soft powers, including community education and outreach, issuance of reports, and other “bully pulpit” vehicles for reaching the community and highlighting worker needs and available resources

Notably, some cities and localities have taken meaningful action to protect workers and advance their rights and well-being during the COVID-19 pandemic; more should follow suit. This report also outlines a number of measures taken at the local level in response to COVID-19.

This report is intended not only for local leaders, but also for labor unions and worker advocates, to help deepen their understanding of policy and enforcement levers at the local government level in order to guide advocacy and collaborative governance efforts. This report can also inspire academics and other researchers to study local efforts to advance workers’ rights. Finally, policymakers at all levels of government should pay attention to the innovative solutions advanced by localities. ​​

At least 20 localities have created or are creating dedicated local labor agencies

A number of localities have created agencies specifically dedicated to enforcing workers’ rights under local ordinances, including laws addressing minimum wages,7 wage theft, paid sick and safe leave, fair scheduling/fair workweek requirements requiring advance notice of scheduling, fair chance hiring laws, gig worker rights, and more. Several of these agencies are also charged with analyzing and potentially proposing local labor policies. In other instances, localities do not have a dedicated stand-alone office, but units of other municipal agencies focus specifically on workers’ rights matters. And some localities without dedicated units have tasked specific government entities with enforcing wage theft or paid sick leave laws, such as a city manager, treasurer, or attorney; office of human rights; unit of the mayor’s office; or other officials (A Better Balance n.d.b.; Boulder 2022; Pinellas OHR n.d.; Miami-Dade WTP n.d.).8

Creation of a dedicated unit within local government focused on workers’ rights can be transformative. It ensures that municipal public servants will be involved in worker protection in a continuous, proactive, ongoing, and in-depth manner. It allows specialized staff to develop expertise on the relevant municipal laws and policies, as well as deep knowledge of issues affecting local workers. Where there is a dedicated worker-focused office in local government, staffers can develop ongoing relationships with relevant stakeholders like worker advocacy groups, unions, immigrant rights advocates or service providers, employment lawyers, and employer associations, as well as other relevant government enforcement agencies at the local, state, and federal levels. A dedicated office also can be mobilized to address emerging needs, including those that arose in the COVID-19 pandemic. Most importantly, establishment of a dedicated office institutionalizes and embeds the work within local government, ensuring the focus on workers and their challenges will continue beyond a particular administration.

Jurisdictions with dedicated agencies, subdivisions, or staff include Berkeley (California), Boston, Chicago, Denver, Duluth (Minnesota), Emeryville (California), Flagstaff (Arizona), Los Angeles City, Los Angeles County, Minneapolis, New York City, Philadelphia, San Francisco, San Jose, Santa Clara County (California), Seattle, St. Paul (Minnesota), and Tacoma (Washington).9 In addition, the San Diego County Board of Supervisors voted in 2021 to create a county labor office, and the San Diego City Council followed suit in 2022 by voting to create a labor enforcement office in a new Compliance Department.10 Tucson, Arizona, voters in 2021 passed a ballot initiative to create a local minimum wage and also a city Department of Labor Standards.11 Numerous Florida localities have created wage theft enforcement or mediation programs of various kinds: Broward County (complaint form), Miami-Dade County, and Pinellas County.12 Via court order, Palm Beach County created a Wage Dispute Division within the county civil court.13

More dedicated units to enforce workers’ rights are likely on the horizon. For example, a legislative proposal resulting from the work of an Earned Sick and Safe Leave Task Force is currently under consideration in Bloomington, Minnesota (population of approximately 90,000), home of the Mall of America.14 The city manager there has stated that two full-time equivalent staffers (one attorney and one paralegal) would be needed for this work.15

Snapshots of several local agencies in cities of varying size:

Berkeley, California (Pop. 124,321): The Workplace Enforcement and Standards Unit was created in 2014. It currently has a single full-time equivalent (FTE) employee, who also holds nonlabor-related responsibilities in addition to enforcing the city’s minimum wage, living wage, paid sick leave, and other laws (U.S. Census Bureau 2022a).

Chicago (Pop. 2.7 million): Chicago’s Office of Labor Standards, housed in the Department of Business Affairs and Consumer Protection, began operating in 2019 (its official launch date was in 2020). As of June 2022, the office has eight FTEs. It enforces the city’s minimum wage, wage theft, paid sick leave, fair workweek, COVID and vaccine anti-retaliation laws, as well as a law effective in January 2022 requiring employers of domestic workers to provide them with written contracts (U.S. Census Bureau 2022b).

Denver (Pop. 715,522): Denver Labor, created in 2019, is a division enforcing wage and hour laws located in the Denver auditor’s office. The office has 25 FTEs, and it enforces the city’s minimum wage laws, as well as a number of laws related to government work: a minimum wage applicable to city contractors, the city’s prevailing wage, the city’s living wage, and more. The office also has a community education emphasis: there are full-time community education staff and an annual outreach/education plan, including radio and internet ads, weekly online training, hundreds of outreach events, and multilingual written materials (U.S. Census Bureau 2022c).

Duluth, Minnesota (Pop. 86,697): Enforcement of Duluth’s earned sick and safe time law (effective in 2020) is handled through the equivalent of one employee housed in the city clerk’s office (U.S. Census Bureau 2022d).

Los Angeles City (Pop. 3.9 million): The Office of Wage Standards in the city of Los Angeles was created in 2015. It is authorized to have 30 FTEs, although in February 2022, this figure included nine vacancies. It enforces the city’s minimum wage, paid sick leave, and fair chance hiring laws (U.S. Census Bureau 2022f). (The county of Los Angeles has a separate enforcement agency that enforces the county’s own workplace laws.)

Minneapolis (Pop. 429,954): The Labor Standards Enforcement Division was created within the city’s Department of Civil Rights in 2016. The office has five FTEs, and it enforces the city’s paid sick and safe time, minimum wage, wage theft, and freelance worker protections laws, as well as a law giving hospitality workers the right of recall, which will sunset one year after the COVID-19 public health emergency (U.S. Census Bureau 2022g).

New York City (Pop. 8.8 million): New York City’s Office of Labor Standards and Policy was created in 2016, and is housed in the Department of Consumer and Worker Protection (DCWP). (That agency was long known as the Department of Consumer Affairs; its name changed in 2019 (Greenbaum 2019) in part to convey the agency’s focus on workers as well as consumers.) In 2021, the office had 33 FTEs. While it lacks jurisdiction to set a city minimum wage, the office enforces the city’s Paid Safe and Sick Leave Law, Freelance Isn’t Free Act, and the Fair Workweek Law in retail and fast-food, as well as several new cutting-edge laws, including a “just cause” termination law giving fast-food employees protections against arbitrary termination, and a law giving food delivery workers greater control over their working conditions and authorizing DCWP to set a minimum pay rate (U.S. Census Bureau 2022h).

Philadelphia (Pop. 1.6 million): In the June 2020 primary election, voters of Philadelphia overwhelmingly approved a ballot question to amend the city charter to create a city department of labor, demonstrating widespread public support for municipal involvement in workers’ rights issues (U.S. Census Bureau 2022i; Ballotpedia n.d.). The head of the Philadelphia Department of Labor is the deputy mayor for labor, holding a high-profile position within city government. The Office of Worker Protections, located within the department, has a total of nine FTEs, and enforces wage theft, paid sick leave, and fair workweek laws; laws covering specific industries (domestic worker bill of rights, wrongful discharge of parking employment, recall and/or retention of hotel, travel and hospitality workers); and more. The office established a domestic worker task force and has been tasked with creating a portable benefits system for domestic workers (Orso 2020), likely to be the nation’s first. In addition, in 2020 and 2021, the office partnered with worker organizations on a citywide effort on the Philadelphia Worker Relief Fund (MF Phila. n.d.; Cox 2020), which distributed more than $2.2 million to 2,820 families left out of COVID-19 government relief (Philadelphia 2020a). The office also collaborated on a referral system with the city health department’s COVID-19 containment unit to mediate paid sick leave when workers reported exposure.

San Francisco (Pop. 873,965): San Francisco’s Office of Labor Standards Enforcement (OLSE) was created nearly 20 years ago (San Francisco n.d.a; SF OLSE n.d.e). The office has 30 FTEs, and currently enforces more than 30 citywide laws, including ordinances on minimum wage, paid sick leave, fair chance employment, scheduling laws, and others, as well as a handful of other laws related to government contracting (SF OLSE n.d.f; U.S. Census Bureau 2022j).

San Jose (Pop. 983,489): San Jose’s Office of Equality Assurance, with a staff of eleven, implements, monitors, and administers the city’s wage policies, including the living wage law applicable to city service contracts, the prevailing wage law which covers public works (construction) projects, and the minimum wage ordinance applicable to employers for work performed within the city. The Office also contracts with a number of neighboring localities to provide minimum wage enforcement services for their own local minimum wages. For example, in 2020, the City of San Jose entered into contracts with the nearby cities of Burlingame, Cupertino, Milpitas, Redwood City, San Carlos, San Mateo, Santa Clara, South San Francisco, and Sunnyvale; maximum compensation under the contracts is $40,000 to $45,000 to cover a period of two and a half to three years. This arrangement allows smaller localities to functionally pool resources in order to have their local laws enforced (San Jose 2020; San Jose n.d.; U.S. Census Bureau 2022k).

Santa Clara County, California (Pop. 1.9 million): The County’s Office of Labor Standards Enforcement was created in 2017. The office has capacity for five FTEs; four were filled as of May 2022. Among other things, the office ensures that recipients of county permits, licenses, and contracts comply with labor laws and satisfy outstanding judgments issued by the California Labor Commissioner’s Office. The office also enforces wage theft prevention and living wage requirements related to contracting, contained in Chapter 5 of the Santa Clara Board of Supervisors Policy Manual (Section 5.5.5.4) (SC BOS 2020). In 2021, the office also enforced a hazard pay ordinance related to COVID-19 (SC OLSE n.d.c; U.S. Census Bureau 2022l).

A deeper dive into Seattle’s local labor agency

Seattle’s Office of Labor Standards has grown rapidly since its creation in 2015 as a division within the Seattle Office of Civil Rights. The Office of Labor Standards became an independent, standalone city agency in 2017, and the breadth and impact of its activities provide a useful example of the potential of municipal labor agencies.

Staffing: As of February 2022, the office had 34 FTEs and one full-time temporary position. These position include a director, deputy director, communications manager, seven outreach positions, four policy-focused positions, three operations and finance positions, and eighteen enforcement officials.

Ordinances: The office enforces 18 city laws. These include laws of broad application (paid sick and safe time, fair chance employment, wage theft, and commuter benefits ordinances); laws targeting specific industries (secure scheduling ordinance for retail and food services workers, as well as ordinances protecting domestic workers, transportation network company drivers, and hotel workers); and laws enacted during the COVID-19 pandemic (paid sick and safe time for gig workers, as well as premium/hazard pay for gig workers/grocery employees) (Seattle OLS 2012, 2013, 2015a, 2015b, 2017, 2020b, 2020d, 2020e, 2020h, 2021a). Finally, on September 1, 2022, the Independent Contractor Protections Ordinance (Seattle OLS 2021b) will take effect; it will require commercial hiring entities to provide certain precontract disclosures and payment disclosures, and also requires timely payment of contracts. See Section 6 for more in-depth discussion.

Enforcement: The office has brought a number of successful enforcement actions, including in fast-food, gig economy, construction, retail, grocery, and other industries. These cases are described in Section 7.

Policymaking: The office has helped develop city labor policy in various ways. The office ran a broad policymaking process to develop two labor standards ordinances for transportation network companies (TNC) drivers, including contracting for a minimum compensation standard study (Reich and Parrott 2020). The office conducted an extensive stakeholder process and drafted the eventual TNC Driver Minimum Compensation Ordinance (Seattle OLS 2020i), which went into effect in 2021 and the TNC Driver Deactivation Rights Ordinance (DRO). The DRO provides drivers protection against unwarranted termination from companies’ platforms, a pathway to resolve deactivation disputes before a neutral arbitrator, and which created a first-in-the-nation Driver Resolution Center to provide consultation and direct representation to drivers facing deactivation, along with culturally relevant outreach and education, and other support. The Office of Labor Standards completed a request for proposal to award an 18-month contract for just more than $5 million to a community organization to get the Driver Resolution Center up and running (Seattle OLS n.d.h).16

In addition, pursuant to a city council resolution and recommendation by the city’s Domestic Workers Standards Board,17 the Office of Labor Standards will be crafting a proposal for portable paid time off for domestic workers.

Pandemic response: The Office of Labor Standards has taken numerous actions in response to the COVID-19 pandemic. In April 2020, following amendment of the city’s Paid Sick and Safe Time Ordinance (PSST) to expand PSST uses in response to COVID-19, the office conducted emergency rulemaking to ease the burden of verification for use of PSST on workers and the health care system. The office provided updated information in more than 11 languages and, with the city’s Department of Neighborhoods, increased access to this information through audio and video recordings, as well as through trainings and town hall meetings. Responding to the increase of domestic violence during the pandemic, the office also partnered on a safe leave training with a local community organization, API Chaya, and the Mayor’s Office on Domestic Violence and Sexual Assault.

The office also assisted in distribution of food vouchers and masks via community-based organizations, including the office’s Community Education and Outreach Fund partners, to workers who experienced structural or institutional barriers to accessing support from government (e.g., language barrier, fear of deportation, experienced domestic violence, did not qualify for other benefits). The community-based organizations enrolled more than 800 workers who had lost their jobs or experienced a decrease in hours or wages due to the pandemic. Each worker received $1,920 in grocery vouchers over a seven-month period.

Finally, along with the mayor’s office and the Office of Immigrant and Refugee Affairs, the Office of Labor Standards worked to increase access to unemployment funds for workers, especially for potentially misclassified gig workers and domestic workers, and also to enhance access to information about unemployment benefits in multiple languages. One effort included contracting with a community organization for three months to provide cultural- and language-specific outreach and referral assistance to transportation network company, taxi, and for-hire vehicle drivers seeking to access COVID-19-related relief resources. The community organization assisted 1,400 workers with their unemployment insurance claims in 12 languages, including Kiswahili, Nuer, Twi, and Hausa. Another effort included partnering with a local civil legal aid organization to provide training on unemployment insurance, and paid sick and safe time.

Several cities have created boards or councils to provide workers with a formal role and/or access to local government

Workers’ boards are bodies established by governments that include worker representation and that typically aim to provide workers with a voice and formal role in setting higher minimum standards for jobs in particular industries. These boards typically investigate challenges facing workers by conducting hearings and outreach activities, issuing reports on findings, and making recommendations regarding minimum wage rates, benefits, and workplace standards. By focusing on workers in specific industries, these boards are able to address industry-specific issues and involve workers and their organizations directly in governance decisions.

Professor Arindrajat Dube, based on his analysis of industry-specific wage boards in Australia, concludes that wage-setting boards “are much better positioned to deliver gains to middle-wage jobs than a single minimum pay standard” (Dube 2018); the local boards described here do not have wage-setting powers, but some may make recommendations. In 2019, the Center for American Progress issued a how-to guide for state and local governments and advocates interested in developing workers’ boards or similar structures (Andrias, Madland, and Wall 2019). The guide’s detailed recommendations include ensuring a broad mandate; requiring representative and democratic selection of members; granting boards authority to gather relevant information through hearings and investigations; granting boards authority to issue recommendations; creation of strong enforcement mechanisms to ensure compliance with new standards; and empowering worker participation in board activities by requiring employers to provide reasonable time to participate and compensating workers for their participation, among other things.

In some states, preemption of local wage or standard-setting limits potential recommendations a board could make that would result in material policy change; however, even then, workers’ boards may be able to impact local government purchasing and contracting policies, workforce development programs, tax abatement and incentive policies, economic development planning and community benefits agreements, distribution of local government funding, and workplace safety trainings. They may also be able to provide independent monitoring of local, state, and federal public health and labor laws, and inclusive economic development planning. Worker boards are a relatively new development, mostly established in the last five years.

The following are examples of several local worker boards or similar structures:

Seattle Domestic Workers Standards Board: In 2019, Seattle passed the Domestic Workers Ordinance, which along with establishing a minimum wage and entitling workers to rest and meal breaks, also created a Domestic Workers Standards Board (Seattle CC 2018). The board, members of which are appointed by the mayor and city council (and one member is appointed by the board itself), requires representation from domestic workers (including workers who are and are no members of worker organizations), employers, and the community (with an emphasis on vulnerable populations like people with disabilities) (Seattle OLS 2018a). The board is empowered to provide recommendations to the city council on workplace safety standards, discrimination and sexual harassment, training for workers and employers, access to leave, wage standards, workers’ compensation, hiring agreements, and other topics, and has been granted funding to implement these recommendations.

Detroit Industry Standards Boards: Detroit passed an ordinance in November 2021 creating a structure for industry standards boards (SEIU Healthcare 2021; Detroit 2021). A standards board in a specific industry can be established under the ordinance by the city council, at the request of the mayor, or by petition of at least 225 workers in a given industry. The standards boards are composed of workers, employer representatives, and other individuals appointed by the mayor and city council. The industry boards are tasked with investigating industry conditions, conducting outreach to workers, making recommendations as to pay, benefits, training opportunities and scheduling, and forwarding complaints to relevant enforcement agencies.

Harris County (Texas) Essential Workers Board: Harris County established an essential workers board in 2021 to advise the county on programs and policies that support essential workers. All members must be “low-income essential workers,” with at least one worker representative from each of the following essential industries: airport or transportation; construction; domestic work or home care; education or child care; grocery, convenience, or drug store; health care or public health; janitorial; food services, hospitality, or leisure services; and retail (Trovall 2021; Harris County 2021). In addition to advising the county on its overall approach to protecting essential workers’ rights and providing a public forum, the board is also tasked with providing feedback on the county’s “purchasing and contracting policies, workforce development programs, tax abatement and incentive policies, community benefits agreements, distribution of federal COVID-19 relief and recovery funds, disaster preparedness and recovery programs, OSHA trainings, independent monitoring of local, state, and federal public health and labor laws, and inclusive economic development planning.”

Durham (North Carolina) Workers’ Rights Commission: In 2019, Durham formed the Workers’ Rights Commission as an advisory body to the city council on working conditions in Durham. Except for a liaison to the city council, all members are workers appointed by the city council and must include workers from the largest employers in Durham, workers in low-wage industries, workers organized in unions, and unorganized workers. The commission aims to provide a public forum for discussion and exploration of workers’ rights, conduct studies, recommend pro-worker policies for the city council’s state legislative agenda, craft a workers’ bill of rights and develop a voluntary recognition program to reward employer compliance, propose standards to encourage all employers within the city to establish a minimum standard, support workers in union campaigns, and provide channels of communication between organized and unorganized workers (Durham WRC n.d.).

Twin Cities’ Workplace Advisory Committees: In 2016, Minneapolis created a Workplace Advisory Committee in connection with passing the city’s safe and sick time ordinance (Minneapolis 2016a). The committee is composed of representatives from organized labor, workers, and employer representatives, among others. The committee is tasked with providing advice on workplace initiatives, recommendations on community engagement, and monitoring and evaluating implementation of workplace policies (Minneapolis 2016a). St. Paul’s Labor Standards Advisory Committee (St. Paul n.d.a) advises and supports the city’s Labor Standards Enforcement and Education Division. The committee includes representatives of employers, employees, and the public, and advises in the development and implementation of policies, procedures, and rules related to the city’s minimum wage and earned sick and safe time ordinances; recommends actions to improve strategic community outreach and education efforts; supports strategic enforcement and strategic outreach; explores and recommends opportunities and resources to help small businesses; assists with community partnerships; and engages business owners, workers, and community stakeholders to gather feedback and recommendations.

Los Angeles County Public Health Councils (LA PHC n.d.): In November 2020, Los Angeles County approved a program establishing public health councils to help ensure that employers follow COVID safety guidelines. Implemented and overseen by the county’s Department of Public Health, the program empowers workers to form public health councils at their worksites to monitor compliance with county health orders in the following industries: food and apparel manufacturing, warehousing and storage, and restaurant (LA County BOS 2020). The Department of Public Health will enlist the help of certified worker organizations to conduct outreach and education to workers interested in forming public health councils.

Localities can serve as model employers in relation to their own workforces

Localities can support working people by creating good working conditions for their own municipal workforces. Nationally, about one-third of state and local employees are paid less than $20 per hour, and more than 15% are paid less than $15 per hour. In 13 states, more than 20% of state and local workers are paid less than $15 per hour (Sawo and Wolfe 2022). Women and Black workers are more likely to be employed by local and state governments, so improving working conditions for local government workers advances important equity goals (Cooper and Wolfe 2020).

A significant portion of local government employees are union members (40.2% in 2021) (BLS 2022); high unionization rates among law enforcement and teachers contribute to these numbers. Working conditions for these employees are established through collective bargaining agreements with the locality. Working conditions of nonunionized municipal workers are governed by applicable federal, state, and local laws, as well as municipal policy.

Localities can support workers by raising labor standards for their own employees regardless of union membership. They can also take steps to allow and facilitate collective bargaining by their employees.

Limited public funds can lead to concerns about the cost of supporting municipal workers in light of other pressing public funding needs. However, in addition to improving municipal job quality as a matter of values and commitment to working people, localities themselves can benefit from doing so. High-road job offerings can help attract better-qualified workers to local government and reduce turnover, both of which enable local governments to provide higher-quality public services, as well as avoiding the cost associated with employee turnover. Municipal employers are often the largest employers in many regions (Hain and Coffin 2020), and thus improved standards for municipal workers can also lead to additional benefits, like public health gains when paid sick leave prevents spread of illness, and stabilizing and stimulating the local economy in times of stagnation or recession. By exemplifying practices of a model employer, local governments also can play a leadership role for private and nonprofit employers, helping create local norms that lift local working standards generally. And collective bargaining in particular can help reduce racial and gender pay gaps, attract workers to local government, and create high-quality jobs (Morrissey and Sherer 2022).

Local governments can also support municipal workers by limiting and resisting privatization, defined as the shifting of governmental functions and responsibilities to the private sector through such activities as contracting out (Local Progress 2019). Privatization of local government functions has proliferated in the recent past, affecting services and infrastructure like water treatment, trash collection, and toll collection (Early 2021; Dutzik, Imus, and Baxandall 2009). Privatization not only denies opportunities to municipal workers who are more likely to be unionized and to have higher job standards, it also undermines democratic accountability. Moreover, projected cost savings from privatization often do not materialize, and service quality often declines under private provision (PWF n.d.b).18

Localities have raised labor standards for municipal employees

A number of localities have raised the minimum wage paid to their own municipal workforce; recent examples include Atlanta; Jersey City, New Jersey; Milwaukee; New Orleans; North Miami Beach, Florida; Tallahassee, Florida; and West New York, New Jersey (Noble 2021; Fox 2021a, 2021b; Atlanta 2017; Miami Times Staff 2021). More than 100 localities have passed paid family or parental leave policies for their municipal employees (NPWF 2020). Many local governments extended emergency paid sick leave to their municipal workers during the pandemic, and some front-loaded the annual sick leave allotment for all employees (Hain, Yadavalli, and Wagner 2020). The city of Austin distributed stipends to some city workers who continued to provide in-person services during the COVID-19 pandemic (Newberry 2020).

Localities can enable and support collective bargaining and union organizing by municipal workers

Localities also can enable or facilitate collective bargaining and unionizing among their municipal workforce. Public employee unions can be stable bargaining partners to local governments, promote labor peace, and ensure the delivery of high-quality services.19 In addition, unions reduce inequality as well as race and gender disparities (EPI 2021; Bivens et al. 2017) and boost democratic participation (McElwee 2015).

Whether or not local government workers can form and join unions varies by state and by the type of municipal worker. Many state statutes expressly authorize collective bargaining by teachers, police officers, and firefighters (Sanes and Schmitt 2014). In some states, local governments are permitted to collectively bargain with all municipal workers (Monroe 2018; Vermont 1973).20 In some states, local governments are prohibited from doing so.21 In states where collective bargaining for local employees is neither guaranteed nor prohibited by state law, localities can facilitate unionizing and collective bargaining by their own workforces by passing local ordinances permitting collective bargaining. Two states where there has been heightened attention to this issue in recent years are Virginia and Colorado. In Virginia, the General Assembly in 2020 passed a law lifting a previous ban, thereby allowing localities to recognize and collectively bargain with unions by passing an ordinance. A number of Virginia localities have since passed collective bargaining ordinances, including the city of Alexandria, Arlington County, Fairfax County, Loudoun County, and the Richmond School Board (Alexandria Magazine Living Staff 2021; Armus 2021; Olivo 2021; Loudoun 2021; Hunter 2021). In 2022, the Colorado state legislature passed a bill granting public employees the right to collectively bargain; previously localities could decide whether to grant such rights, and out of approximately 270 localities in the state, only 16 had collectively bargained contracts with any of their workers (Colorado General Assembly 2022; Miller 2022; Vo 2022; Kenny 2021). For example, Adams County, Colorado, had passed a resolution in 2017 authorizing collective bargaining for county employees.22 In states such as Colorado and Virginia, localities can explicitly grant their municipal workforce the right to collectively bargain. Cities like Louisville, Kentucky, Memphis, Tennessee, Salt Lake City, Utah, and Tulsa, Oklahoma, have recognized and entered into collective bargaining agreements with municipal unions (Louisville HR n.d.; AFSCME 1733 2021; SLC HR n.d.; Tulsa HR n.d.).

In addition, localities can emulate legislative measures taken by certain states to facilitate public employee union access to government workers in response to the Supreme Court’s decision in Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al. That case held that requiring public employees to pay union fair share agency fees to cover the costs of collective bargaining violates the First Amendment (McNicholas 2018).23 The decision bars unions from requiring workers who benefit from union representation to pay their fair share of that representation, thereby reducing public employee union resources and potentially their stability. In the wake of the Janus decision, a number of states, including California, Massachusetts, New Jersey, Washington, and several others, passed measures to reduce barriers to public-sector unionization, such as by requiring public employers to allow public employee unions access to new employee orientations, and to provide public employee unions with lists of new and current employees with contact information (NCSL 2019).

Finally, the 2022 Report of the White House Task Force on Worker Organizing and Empowerment (Harris and Walsh 2022) contains a number of recommendations for the federal government to increase unionization rates among federal employees. While some of the measures contained in the report would potentially be preempted by the National Labor Relations Act, many of them could be adopted readily by local governments, such as:

• facilitating exposure to unions during the hiring process for job applicants and onboarding process for new employees, including listing information about whether a position is in a bargaining unit and the relevant union in job opportunity announcements, and encouraging agencies to offer their unions more opportunities to communicate with new hires during onboarding
• developing guidance and labor relations materials for agencies to use in trainings for managers and supervisors regarding unfair labor practices and neutrality in union organizing campaigns
• increasing and visibly supporting workers’ right to organize, including a know-your-rights initiative on the right to organize and collectively bargain

The report contains extensive analysis and practical suggestions about ways to encourage and facilitate collective bargaining.

Localities have enacted worker protection laws on a range of topics

Local governments typically have some authority to initiate legislation, subject to their authority under the relevant state constitution, state statutes, and city charters. In recent years, local governments have increasingly used this power to pass laws to advance workers’ rights.24

Laws setting higher minimum wages

In recent years, localities have often led the nation in policymaking to raise workers’ wages. The Fight for 15 campaign and other worker advocates and organizations have played a key role in seeking increased local minimum wage floors, which has paved the way for more innovative policymaking to advance workers’ rights by local governments (Meyerson 2019).25 Local wage and hour laws exist in a statutory landscape, including the federal Fair Labor Standards Act (FLSA), which establishes a federal minimum wage, overtime pay, record-keeping, and youth employment standards, and state laws that similarly establish their own state-level minimum wage and hour standards. The FLSA, and in some cases state law, acts as a floor, permitting local governments to provide more generous protections for workers. Some states, however, preempt local governments from setting higher local requirements, as discussed in further detail below (EPI 2019).

Currently, 52 cities and counties have local minimum wage laws that raise the minimum wage above the level established by state and federal governments (UC Berkeley Labor Center 2022; Lathrop 2021).26 Local minimum wages aim to keep workers out of poverty and to increase consumer purchasing power to spur economic growth. Such wages sometimes are enacted in metropolitan areas where the costs of living are higher relative to the rest of the state or region. Local minimum wages may vary in terms of wage levels, implementation timelines, and exemptions (for example, based on the size or classification of an employer, such as employers with more than 25 employees or nonprofits). Since 2012, local minimum wage increases have affected more than 4 million workers, more than half of whom are workers of color, and generated more than $33 billion in additional income for these workers each year (Lathrop, Lester, and Wilson 2021).

One way to increase the wages of many service workers without setting a higher minimum rate is for a locality to disallow the lower minimum wage that is permitted in many states and under federal law for workers who customarily and regularly receive tips (USDOL 2022b). Tipped workers are more likely to be women and people of color, and more likely to be subject to sexual harassment (Schweitzer 2021).27 In 2016, the city of Flagstaff eliminated the tipped minimum wage by referendum (Results for America n.d.). Las Cruces, New Mexico, also has enacted a higher tipped minimum wage than the state.28

In some instances, laws setting local minimum wage rates have focused on particular industries. Seattle’s Domestic Workers Ordinance requires domestic workers be paid at least the city’s minimum wage (Seattle OLS 2018a). At least four California cities—Los Angeles, Oakland, Santa Monica, and West Hollywood—have required a higher minimum wage for their hotel workers (LA DPW n.d.; Oakland n.d.; Santa Monica n.d.; West Hollywood n.d.).29

Laws addressing wage theft

Wage theft occurs when employees do not receive wages to which they are legally entitled for their work, including paying workers less than the minimum wage, not paying overtime premiums to workers who work more than 40 hours a week, or asking employees to work “off the clock” before or after their shifts. Cooper and Kroeger (2017) investigated just minimum wage violations, and found that in the 10 most populous states in the country (California, Florida, Georgia, Illinois, Michigan, New York, North Carolina, Ohio, Pennsylvania, and Texas), 17% of eligible low-wage workers reported being paid less than the minimum wage, amounting to 2.4 million workers losing $8 billion annually. Cooper and Kroeger estimate that workers nationwide lose $15 billion annually from minimum wage violations alone. A 2021 study found that more than $3 billion was recovered on behalf of workers by federal and state enforcers and through private litigation (Mangundayao et al. 2021).

In addition to setting up dedicated enforcement agencies and ensuring that these agencies are robustly funded to pursue violations, local governments can pass laws to address the problem of wage theft. For example, Denver passed a wage theft ordinance that classifies wage theft as a criminal misdemeanor and empowers the city attorney’s office to prosecute claims of $2,000 or less and seek restitution (Denver 2021).

In some instances, such measures may be a way for cities preempted from setting minimum wage rates to nonetheless have an impact on wage-related concerns and to protect workers within their jurisdiction from predation and abuse. Numerous localities in Florida have passed ordinances setting up administrative processes that make it easier for workers to file a complaint and recoup stolen wages without retaining a lawyer. In Florida, Miami-Dade County led the way, followed by Alachua County, Broward County, Hillsborough County, Osceola County, Pinellas County, and the city of St. Petersburg (Huizar 2019b). These ordinances set out a procedure for administrative resolution of wage theft claims by first allowing workers with claims of more than $60 in unpaid wages to settle claims with the city’s help. If those claims are not resolved, workers then may proceed to a hearing where the employer may be exposed to additional penalties (Miami-Dade WTP n.d.). An analysis of the Miami-Dade County Wage Theft Program found that between its adoption in 2010 and September 2014, workers recovered $2,039.83 in unpaid wages, on average, an amount researchers found was “well above the average recovered by federal enforcement” (RISEP-FIU 2014).

Finally, more wage theft protections at the city level may be on the horizon. The Austin (Texas) City Council passed a resolution in early 2022 directing the city manager to develop an ordinance on wage theft, with stakeholder input.30 Houston and El Paso, Texas, had previously passed similar resolutions (Ramirez 2022).

Paid sick and safe leave

Presently, 19 cities and counties have laws requiring employers to permit workers to take time to recover from an illness or care for a sick loved one and to be compensated for that time (A Better Balance n.d.b, 2021).31^, 32 Now 14 states and Washington, D.C., also have passed laws requiring paid sick leave (A Better Balance n.d.b), but local governments first led the way. For example, Jersey City, New Jersey, first enacted a paid sick leave ordinance in 2013, followed by 12 additional cities before a statewide law took effect in 2018.33 Research shows that paid sick leave ordinances effectively slow and reduce the spread of contagious illnesses by reducing the likelihood that workers will go to the workplace sick (otherwise referred to as sick presenteeism) (WCEG 2020). Especially for workers in low-wage industries, paid sick leave provides economic security when facing illness. Meanwhile, research has shown that businesses do not find such laws to be particularly burdensome once they are in effect. For example, a study of New York City employers revealed that “[b]y their own account, the vast majority of employers were able to adjust quite easily to the new law, and for most the cost impact was minimal to nonexistent” (Appelbaum and Milkman 2016). Moreover, 86% of the employers surveyed expressed support for the paid sick days law.

Local paid sick leave laws vary—i.e., exemptions for smaller employers, how family and loved ones are defined, the rate at which workers accrue sick time, and when workers start to earn sick time and whether it rolls over. However, many of them were developed with the technical assistance of groups like the nonprofit organization A Better Balance (A Better Balance n.d.a), and therefore have similar features. They generally provide somewhere in the range of 40 to 48 hours of leave annually, and prohibit retaliation against workers for taking leave.

Some of these laws also create a right to “safe leave” for situations in which workers or their family members are victims of domestic violence, stalking, and sexual assault (A Better Balance 2019). Safe leave laws can be used, for example, to obtain a protective order, access social services, or relocate.

Fair scheduling

Eight cities—Chicago; Emeryville, California; New York City; Philadelphia; San Francisco; San Jose, California; SeaTac, Washington; and Seattle—have laws to ensure workers have predictable schedules, more opportunities for existing employees to work, and sufficient periods of rest between shifts (A Better Balance 2022c). This set of policies, which have commonly been referred to as fair workweek or fair scheduling laws, have been championed and implemented because workers, particularly in the service sector, commonly receive their weekly work schedules only a few days in advance, and their scheduled work hours and workdays often change substantially from week to week. Fair workweek laws were first passed at the local level (Fair Workweek Initiative n.d.), paving the way for state-level action; Oregon has now adopted a statewide fair scheduling law.

Research suggests that unstable and unpredictable work scheduling practices undermine workers’ health and well-being and also lead to economic insecurity and income volatility, and that the fair workweek law in Seattle increased not only schedule predictability, but also subjective well-being, sleep quality, and economic security (Harknett, Schneider, and Irwin 2021). Most fair scheduling laws cover specific industries, such as retail or fast-food. They require covered employers to provide an initial estimate of a worker’s schedule upon hiring, advance notice of schedules, and compensation (predictability pay) for employer-initiated schedule changes with less than the requisite notice; workers also typically have the right to decline shifts that do not allow for a requisite period of rest, and the right to request a modified schedule.

In addition, because many workers in the relevant sectors seek additional work hours, fair workweek laws generally require employers to offer additional hours to existing employees before hiring new staff. Such laws also typically include provisions that prohibit employers from retaliating against workers for exercising rights under fair scheduling laws. Fair scheduling laws differ as to which employers are covered (typically limited by size and industry), notice and rest times, the level of predictability pay, and the like. San Francisco’s Family Friendly Workplace Ordinance specifically entitles workers to request a flexible or predictable schedule to assist with caregiving responsibilities, and requires employers to engage in an interactive process with the worker (San Francisco 2013).

Laws governing platform companies in the ‘gig’ economy

Almost all federal and state laws governing the workplace protect employees and not independent contractors. Platform companies in the so-called “gig” economy, in which workers are hired via apps, treat workers as independent contractors instead of as employees, thereby avoiding the obligations of an employer. This practice has led to considerable litigation, including lawsuits by the attorneys general of California and Massachusetts, alleging that such workers are misclassified (Gerstein 2020). Employer misclassification of workers as independent contractors is a longstanding, pervasive problem affecting millions of workers annually (Rhinehart et al. 2021).

New York City and Seattle have both passed ordinances creating various rights and protections for these workers, even as the cities have refrained from determinations about employee status. In 2018, New York City passed legislation34 empowering the relevant regulatory agency, the Taxi and Limousine Commission (TLC), to set minimum pay rates; accordingly, later that year, the TLC issued a rule (NYC TLC 2018) setting a minimum pay standard based on a study it had commissioned (Reich and Parrott 2020). In 2020, Seattle passed a similar ordinance (Seattle OLS 2020i) setting minimum pay for transportation network company drivers. New York City has also passed legislation35 allowing a city agency to set minimum payments for third-party (typically app-based) food delivery and courier providers. A comprehensive proposal to improve pay and transparency about working conditions for such workers was passed in 2022 by the Seattle City Council (Bull 2022, Taylor 2022a).

Seattle also passed a Transportation Network Company (TNC) Driver Deactivation Rights Ordinance (Seattle OLS 2021l), which grants drivers the right to challenge unwarranted deactivations before a neutral arbitrator, and creates a Driver Resolution Center to provide representation for drivers.36

Finally, in 2021, New York City passed a series of policies to protect delivery workers whose precarity was made clear during the COVID-19 pandemic (Figueroa et al. n.d.). An organization of bicycle delivery workers, Los Deliveristas Unidos, played a significant role in advocating for the new law (Los Deliveristas Unidos n.d.; City Staff 2021). The policies include a requirement that restaurants allow delivery workers to use their restrooms as long as they are picking up an order; minimum per-trip payments; transparency for customers and workers about tips (whether the tip goes to workers, in what form, and on what timeline); a prohibition on fees for receiving payment and a requirement that payments are made weekly, including at least one option that does not require a bank account; a prohibition on charging workers for insulated delivery bags; and permission for workers to limit their personal delivery zones (Sugar 2021).

Protections for freelancers or independent contractors

Minneapolis, New York City, and Seattle have passed laws to aid freelancers and independent contractors in securing timely payment for their work. Because such workers are not generally protected by employment law, they often face challenges in securing payment for their work, which is enforced by contract law and therefore typically requires securing legal counsel for any enforcement action (Yang et al. 2020). These local ordinances protecting freelancers require a written contract that includes certain written terms (e.g., pay rate and payment schedule) for a value greater than a minimum amount, require payment within 30 days of completion of the contract, offer protection against retaliation, and set up an administrative enforcement process. In 2022, the New York State legislature passed a state-level Freelance Isn’t Free Act based on New York City’s model (Maher 2022).

Protections against discrimination

Although the focus of this report is labor standards, not discrimination, it is worth noting that local governments have passed laws to expand protections from employment discrimination beyond what is protected under federal and state law. These local laws are typically enforced by local fair employment practices agencies (FEPAs), which are typically separate from agencies that enforce labor laws that regulate workers’ wages, hours, and benefits. For example, at least 330 local governments have passed nondiscrimination ordinances protecting workers from discrimination at work on the basis of sexual orientation, and at least 225 have done so to protect workers from discrimination on the basis of gender identity as well (MAP n.d.; HRC n.d.). Some local ordinances also protect workers from discrimination on the basis of marital or partnership status, family status, immigration status, status as a veteran, credit history, caregiver status, sexual and reproductive health decisions, salary history, weight and height, and status as a victim of domestic violence, stalking, or sex offenses (Vanderbilt 2012; Eidelson 2022; Brown 2002). In addition, federal employment discrimination protections only apply to employers with 15 or more workers, and local ordinances also often cover smaller workplaces (Clampitt n.d.). New York City in 2022 included domestic workers in the law prohibiting workplace discrimination (NYC CHR 2021). In addition, San Francisco in 2017 passed a law requiring employers to provide a reasonable break for a worker desiring to express breast milk for their child and to provide a space for lactation, other than a bathroom, that is shielded from view and intrusion (San Francisco 2017).

Several types of local anti-discrimination laws are described in more detail below.

Fair chance hiring

At least 22 local governments have passed laws requiring private and public employers to consider a candidate’s job qualifications before inquiring about a candidate’s criminal history—commonly referred to as “ban-the-box” or “fair chance” policies (Avery and Lu 2021). They may also prohibit consideration of certain types of past offenses, or require hiring entities to consider evidence of an applicant’s rehabilitation. Even more cities and counties have adopted fair chance hiring for their vendors’ or their own hiring. Fair chance policies vary as to the size of covered employers, when a background check is permitted in the job application and interview process, penalties, and enforcement.

Salary history bans

At least 20 local governments have passed laws prohibiting employers from inquiring about a job applicant’s salary history during the hiring process (HR Dive 2022; AAUW 2022).37 These ordinances seek to remedy systemic pay discrimination against women and people of color by allowing applicants to negotiate a salary based on their qualifications and earning potential, rather than being measured by their previous salary. Some local ordinances apply to private employers operating in the jurisdiction, whereas others apply only to local government hiring processes.

Pay transparency law

In January 2022, New York City became the first city38 to enact a pay transparency law,39 which requires employers to list a minimum and maximum salary for positions located in the city. This type of pay transparency law helps curb pay inequities. The law amends the New York City Human Rights Law (NYCHRL), the city’s ordinance that protects against employment discrimination, and makes any failure to post salary ranges an “unlawful discriminatory practice.” Ithaca, New York also passed a similar pay transparency law in May 2022 that applies to any employer with more than three permanent workers based in Ithaca (Zerez 2022).

Crown Act

Twenty eight municipalities, including New York City, have passed laws prohibiting discrimination based on a worker’s hairstyle or hair texture (NYC CHR 2019). Often known as the Crown Act (NAACP LDEF n.d.), these laws aim to address the impact of natural hair-based discrimination Black workers face in the workplace.

Protections against wrongful termination

Throughout the United States, almost all states have what is known as at-will employment; employers may terminate workers for reasons unrelated to job performance, as long as they are not discriminatory, retaliatory, or otherwise violative of the law. Just cause protections prevent employers from legally firing workers without warning or explanation (Tung, Sonn, and Odessky 2021). Such laws promote economic security and stability for workers and their families; they also protect workers from retaliation for raising concerns about violations of workplace laws.

Both Philadelphia and New York City have adopted ordinances that prohibit employers in certain industries from arbitrarily terminating employees. In Philadelphia, parking workers may only be terminated for just cause (which requires progressive discipline) or a bona fide economic reason (Philadelphia DOL 2021). New York City passed similar legislation applicable to fast-food workers (NYC OM 2021e).40 That legislation was recently upheld in the face of a legal challenge.41

In addition, in the wake of Hurricane Irma in 2017, the Miami-Dade Board of County Commissioners passed an ordinance (Miami-Dade Cty. 2018) prohibiting employers from retaliating or threatening to retaliate against nonessential employees for complying with county evacuation or other county executive orders during a declared state of local emergency.

Worker retention laws

Some localities have passed laws to protect workers’ employment when services are contracted out or when a contract changes hands (see Weil 2014, Weil n.d. on the “fissured workplace”). At least four cities (Hoboken, Newark, New York City, and Philadelphia) have passed laws that generally require successor contractors that operate in those cities to retain employees for at least 90 days, provide written offers of employment, retain employees by seniority, and maintain a preferential hiring list of employees not retained (Keon 2021; Kiefer 2022; Hoboken n.d.b., Jackson Lewis P.C. 2016). These laws differ in the categories of workers that are covered; Philadelphia’s ordinance provides the broadest coverage including security, janitorial, building maintenance, food and beverage, hotel service, and health care services workers (Keon and Sopher 2021). Unlike the policies addressing contractors discussed in Section 8, these ordinances apply to all contractors and subcontractors, not only those contracting with the relevant local government.

Industry-specific protections

Workers in certain industries may be subject to specific harms or be especially vulnerable to violations of the law. As a result, some local governments have passed laws specifically protecting workers in those industries.

Domestic workers

Chicago, Philadelphia, and Seattle have passed laws to provide domestic workers’ rights. In Seattle and Philadelphia, domestic worker bills of rights seek to ensure healthy working hours, sufficient earnings, and protections from sexual harassment and other exploitation. There are 2.2 million domestic workers in the United States—these housekeepers, child care workers, and home care workers are overwhelmingly (91.5%) women and are likely to be people of color, born outside of the United States, and older than other workers (Wolfe et al. 2020). Domestic workers are three times as likely to be living in poverty as other workers, and often are not protected by federal and state labor laws (Wolfe et al. 2020).42 Bill of rights ordinances typically provide domestic workers with meal and rest breaks, paid time off, and protections from sexual harassment and discrimination. Seattle’s law also created a Domestic Workers Standards Board, which provides a forum for employers, domestic workers, worker organizations, and the public to consider, analyze, and make recommendations to the city on other possible legal protections and standards for domestic workers (Seattle OLS 2018a). Chicago and Philadelphia have laws that provide domestic workers with the right to a written contract in English, as well as the language preferred by the worker (Chicago Dept. BACP 2021b; Philadelphia 2021b; Esposito 2021).

Hotel workers

At least seven cities have passed laws requiring hotels to equip workers with panic buttons, GPS-enabled devices that alert security when activated, and other protections (Hotel Tech Report 2022; Oakland OCA 2019). Entering a hotel room occupied by a visitor often places workers at risk of sexual harassment and assault, and data show that women in the hospitality and restaurant industries have the highest rates of sexual harassment on the job (Campbell 2019). In addition to requiring panic buttons, local ordinances typically require notice in each hotel room indicating that workers are equipped with panic buttons, and, in some cases, require hotel employers to develop and comply with a sexual harassment policy, take safeguarding steps after receiving an allegation of harassment, and prohibit retaliation for reporting sexual harassment or assault (UNITE HERE Local 1 2022; West Hollywood CC 2021). At least five cities have also passed laws regulating workloads, including regulation of hours and amount of work denoted in maximum square footage cleaned in a day (Stokes and Sarchet 2018; Santa Monica 2019; Sarchet 2021; Wagner 2020; Seattle OLS 2020f; Emeryville 2022). A few localities require additional payments from employers to increase health care access, and preferential hiring to retain workers when hotel ownership changes (Wagner 2020; Sarchet 2021; Santa Monica 2019).

Fast-food workers

New York City in 2017 passed a law, which is no longer in effect, requiring fast-food employers, upon authorization by an employee, to deduct voluntary contributions from workers’ paychecks and remit them to a nonprofit organization (not a labor union) designated by the employee (NYC n.d.c).43 The voluntary contributions were intended to enable and facilitate such workers having support and assistance from an organization advocating on their behalf, addressing work-related issues and other matters affecting working people.

Grocery workers

Los Angeles, New York City, and San Francisco have grocery worker retention policies that require new grocery store owners to retain employees of the previous owner for a 90-day transitional period after a change in ownership of the grocery store (NYC OLPS n.d.a; PWF n.d.e).44 The ordinances also establish a review process through which workers will be considered for continued employment.

Car wash workers

New York City’s car wash accountability law requires car washes to obtain a license to operate (NYC DCWP n.d.a). In addition to a license application, car washes must provide proof of workers’ compensation insurance, proof of disability benefits insurance, proof of commercial general liability insurance, and proof of unemployment insurance. Notably, car washes must also post a surety bond (also known as a wage bond) to cover potential wage claims as a condition of doing business.

Adult entertainment workers

Minneapolis in 2019 passed an ordinance requiring adult businesses to give workers copies of their contracts, post rules for customer conduct and workers’ rights, and prohibit retaliation against workers who report violations (Otárola 2019). Under the law, managers and owners are also prohibited from taking tips from workers, and workers will be provided security escorts when leaving after a shift. The ordinance also requires businesses to follow standard cleaning procedures, clear tripping hazards, and install security cameras to monitor all areas where entertainers interact with customers.

Wage standards and other requirements for local contractors or license/permit holders

Many localities have placed requirements on their contractors, including prevailing wage laws, living wage laws, and responsible bidder rules. In addition, some localities have created requirements for license or permit holders, in relation to compliance with labor laws or disclosure of past violations. Section 7 contains a detailed discussion of local laws affecting government contractors, and those affecting license and permit applicants and holders.

Higher labor standards for airport workers

Airports throughout the country are owned and operated by public entities—local and state governments, and regional entities composed of such governments (NASEM 2017).45 These public entities have required minimum wages for contractors and vendors at airports as a condition of being permitted to operate there. Many airport workers are low-paid; research has shown declining or stagnant wages, and poor working conditions (Sainato 2018; Editorial Board NYT 2018; Houston n.d.; Dietz, Hall, and Jacobs 2013). The Service Employees International Union (SEIU) has catalyzed airport-driven wage increases as a way to improve the working conditions of poorly paid janitorial, catering, food service, and other workers in airport facilities.

In places where local governments have authority to regulate the airport, many localities have exercised this authority to require all airport contractors to pay a higher minimum wage than the wage broadly required within the surrounding jurisdiction. Counties that have taken such action include Broward County (Fort Lauderdale, Florida) and Miami-Dade County, Florida (Miami-Dade Cty. n.d.a, n.d.b; Broward 2021). Cities taking similar action include Chicago, Denver, Houston, Los Angeles, Oakland, Philadelphia, Portland, Oregon, St. Louis, San Francisco, and San Jose, California (Spielman 2022; SEIU 2019; Houston n.d.; LAWA n.d.; Philadelphia CC 2021b; Holton 2021; Philadelphia CC 2021a; Port of Portland 2020; Port of Oakland 2001, 2021; STL Air Portal n.d.; SF OLSE n.d.d; Aitken 2021). In some instances, additional labor standards are required of airport contractors; for example, San Francisco also applied its health care ordinance to airport workers (San Francisco 2020), and the city of Los Angeles includes a worker retention provision (LAWA n.d.).

Some localities like Miami-Dade County, Philadelphia, and San Francisco, require certain contractors operating at the airport to enter into labor peace agreements with labor unions (LAWA n.d.).46 A labor peace agreement generally requires the employer and union to waive certain rights under federal law with respect to union organizing (for example, neutrality and nonopposition to the union on the employer side and a promise not to strike, picket, or disrupt the employer’s operations on the union side) to ensure uninterrupted workflow or, in the case of government, uninterrupted delivery of public services. In addition, the city of SeaTac, Washington, does not contain Seattle’s airport, but largely surrounds the airport; it passed an ordinance setting minimum employment standards for hospitality and transportation industry employers that requires higher wages for hotels and other businesses in the airport’s immediate vicinity (SeaTac n.d.).

Protecting workers and public health during the COVID-19 pandemic

Local governments have played a crucial role in protecting public health and worker safety during the COVID-19 pandemic. Especially given the failure of the federal government to take actions to protect worker safety in the beginning of the pandemic—and then subsequent action by the U.S. Supreme Court preventing the federal government from implementing a vaccine-or-test standard for workplaces—local and state governments have had to take emergency action to protect workers and public health (Rosenberg 2021; Totenberg 2022). Given that COVID-19 spreads through airborne transmission of respiratory droplets from infected people, protecting workers from contracting and spreading COVID-19 also plays an important role in protecting overall community public health and safety. Moreover, because of racial health disparities and the overrepresentation of people of color as essential workers, Black and Latino workers have been and remain at higher risk of contracting and developing serious complications from COVID-19 (UIC SPH 2021).

Local governments have used myriad authorities and programs to address the challenges facing workers during the pandemic, including emergency authorities often pegged to the duration of a local public health emergency order.47 Local governments—most typically by mayoral executive order—have used these emergency authorities to issue stay-at-home orders, as well as masking, testing, quarantine, and vaccination requirements (Foster n.d.; Kim and Romero 2021). For example, in December 2021, New York City’s mayor issued an order requiring all workers who perform in-person work or who interact with the public to be vaccinated (NYC DOH n.d.). These orders were typically enforced by local public health departments which, in some places, have taken complaints from workers and taken enforcement actions to stop workplace spread. Although these local public health measures are not always tied to the workplace, they are crucial to worker health and safety by ensuring that workers can stay home when necessary and reducing the likelihood of unmasked interactions.

In addition to the specific policies and programs intended to protect workers and public health during the pandemic outlined below, local governments also have established worker boards to hear from workers affected by the pandemic;48 mounted public education campaigns to inform workers, employers, and patrons about COVID safety at work (SAW LA n.d.); provided personal protective equipment (PPE) to employers for distribution to workers (St. Louis 2020); and set up funds for undocumented workers who were excluded from unemployment insurance and other federal funding (MF Phila. n.d.).

Paid sick leave: Modifications, enforcement, and emergency policies

As discussed above, 19 local governments have permanent paid sick leave laws. At least 16 local governments have made clear that paid sick leave may be used when their workplace or their child’s school or child care facility is closed due to a public health emergency (A Better Balance 2020, 2022b).49 Philadelphia, San Francisco, and Seattle temporarily limited employers from requiring a doctor’s note for employees to take sick leave (Philadelphia OMD 2020; SF OLSE 2020; Seattle OLS 2020g).

In addition to clarification and enforcement of permanent paid sick leave policies, local governments have also enacted emergency paid sick leave policies to supplement or extend federal emergency protections.50 For a period, the federal Families First Coronavirus Response Act required employers with fewer than 500 employees to provide workers with paid sick leave or expanded family and medical leave for reasons related to COVID-19, including the need to quarantine, care for an individual in quarantine, or care for a child whose care or schooling has been disrupted by the pandemic. Several local governments have passed paid sick leave legislation that supplements federal protections, for example by applying to employers with more than 500 workers, adding eligibility by permitting workers to take paid leave because they are older than 65 or are particularly vulnerable to COVID-19, and expressly permitting workers to take leave for vaccination-related illness (A Better Balance 2020). Local governments like Burlington, Vermont; Flemington, New Jersey; Shelby County, Tennessee; and Wilmington, North Carolina, enacted such emergency paid sick leave policies for their local government employees (A Better Balance 2020). Philadelphia51 and Seattle52 have passed emergency paid sick leave policies that extend to food delivery and transportation gig workers. Los Angeles County passed legislation requiring employers to provide additional paid leave for vaccination and recovery for workers who had exhausted their paid leave (LA County LED 2021).

Protection against retaliation in connection with workplace safety

Los Angeles County and Philadelphia passed ordinances prohibiting employer retaliation against workers in connection with workplace safety and compliance with COVID-19 public health orders. Los Angeles County’s law prohibits any adverse action by an employer against a worker for blowing the whistle on noncompliance with public health orders; discussing any perceived noncompliance with the county, other employees, or members of a public health council; belonging to a public health council; or informing employees of their rights under this ordinance (LA LED 2020; LA County n.d.). Notably, Los Angeles County’s law does not sunset. Philadelphia’s law53 prohibits employers from taking any adverse action against a worker for refusing to work in unsafe conditions if the worker reasonably believes the employer is operating in violation of a public health order and has notified the employer. An anti-retaliation law passed in Chicago (Chicago Dept. BACP 2022) protects against retaliation in relation to compliance with COVID-19 public health orders.

Hazard and premium pay

More than two dozen local governments in California and in the Seattle metropolitan area passed laws mandating hourly hazard pay bonuses of typically $4 or $5 per hour for grocery store workers (Egan et al. 2021; King 5 Staff 2021). Some laws also cover drugstore employers and vary as to the size of the employer covered (Kinder and Stateler 2021). Seattle also passed an ordinance providing food delivery gig workers premium pay on a per pick-up and drop-off basis (Seattle OLS 2020c).

Right to recall

At least 18 cities (Fair Hotel 2021) have passed laws—commonly referred to as “right to recall” or “right to return” laws—to protect workers in certain affected industries that were laid off during the pandemic. In particular, the leisure and hospitality sector accounts for 39% of total jobs lost due to the pandemic, which disproportionately affected workers of color (Huang 2021). These laws require employers to offer positions that become available first to qualified laid-off workers, typically in order of seniority. The laws vary as to which employers are covered (hospitality, event centers, commercial real estate), and whether laid-off workers can become qualified for the position with the same training that would be provided to a new employee hired into that position, enforcement, and notice. Detroit also passed a resolution in support of the right of recall, but is preempted by the state of Michigan from enacting an ordinance to that effect (DeVito 2021). Five cities have also applied this right to recall to changes in ownership of the employer (Fair Hotel 2021).

Severance

Shortly after emergency federal unemployment insurance relief in response to the COVID-19 pandemic expired, New York City passed a severance law requiring hotels with at least 100 rooms to pay a weekly severance of $500 per employee per week to laid off-employees for up to 30 weeks until the hotel has recalled 25% or more of its employees or reopened to the public (Moss 2022).

Vaccination

In addition to providing emergency paid sick leave for vaccination and recovery, local governments also have partnered with worker organizations to promote vaccination. Philadelphia partnered with the National Domestic Workers Alliance to transport workers to vaccine sites, where city officials addressed concerns by providing information about paid sick leave laws. Houston partnered with SEIU to deliver vaccines to janitors (Gerstein and Salas 2021).

Discrimination

San Francisco ​​enacted an ordinance prohibiting employers from discrimination based on exposure to or having tested positive for COVID-19 (SF OLSE n.d.b). Employers are prohibited from taking any adverse action (i.e., firing, threatening to fire, suspending, disciplining, rescinding an offer) against a worker because the worker tested positive for COVID-19 or is isolating or quarantining due to COVID-19 symptoms or exposure.

Federal and state preemption should be considered but still permit considerable action on workers’ rights matters

Preemption occurs when a higher level of government (for example, the federal or state government) restricts or withdraws the authority of a lower level of government (such as a city council) to act on a particular issue. While a detailed discussion of preemption is beyond the scope of this report, it is important for local governments to consider potential preemption by federal or state law.

Federal preemption

An analysis of federal preemption starts with the question of congressional intent: Did Congress intend to displace state or local law? Federal preemption limits some possibility for local action on workers’ rights, but still leaves significant room for legislation, enforcement, contracting consequences, and other local innovation. Some relevant federal laws and points to consider are as follows:

• The National Labor Relations Act (NLRA) guarantees and regulates the right of private-sector workers to organize into unions, bargain collectively, and take collective action to improve their working conditions. NLRA preemption is quite broad, and for workers covered by the NLRA, local and state governments are preempted from regulating workers’ rights to form and join labor unions or to bargain collectively with their employers, employer speech about unionization, and bargaining rules and obligations (Sachs 2011). Notable exceptions are when a state exercises traditional police powers; also when a state or local government acts as a “market participant,” it enjoys the same freedom to structure its labor policies as a private party and is not limited by NLRA preemption. Thus, local governments can require contracts to honor prehire agreements, for example.57 Moreover, local governments are free to enact labor laws that otherwise would be preempted by the NLRA for workers who are not covered by the law (i.e., farmworkers and domestic workers).
• The Occupational Safety and Health Act (OSH Act) regulates workplace safety nationally. It only preempts local and state action when there is a standard set by the Occupational Safety and Health Administration (OSHA) addressing a particular and specific workplace hazard (Flanagan, Gerstein, and Smith 2020). However, even if there is an OSHA standard, a local law, regulation, order, or government action will not be preempted if it protects the general public; to wit, laws of “general applicability (such as laws regarding traffic safety or fire safety) that do not conflict with OSHA standards and that regulate the conduct of workers and non-workers alike would generally not be pre-empted.”58 For example, a New York City building code provision regulating cranes was found not to be preempted because it protected not only workers, but also the “safety of the general public in the vicinity.”59 In addition, 21 states and Puerto Rico have become OSHA-approved “state plans” (USDOL OSHA n.d.) that regulate private-sector workplace safety and health themselves; they are subject to OSHA oversight and their provisions must be as protective of workers as OSHA standards and regulations (USDOL OSHA n.d.).60 In such states, federal OSHA preemption would not apply.
• There is no preemption of local standards that are more protective of workers under the Fair Labor Standards Act (FLSA), which sets the floor for minimum wage, overtime pay, record-keeping, and youth employment standards nationwide.61 In other words, the FLSA does not preempt higher minimum wages at the state and local levels.
• As a general matter, exercise of traditional police powers (civil or criminal) does not lead to preemption concerns. Longstanding principle in preemption cases requires courts to “start with the assumption that the historic police powers of the states are not to be superseded…unless that was the clear and manifest purpose of Congress.”62 For example, criminal prosecutions of employers, or civil tort lawsuits, for conduct that would also give rise to occupational safety and health violations generally would not be preempted (Flanagan, Gerstein, and Smith 2020).

State preemption

Local policymaking to advance and expand and protect workers’ rights, as well as other progressive causes, is substantially hindered by the emergence of state preemption used in a punitive manner (Briffault 2018).63 In particular, conservative state legislatures have increasingly preempted local efforts to increase the minimum wage, guarantee paid sick leave, require fair scheduling, regulate gig employers, and set prevailing wages for municipal contracts (Wolfe et al. 2021). For example, at least 26 states have passed preemption laws to prohibit local governments from setting minimum wages higher than the state minimum wage (EPI 2019). The preemption of local policies to support workers’ rights is most common in the South and Midwest, where these laws are part of a long history of efforts to limit the rights and freedoms of Black people (Blair et al. 2020; Wolfe et al. 2021). Even a progressive state like Washington recently moved in this problematic direction when the state legislature passed a bill on transportation network companies (like Uber and Lyft) that preempts any local regulation of the industry.64

An encouraging development in this area occurred in Colorado, when the state in 2019 reversed its prior preemption of local labor standards, providing cities and worker advocates in other states with potential lessons in how to do the same elsewhere (Huizar 2019a).

Even in the face of state and local preemption, there are still opportunities for localities and local government leaders to take action to protect workers: passing legislation that is not preempted; setting high standards in relation to local government employees; conducting extensive know-your-rights outreach and public education about workers’ rights; supporting pro-worker state legislation; conducting research and issuing reports on worker issues; documenting the extent of labor violations; promoting labor compliance by local government contractors, permit-holders, and licensees; and advocating for an end to state-level preemption. In addition, the Local Solutions Support Center and National Employment Law Project have created resources to assist localities in making assessments regarding preemption of desired action (Huizar 2021; LSSC 2020a, 2020b).

Enforcing local worker protection laws

This section provides examples of the enforcement cases brought by local labor agencies in recent years. However, it is important to note that the case descriptions are just a sampling of enforcement work performed at the city level, based on publicly available media coverage and press announcements. Only a few city agencies routinely issue news releases or disclose employer information about their investigations. More could recognize news releases as a tool in their worker protection toolkit, given the documented impact (Johnson 2020) of deterring employer violations by issuing press releases in workplace enforcement.

Some office websites include dashboards, posted annual reports, or other compilations of enforcement work, which should be consulted in conjunction with the below case descriptions, in order to obtain a fuller picture of the work being done. For example, Denver Labor, a division of the Denver Auditor’s office created in 2019, posts restitution stories (Denver n.d.b) on its website, summarizing the office’s enforcement work, including industry of employers, type of work, amount of money recovered, and the number of workers involved, although it does not mention specific employer names. The Seattle Office of Labor Standards has a Resolved Investigations (Seattle OLS n.d.e) section of its website, with detailed information about closed cases, and in 2021 released a press announcement (Seattle OLS 2021h) commemorating the office’s six-year anniversary and detailing accomplishments in that time. In addition, a number of offices post annual or periodic reports that include information not only about enforcement actions, but also about legal developments, outreach and public education activities, regulations issued, and more. (See Section 9 for more detail).

In addition to dedicated labor standards offices, it should be noted that city and county attorneys, who represent local government entities in legal proceedings, have sometimes enforced local worker protection laws. Some city and county attorneys have criminal authority to prosecute misdemeanors, but they typically bring and defend civil suits on behalf of local governments. Many city and county attorneys have the authority to enforce local ordinances to protect workers, although such enforcement is uncommon in many jurisdictions. In some states, they also have the authority to enforce select state laws,65 and they also can bring impact litigation on behalf of local governments (Justice Catalyst et al. 2019). In some cases, city or county attorneys have enforced workplace laws, either independently or in conjunction with municipal labor standards offices or other government entities.66 District attorneys, and in some places county or state’s attorneys, are responsible for criminal enforcement, and are increasingly using those powers to prosecute employer crimes involving serious violations of workers’ rights. In some jurisdictions, they have authority to bring civil cases as well.67 Criminal prosecutors have also been increasingly active in bringing charges against employers to protect workers’ rights (Gerstein 2021). In addition, some local auditors and controllers also enforce workplace laws. For example, in New York City, the comptroller plays a significant role in enforcing prevailing wage and other laws within the city (NYC Comptroller n.d.), and the city controller also enforces Pittsburgh’s prevailing wage ordinance (Pittsburgh 2010). Local departments or agencies that focus on contract enforcement may also enforce worker protections and standards in local governments contracts (LA City BCA n.d.). While enforcement action by these various officials is noteworthy, the cases outlined below generally include those brought by local labor standards agencies.

Examples of enforcement

In the compilation of cases below, where the same employer has committed multiple violations of law, to avoid duplication, cases are listed in one category only.

Paid sick leave

Enforcing paid sick leave laws has been a significant focus for many local agencies, particularly since these laws often exist only at the local level. New York and Seattle have been particularly active in this area. Agencies have obtained restitution for workers, as well as reinstatement in some cases. In some instances, settlements have also included crediting workers with additional paid sick leave in the future. New York City required Starbucks to educate the public about paid sick leave laws through posters in public areas, and Minneapolis required a home health agency to train all managers and staff on the relevant law.

New York City’s Department of Consumer and Worker Protection has enforced paid sick leave laws in multiple industries, with noteworthy cases involving fast-food, home care, and airline industry workers.

• The department conducted multiple investigations of paid sick leave violations involving home health agencies, including a 2021 collaborative case with the New York state attorney general’s office resulting in the recovery of up to $18 million for 12,000 home health aides at two agencies that underpaid workers and did not provide paid sick leave. In 2022, the department also reached settlements involving two domestic workers who had been denied paid sick leave (NYC DCA 2018a; NYC OM 2020a, 2021c; NYC DCWP 2022).
• Fast-food industry cases include a $155,000 settlement with a McDonald’s franchisee in 2019 (also involving fair workweek violations); an ongoing case against Chipotle, in the midst of which the city obtained reinstatement for a worker who had been unlawfully terminated; and a 2019 settlement with Starbucks, jointly with the New York state attorney general’s office, in which the company agreed to create a $150,000 restitution fund for employees whose rights had been violated, and to promote public education about the paid sick and safe leave law by requiring Starbucks to post an educational poster about paid sick leave in public locations in all New York City stores (NYC OM 2019b, 2020c NYC OM 2019c).
• The department in 2019 sued American Airlines for violating the paid sick and safe leave law by assigning disciplinary points and thereby illegally retaliating against workers for taking leave. American Airlines later sued New York City challenging the law. The case was ultimately settled in 2021; the airline agreed to pay workers restitution and to comply with the law going forward. The department in 2021 also settled a case involving a Southwest Airlines ground crew worker who was illegally fired for using sick leave; the resolution required reinstatement and payment of restitution. And in 2020, the department settled a case with an American Airlines contractor that staffed wheelchair attendants, customer service representatives, baggage handlers, and cargo agents; the contractor was required to pay more than $100,000 in restitution, and also to credit workers with additional prospective paid sick leave (NYC DCWP 2019b, NYC OM 2021b, 2021d, 2020b).
• In one case involving a law firm that violated the paid sick leave laws, the department obtained a hearing officer decision requiring payment of $172,000 to the worker (NYC DCWP 2019a).
• The Department of Consumer and Worker Protection settled two cases involving domestic workers who were denied paid sick leave (one was fired for using sick leave and for filing a complaint, ultimately losing their housing as a result) (NYC DCWP 2022).
• New York City’s law also requires paid safe leave to be used by those experiencing domestic violence, human trafficking, stalking, or similar offenses; the office in 2020 obtained a $25,000 settlement in its first paid safe leave case (NYC DCWP 2020b).

The Seattle Office of Labor Standards in 2011 recovered (Seattle OLS 2021i) more than $290,000 from a cleaning company for paid sick leave and other violations, including not paying for all hours worked, paying subminimum wages, and making unauthorized deductions from workers’ pay for training and other costs. In 2021, Seattle’s Office of Labor Standards resolved a paid sick and safe leave (Seattle OLS 2021c) involving Compass, a multinational food service company with hundreds of thousands of employees worldwide.

The Labor Standards Enforcement Division of the Minneapolis Department of Civil Rights has brought a number of paid sick leave enforcement cases, including against the national sandwich shop Jimmy John’s (Mahamud 2021) and a local gas station (Minneapolis 2018), as well as a home care business (Du 2021). In that last settlement, the division required the employer to train managers and staff on the relevant law, and to credit all workers with 80 hours of sick leave.

Chicago’s Office of Labor Standards in 2021 reached (Chicago OM 2021) paid sick leave settlements (Channick 2021) with a Burger King franchisee, recovering more than $458,000 in restitution for workers plus $100,000 in city fines, and with global snack food company Mondelēz Global LLC, recovering $476,000 in restitution for workers plus $95,000 in fines.

Wage theft

Some city agencies have authority to enforce municipal minimum wage or other wage-related laws. Wage theft68 cases brought by city enforcement agencies include the following.

Seattle’s Office of Labor Standards has been a national leader in enforcement activities in this area. Cases include:

• a $2 million settlement with a Domino’s franchisee in 2022 based on the employer paying workers below the city’s minimum wage and failing to pay overtime when employees’ work at multiple locations led to workweeks in excess of 40 hours; the case also involved fair scheduling violations (Seattle OLS 2022a)
• a 2022 settlement for more than $250,000 with a national traffic control company that paid below the city’s minimum wage, among other things (Seattle OLS 2022b)
• a finding in 2021 that construction contractors and subcontractors were jointly and individually liable for $2 million in underpayment based on a host of violations, including unauthorized deductions from workers’ paychecks, subminimum wages, uncompensated work time, nonpayment of overtime, and failing to provide paid sick and safe time (Seattle OLS 2021g)
• a 2021 settlement for more than $290,000 with a cleaning company for minimum wage paid sick and safe time violations, and retaliating against workers (Seattle OLS 2021i)
• a 2019 settlement for $182,000 with two Hyatt hotels that were paying a lower minimum wage for small employers instead of the applicable higher wage, and a $686,000 settlement, also in 2019, with a staffing company based on similar violations; the office also reached a $120,000 settlement for underpaid home care providers (Seattle OLS 2019d, 2019c, 2019b)
• after finding wage theft and other violations by two painting contractors, the office provided trainings in 2018 to the industry trade association
• the office also recovered more than $40,000 on behalf of workers with disabilities after the city eliminated a previously existing subminimum wage for such workers
• in one 2018 case involving a restaurant that had retained workers’ tips and failed to provide paid sick time, the employer apologized to employees (Seattle OLS 2018c, 2018d, 2018b)

Other local enforcement actions include a 2018 settlement (Minneapolis 2018) for $20,000 with McDonald’s by the Labor Standards Enforcement Division of the Minneapolis Department of Civil Rights, and a 2021 lawsuit (Chicago Dept. BACP 2021c) by the city of Chicago against DoorDash that focused on other legal issues, but also contained allegations that the company illegally retained workers’ tips.

In addition, Denver Labor reported (Denver OA 2021a) multiple successful enforcement actions in 2021 involving cases under the city’s minimum wage law, contractor minimum wage law, and prevailing wage law. Minimum wage cases included investigations involving a local restaurant, home improvement sales workers, a national retailer, a janitorial company, a fast-food chain, and a hair salon; sample prevailing wage cases involved a custodial contractor at the Denver Zoo, a crane contractor on a federal prevailing wage project, and solar power contractors at Denver International Airport.

COVID-19 pandemic-related enforcement

Seattle’s Office of Labor Standards has brought several actions enforcing the city’s gig worker paid sick and safe time law passed in June 2020. These enforcement actions have resulted in a $3.4 million settlement with Uber (Seattle OLS 2021d), a nearly $1 million settlement (Seattle OLS 2021e) with Postmates, and a $160,000 settlement (Seattle OLS 2021f) with DoorDash, all in 2021. In addition, the office recovered (Seattle OLS 2021j) more than $330,000 for 101 wine and alcohol shop workers who did not receive hazard pay as required by city law, as well as more than $100,000 (Seattle OLS n.d.g) for workers for the gig delivery company Go Puff. Los Angeles County also took enforcement (LA County CBA 2021b) actions against a number of employers based on pandemic-specific workplace protections, including a grocery store that failed to pay “hero pay” (also known as premium pay during the pandemic), and a construction company that terminated a worker for requesting indoor use of face coverings. Pursuant to New York City’s Grocery Worker Retention Act, the city’s Department of Consumer and Worker Protection filed a case (NYC DCWP 2020c) against a Bronx supermarket in 2020 and resolved it several months later (NYC DCWP 2021a) with payment of restitution and reinstatement of most of the discharged workers.

Protections for gig workers and freelancers

The broader issue of classification of workers for app-based driving and delivery companies generally has been playing out at the federal and state, and not local, level. The issue has emerged, for example, in relation to state laws on wages, workers’ compensation, and unemployment insurance (NELP 2019).69 However, there have been some instances of localities challenging misclassification of such workers as independent contractors rather than as employees. In other cases, several cities have created municipal-level wage, paid sick leave, or other protections that apply broadly, including for so-called gig workers, and have taken action to enforce those municipal laws in relation to app-based companies.

In addition to the COVID-19-related cases brought by Seattle described above, other cases include a civil lawsuit (SF ODA 2021) against the cleaning company Handy filed in 2021 by the district attorneys of Los Angeles and San Francisco, as well as a 2021 letter inquiry (Fox, Marchese, and Shimko 2021) regarding Handy’s potential misclassification, sent by the Seattle and Chicago Offices of Labor Standards and the Philadelphia Office of Worker Protections. Also, in 2021, the San Francisco city attorney, San Francisco Office of Labor Standards and Enforcement (OLSE) and a city supervisor announced (SF OCA 2021) a $5.3 million settlement with DoorDash, the largest in the OLSE’s history, after an investigation into allegations of violations of San Francisco’s paid sick leave law and a separate health care security ordinance (SF OLSE 2022), which creates an employer spending requirement to fund health care benefits (health insurance, dental, or vision coverage) for employees in the city. In 2020, OLSE reached a settlement of nearly $750,000 with grocery delivery company Instacart (Said 2020).

In addition, New York City agencies have taken action to enforce the city’s Freelance Isn’t Free Act (NYC DCWP n.d.e), which gives freelance workers (NYC DCA 2018c) the legal right to written contracts, timely payment, and freedom from retaliation. In late 2021, the New York City Law Department and Department of Consumer and Worker Protection announced (NYC OM 2021f) a lawsuit (NY Supreme Court 2021) against French global fashion media company L’Officiel, based on a pattern of failing to pay freelancers on time or at all, including writers, editors, photographers, videographers, graphic designers, and illustrators. According to DCWP, the agency has received 2,024 complaints from freelancers since the law’s inception in 2017, and has helped freelancers recover more than $2.1 million in owed compensation for their work.

Fair scheduling laws

Several cities have fair scheduling or fair workweek laws, which require employers in certain industries (usually retail and/or fast-food) to provide workers with their schedules with advance notice. These laws ensure that workers can plan for child care, elder care, education, second jobs, and other responsibilities, without having the insecurity of unstable and unpredictable schedules. In some cases, fair workweek laws also require employers to offer current part-time workers additional hours before hiring new employees, thereby increasing opportunities for full-time employment.

Seattle’s Office of Labor Standards has resolved a number of investigations under its secure scheduling ordinance, including recovery (Seattle OLS n.d.f) in 2020 of nearly $2 million from Macy’s in a case involving more than 800 workers, and recovery (Seattle OLS 2020a) that same year of more than $600,000 from Fred Meyer’s supermarkets in a case involving approximately 750 workers. In 2019, Seattle resolved a secure scheduling case (Seattle OLS 2019a) involving two franchises operating nine Jack in the Box locations and employing more than 500 workers.

New York City’s fair workweek law applies only to fast-food employers, and the Department of Consumer and Worker Protection has brought a number of actions. Most notably, in 2021, the department sued (Scheiber 2021) fast-food chain Chipotle for extensive and ongoing violations at several dozen stores, alleging that workers are owed $150 million as a result. The 2021 filing followed a prior case (NYC OM 2019a) in 2019. New York City also enforced its fair workweek law in cases involving McDonald’s and Pizza Hut (NYC OM 2021a) locations, the owner of 30 KFC stores (NYC DCA 2018b), and multiple other fast-food employers (NYC DCWP 2020a).

Philadelphia’s fair workweek law covers service, retail, and hospitality workers. A 2021 case involved the resolution (Reyes 2021a) of allegations of violations by a local Target.

Additional cases: Just cause termination rights, health care, and consumer protection

In addition to the broad categories described above, offices also have brought cases under other laws to protect workers and consumers. For example, in 2021, the New York City Department of Consumer and Worker Protection announced (NYC DCWP 2021b) the resolution of its first investigation of a termination of two Subway workers in violation of a new city law (NYC OM 2021e) protecting fast-food workers from being fired without just cause or for a bona fide economic reason. And in a consumer-related case, the department settled charges against (NYC DCA 2017) a large New York City parking garage company that began charging monthly customers an additional “living wage fee” after an increase in the city’s minimum wage under state law. The San Francisco city attorney has worked with the Office of Labor Standards in bringing cases under the city’s health care security ordinance, including a 2019 lawsuit (SF OCA 2019) against a tour bus company, and recovery in 2014 of $1.34 million from a janitorial company (SF OCA 2014).

Funded strategic enforcement partnerships with worker organizations

Some local labor agencies have explicitly and formally included worker organizations in aspects of the labor law enforcement process, by contracting with community organizations to support community partnerships that conduct public education and outreach, and refer violations to the enforcement agencies. Such relationships are sometimes referred to, most commonly by worker advocates, as “co-enforcement.”

This model has long existed at the federal level: The Occupational Safety and Health Administration (OSHA)’s Susan Harwood Training Grant Program since 1978 has awarded grants to nongovernmental entities, including worker organizations, “to provide training and education programs for employers and workers on the recognition, avoidance, and prevention of safety and health hazards in their workplaces and to inform workers of their rights and employers of their responsibilities” under the Occupational Safety and Health Act.

Several local agencies in more recent years have created similar formal, funded partnerships with worker organizations, including unions, worker centers, and community-based organizations. Some of these organizations played a role in advocating for what is now the longest-standing local program of this type, in San Francisco (Patel and Fisk 2017). The city was a forerunner in creating its community partners program was established under a 2006 amendment to the city’s minimum wage law, requiring the Office of Labor Standards Enforcement to create a community-based education and outreach program focused on workers in particular industries (San Francisco 2011).

The Office of Labor Standards in Seattle has a Community Outreach and Education Fund that grants money to community organizations focused on workers who experience high rates of workplace violations, including women, workers of color, immigrants and refugee workers, LGBTQ workers, workers with disabilities, veterans, and youth workers. The most recent round of grants was announced (Seattle OLS 2021k) in December 2021; nearly $3 million in funding will be provided over two years to nine organizations that will provide outreach, education, and support to low-wage workers. The office also has a Business Outreach and Education Fund (Seattle OLS n.d.a), which provides assistance and outreach to small businesses owned by low-income and historically disenfranchised communities, in order to increase their compliance with city labor laws. For the two-year period starting in January 2021, the fund committed $1.1 million to five organizational grantees. In 2021, the office also granted $50,000 to an organization to provide outreach to domestic employers about their obligations.

In 2021, the Chicago Office of Labor Standards announced (Chicago Dept. BACP 2021a) a $100,000 grant, funded in part by the city and in part by the Chicago Foundation for Women, to the nonprofit Arise Chicago. The funding is for outreach and education on city labor laws, with additional activities focused on domestic workers: providing trilingual trainings in developing contracts, and offering template contracts in Spanish, Polish, and English, among other things.

A Minneapolis ordinance requires the development and implementation of “a multilingual and culturally specific outreach and community engagement program to educate employees and employers about their rights and obligations under this chapter…[with] media, trainings and materials accessible to the diversity of employees and employers in the city.”70 Accordingly, the Office of Labor Standards has devoted $300,000 annually to contracting with community organizations for these purposes. The Centro de Trabajadores Unidos en La Lucha (CTUL)(CTUL n.d.) is a grantee and also helps administer the contract; in 2021, CTUL subcontracted also to Awood (a worker center serving the East African community) (Awood n.d.) and the local chapter of Restaurant Opportunities Centers United (ROC-United n.d.; Walsh 2021).

Finally, the Santa Clara County Office of Labor Standards Enforcement also provides funding for education and outreach to community-based organizations providing services to workers and businesses in Santa Clara County (SC OLSE n.d.e, n.d.b, and n.d.a).

Localities have created labor standard requirements and consequences for their government contractors, and for applicants/holders of licenses and permits

A considerable number of businesses interact with localities not just as regulated entities, but also as government contractors or vendors, or as holders of local government-issued permits or licenses. These relationships present opportunities for localities to improve working conditions or drive compliance with worker protection laws. Local governments may have more ability or leverage to positively affect employer conduct in these situations, when businesses are actively seeking approval, funding,71 or a contract from the government.

In relation to contractors or vendors, localities may wish to ensure their contracting funds family-supporting employment, not low-road, underpaid, precarious jobs. They may wish to ensure contractors do not win contracts through a race to the bottom on working conditions. They may also be aware of the practical benefits of contracting with companies that employ highly skilled unionized workers, where turnover and job disruptions may be reduced and product quality may be higher. Or they may wish to ensure their contractors—even if they are not high-road employers—at the very least do not have a history of violating basic workplace and other laws. This report provides a general overview of some options, but localities wishing to achieve these goals should consult more comprehensive and informative resources on this topic (Walter and Madland 2015; Walter, Rowell, and Wall 2020; IIIFFC 2017).

Before approving license/permit applications or renewals, localities may wish to ensure that applicants and license/permit holders are financially responsible, and that they are at least in compliance with the basic applicable workplace statutes.

In relation to contracts, permits, and licenses, localities also may wish to have laws and operations in place to allow termination of such relationships in the event of established and unremedied violations.

Accordingly, localities have passed laws and taken other actions in relation to their contractors, as well as license and permit holders.

Localities have imposed requirements related to public projects or projects seeing public approvals

Localities have imposed prevailing wage and living wage requirements on contractors, passed responsible bidder ordinances, and used project labor and community benefits agreements

Prevailing wage

Prevailing wage laws require covered government contractors to pay a wage and benefit rate based on similarly employed workers in a given geographic region (ILEPI n.d.a; Mahalia 2008). Sometimes ordinances also will require payment of prevailing wages by entities like developers and owners that receive local subsidies or tax abatements. These laws can help make sure that public funds support good jobs, and that bidders do not win government contracts through race-to-the-bottom labor practices. The federal prevailing wage laws (the Davis-Bacon and Service Contract Acts) cover federally funded construction and service contracts. Roughly half of U.S. states (USDOL 2022a) have prevailing wage laws. A number of localities do as well; for example, New York City requires payment of prevailing wage on city-contracted construction projects, to service workers (such as security guards) working for city contractors, and to service workers in residential projects that receive more than $1 million in city financial assistance with 120 or more residential units (Wall, Walter, and Madland 2020; NYC DHPD n.d.). In early 2022, San Diego County passed the “Working Families Ordinance,” which requires contractors for construction projects on county land working on projects of more than $1 million to use skilled, trained workers and pay prevailing wages. It also requires employers on county-leased land to provide paid sick leave. (Brennan 2022). Local prevailing wage laws more commonly cover construction of “public works,” or public buildings, roads, and structures, but they also may be enacted to cover service contracts with the locality as well (Walter, Rowell, and Wall 2020). Studies have found that prevailing wage laws have an overall positive economic impact, and also that costs savings were not realized in jurisdictions where such laws were repealed (Manzo IV 2018). The Center for American Progress in 2020 published a how-to guide with information for states and localities wishing to enact or expand prevailing wage laws within their jurisdictions (Walter, Rowell, and Wall 2020).

Living wage

Living wage laws require employers who receive contracts, tax benefits, or government subsidies from a locality to pay their workers a higher-than-minimum wage (PWF n.d.d; Bernstein 2002). These policies are meant to cover the cost of living, and the wage rates are often calculated based on ensuring that a family would be raised to or above the poverty threshold. Living wage policies in some cases establish different wage levels for employers who provide health insurance and those who do not. A 2011 compilation by the National Employment Law Project (NELP 2011) reported there were more than 120 localities with living wage requirements at that time.

As an example, Boston’s living wage law, enacted in the late 1990s, has as its purpose “to assure that employees of vendors who contract with the City of Boston to provide services earn an hourly wage that is sufficient for a family of four (4) to live at or above the Federal poverty level. This Chapter is also designed to maximize access for low- and moderate-income Bostonians to the jobs that are created, maintained or subsidized through service contracts with the City of Boston.”73 It covers city vendors and beneficiaries of city financial assistance. The law defines financial assistance broadly (Boston n.d.a),74 and covers any employer with at least 25 employees who has been awarded a service contract or subcontract with the city (Boston n.d.a).75 The law contains employee notice and employer reporting requirements, and a mechanism for enforcement, with potential penalties and remedies including fines, restitution, suspension of ongoing contracts and subcontract payments, and ineligibility for future city contracts for three years or until all penalties and restitution have been fully paid (Boston n.d.b).76 Companies bidding or negotiating on a service contract must complete an affidavit regarding the living wage (Boston 2022) prior to the awarding of the contract.

A major shortcoming of Boston’s law is that its formula for calculating the living wage can result in a relatively low dollar amount (the 2022 living wage is $15.87 per hour (Boston OWD n.d.), compared with the state’s 2022 minimum wage (Massachusetts n.d.b) of $14.25.

By contrast, the County of Santa Clara for 2021–2022 has a living wage set at $25.31 per hour (SC OCE n.d.) for employers who do not provide health or retirement benefits; employers who provide such benefits may pay a lower rate ($23.31 per hour with either health or retirement benefits; $21.31 per hour with both). In addition, Santa Clara County’s living wage requires77 provision of up to 12 paid days off to be used either as paid sick leave for the worker or for that worker to care for a family member or designated person.

Some city living wage laws incorporate other kinds of requirements, such as worker retention policies (PWF n.d.e). Hoboken, New Jersey, recently enacted a living wage ordinance for building service workers that includes both a monetary wage component and paid leave requirements.78 The city also passed an ordinance requiring contractors or subcontractors with a service contract in the city to ensure that when there is a change in employer, the successor employer must retain building service workers for 90 days.79 In 2022, the Newark (New Jersey) City Council passed an ordinance (TAPinto Staff 2022) to protect subcontracted janitors, security officers, and door attendants from losing their jobs for 90 days when a contract changes hands through no fault of workers.

Responsible contractor requirements

Numerous local governments have passed laws requiring contractors bidding for public projects (above a certain value) to meet certain “responsible contractor” criteria (ILEPI n.d.b). A responsible bidder ordinance is a policy that sets minimal requirements for all contractors bidding on publicly funded projects in a given political jurisdiction.

Criteria may include, for example, previous compliance with worker protection laws (i.e., laws prohibiting wage theft, misclassification. etc.), appropriate insurance coverage (i.e., for workers’ compensation), participation in a registered apprenticeship training program, and appropriate professional licenses (ILEPI n.d.b). While such requirements are based in commonsense and noncontroversial approaches, they do diverge from the frequently taken approach of awarding contracts to the lowest bidder based solely on price alone (IIIFFC n.d.d).

The Indiana, Illinois, Iowa Foundation for Fair Contracting has developed a Responsible Bidder Toolkit (IIIFFC 2017) providing guidance to municipalities wishing to pass such measures; the organization also compiled a list of nearly 50 responsible contractor ordinances in municipalities within those three states (IIIFFC n.d.a, IIIFFC n.d.b; IIIFFC n.d.c). Other localities are considering such requirements. New Orleans, for example, passed (New Orleans MO 2021) a responsible contractor ordinance after the collapse of the Hard Rock Hotel, which was under construction; three workers died in the accident. New Orleans also specified that the primary contractor would be responsible for any subcontractor violations.

Seattle’s minimum wage ordinance contains a provision disallowing employers from bidding on city contracts if they are the subject of a final order and have not paid all money owed; if an employer has been the subject of a final order twice or more within five years, the contractor cannot bid on city contracts for two years.80 Most of the city’s other labor ordinances contain similar language.

San Diego’s municipal code requires city contractors, during the term of a contract, to “comply with all applicable local, state, and federal laws, including health and safety, labor and employment, and licensing laws, that affect the employees, the worksite or performance of the contract.”81

Minneapolis bars the city from contracting with entities included on a list of companies with outstanding violations of the city’s wage theft law (Minneapolis n.d.c). The city of Omaha, Nebraska, sets contractor rules for contracts greater than $500,000. These rules include a “bid incentive” for contractors to use apprenticeship training programs (allowing them to be competitive while submitting slightly higher bids), and also require proof of workers’ compensation insurance, proper classification of workers as employees, and disclosure of subcontractors; penalties for noncompliance include withholding by the city of any payments still owed to the contractor, as well as a year of being debarred from bidding on contracts if there are two violations (Omaha n.d.).

Toledo, Ohio, has a municipal code that requires payment of prevailing wages for contracts of $10,000 or more, and prohibits awards of such contracts to bidders who have been convicted or found liable under the city’s wage-related law in the previous two years. For construction projects of more than $100,000, city law sets criteria, including continuity and experience of the workforce, local hiring, whether there is an apprenticeship program, and whether the employer provides benefits (health insurance and retirement or pension plan), as well as the bidder’s record of compliance with tax, wage and hour, and unemployment laws (Toledo n.d.b).

Other cities that disqualify contractors with a history of wage theft and other labor standards violations from winning city contracts include Cincinnati (Hussein and Coolidge 2016); Columbus, Ohio (Columbus n.d.a, n.d.b); Coralville, Iowa (Zaluska 2021); El Paso, Texas; and Houston.

In 2021, New York City amended its law to include a requirement, currently being challenged in litigation, that human services contractors and subcontractors must agree to labor peace agreements as a condition to being able to win or renew a city service contract with city agencies. Among other things, they must file an attestation that the employer has entered into a labor peace agreement with a labor union, or that no union has sought to represent their workers, and if a union seeks to represent their employees during a contract, they must enter a labor peace agreement within a set period of time (NYC n.d.a).82

Local and targeted hiring policies

Local and targeting hiring programs require or incentivize businesses that receive public dollars to hire workers from the local community, or from targeted populations in the community. Local hiring creates hiring preferences for people who live in a specific geographic area, which can be as large as an entire city or county, or as small as specific zip codes or neighborhoods. Targeted hiring refers to hiring preferences based on a range of worker characteristics, such as veteran status, gender, race or ethnicity (where allowed), residency in a low-income neighborhood, having been formerly incarcerated, having a disability, or being long-term unemployed (Gross and PolicyLink 2019). Local and targeted hiring policies can be implemented by ordinance, as part of responsible contractor standards, or negotiated as part of project labor agreements or community benefits agreements (UCLA Labor Center 2014). Baltimore’s local hire law, for example, requires compliance by vendors, contractors, and subcontractors who do business with the city, and is applicable to city-awarded contracts of more than $300,000, and city-subsidized projects of more than $5 million. The law requires businesses and all of their subcontractors to post new jobs with the mayor’s Office of Economic Development exclusively for a period of seven days, that 51% of all new hires are Baltimore residents, and for businesses and subcontractors to submit monthly reports (Baltimore OED n.d.).

Project labor and community benefits agreements

Project labor agreements (PLAs) are used primarily in the construction industry to establish the terms of employment for all workers on a project. Generally, PLAs specify workers’ wages and benefits, and may include provisions requiring contractors to hire workers through union hiring halls, otherwise establish a unionized workforce, or develop procedures for resolving employment disputes. PLA terms often also prevent workers from striking, and employers from locking workers out, during the project (Mangundayao, McNicholas, and Poydock 2022). PLAs can help eliminate costly delays caused by labor conflicts or shortages of skilled workers. While many states have policies that promote PLA use in state-funded projects, some states restrict or disallow them (Brubeck 2018; FC and SLC 2018; Von Wilpert 2017). Local governments such as those in Boston, Los Angeles, and New York City have successfully used PLAs for years; more localities could use PLAs on major projects.

Community benefits agreements are made between developers of a commercial and/or residential project and representatives of community groups where the project is being developed (PWF n.d.a). Communities can stipulate certain requirements for the projects, such as hiring from the local community, or guaranteed financial or social benefit from the project; in return, the developer receives the community’s support for the project (Island Institute 2021). Major development often occurs on city land, receives public funding or tax breaks that can accrue value to the developer, and in almost all cases require land use approvals that require the support of local government officials (PWF and LP 2019). Consequently, local governments are sometimes parties to community benefits agreements directly, may have a separate agreement with developers that is also part of negotiations, or may otherwise leverage their land use or funding powers as a part of these community benefits agreement negotiations.

Some examples of community benefits and labor peace agreements are as follows:

• In 2012, a community coalition and the city of Oakland negotiated a community benefits agreement that included requirements for local and targeted hire, living wages, fair chance hiring, limitations on the use of temporary workers, and community oversight and enforcement (PWF n.d.c).
• In 2018, the city of Nashville supported a community coalition in winning a community benefits agreement that included requirements for local hire, a $15.50/hour minimum wage, mandatory worker safety training for construction workers and supervisors, and workforce development (Porterfield 2021).
• A 2008 community benefits agreement regarding the development of the Bayview-Hunters Point neighborhood of San Francisco included a labor peace agreement in key industries related to the project (PWF n.d.c).
• Pittsburgh also has an ordinance from 1999 that requires hotel contractors and employers to sign labor peace agreements when city financing has been involved in the development of the hotel (Pittsburgh 1999).

Some localities created compliance requirements to obtain, retain, or renew permits or licenses; however, limited enforcement lessens deterrence

The licensing and permitting process can be used to drive improved labor standards and conditions; accordingly, some localities have incorporated labor-related requirements into these processes (Madland and Rowell 2017). This can take the form of requiring disclosures or evidence of compliance as part of the application or renewal process, or imposing potential permitting or licensing consequences in the event of certain established violations.

One caveat regarding the numerous laws that have been passed in this area: lack of media reports suggests very limited exercise of these powers by localities that have passed them. As with any law, the effectiveness of these provisions depends in large part on enforcement. Economists have observed that “employers will not comply with the law if the expected penalties are small either because it is easy to escape detection or because assessed penalties are small” (Ashenfelter and Smith 1979). Licensing and permitting consequences change both parts of the equation—the ease of escaping detection, and the scale of the assessed penalties. In addition, as discussed in Section 9 below, media coverage of these consequences would likely significantly drive deterrence.

Localities face several challenges in operationalizing these requirements. First, there is the need for at least some dedicated staff time on the local level to make the program work. There is also the logistical challenge of ensuring that local licensing or permitting agencies learn about serious violations, which will require proactive outreach and research. In addition, unless they are given very clear direction or mandates from the ordinance and/or from their chain of command, licensing or permitting agencies may be reluctant or resistant to imposing consequences based on workplace violations (even those that are proven and unremedied), seeing these issues as outside of their substantive purview.

There also may be concerns about revocation of a license or permit possibly leaving workers out of jobs. However, licensing and permitting provisions generally provide ample opportunities to cure, as well as a range of consequences—not only the most severe—including a period of temporary suspension for a license or permit, or a probationary period. In addition, the existence of licensing or permitting consequences could permit an agency to reach a negotiated settlement with terms to ensure future compliance, such as requiring an employer to engage an independent monitor. Such negotiated settlements or less punitive measures could in many cases be preferential to revocation.

In addition, it is likely that even one or two well-selected, well-publicized uses of these powers would achieve much of the desired deterrence in a given industry or neighborhood. Further, the limited available examples suggest that these consequences work: as described below, the Santa Clara County Office of Labor Standards Enforcement has operationalized food permit consequences for restaurants with unpaid wage-related determinations from the state labor commissioner. In response, almost all employers involved have paid what they owed in order to avoid further consequences.

In short, this tool appears to be underutilized despite its apparent untapped potential in terms of deterring violations. Localities without these laws might consider passing them, along with required annual reports on activities. Localities with such laws might wish to systematically enforce them through leveraging the license application and renewal process, and through scheduled routine checks with local, state, and federal labor enforcers, and routine searches of court filings.

Sample legislative language

Even without language specifically addressing wage theft or other labor conditions, licensing or permitting laws may contain general language with catch-all provisions that may be used for the purposes of ensuring licensees or permit holders comply with workplace laws. The Minneapolis Code (Minneapolis n.d.d) section on business license holders provides several examples of this:

• It requires license holders to“maintain and operate the business in compliance with all applicable laws and ordinances, including the zoning, fire, environmental health, environmental management, license, food, liquor, housing and building codes” (emphasis added).83 The “all applicable laws and ordinances” provides a basis for taking adverse action against a licensee based on proven violations of wage or other workplace laws.
• It requires license holders to “pay all delinquent court judgments arising out of their business and business operations.”84 This provision could provide a basis for adverse action in a situation where a judgment related to wage, discrimination, or other workplace violations remains unsatisfied.
• Finally, the code states, “The provisions of this section are not exclusive. Adverse license action, inclusive of, but not limited to, revocation, may be based upon good cause at any time upon proper notice and hearing. This section shall not preclude the enforcement of any other provisions of this Code or state and federal laws and regulations.”85 This broad “good cause” language again provides an opening for action based on workplace practices, such as persistent ongoing violations or egregious infractions.

In addition to potential use of this type of general language, some city laws specifically reference working conditions and labor violations in relation to issuance or revocation of permits and licenses.

For example, Philadelphia’s city code allows the city to “deny, suspend, or revoke any license or permit issued or pending” for a period of up to one year if the applicant or licensee was found guilty, liable, or responsible for violating the city’s anti-wage theft ordinance. In addition, all applicants for a commercial or business license must certify that they have not been found guilty, liable, or responsible for violating wage theft laws within the past three years (Philadelphia n.d.b). Similarly, Jersey City, New Jersey’s wage theft prevention law prohibits issuance or renewal of a license or permit to an applicant or entity that has been found liable for wage theft and has not come into compliance within 90 days of any final judgment. It also requires disclosure of wage theft cases within the two years prior to license or permit application, and requires the city to make an annual request to the state labor department for any wage claims (and associated documents) filed against licensees in the past two years (Jersey City n.d.).

Permits

Some localities have used the permitting process to drive labor compliance. Prior to issuance of a permit for construction of a building above a threshold size, the city of Milpitas, California, requires applicants to sign a form (Milpitas n.d.) acknowledging responsibility for complying with certain state and local labor laws. They must also sign a form certifying compliance before a certificate of occupancy will be issued for the project (Milpitas n.d.). For issuance of a special construction permit under the Quincy, Massachusetts, city code, all levels of entities involved in the project (construction manager, lead contractor, contractor, subcontractor, etc.) must comply with wage payment-related laws; if not, the city’s measures to achieve compliance include issuance of a stop-work order until there is compliance.86

Michigan City, Indiana, creates requirements for issuance of building permits for construction projects of more than $250,000, including that in the past three years, the contractor must not have been barred from bidding on public work because of, or been found to have committed, legal violations pertaining to wages, taxes, workers’ compensation, or misclassification. It also requires contractors who receive permits to comply with these laws as well, and requires the property owner applying for a building permit to use their best efforts to require all contractors to comply with these obligations. The law contains serious potential consequences, including suspension of the permit (requiring stoppage of work), or even revocation (Indiana n.d.).

The Better Builder Program in Austin, Texas, uses a carrot instead of a stick. The program, in partnership with the Workers Defense Project (WDP n.d.), provides an innovative example of creating permit-related incentives for employers willing to commit to higher labor standards. In the program, construction companies willing to ensure certain protections for construction workers on commercial projects may receive expedited handling of their permits (Austin n.d., Hasan 2017; Anderson 2017).

Licenses

A number of localities incorporate wage theft and labor compliance into their business licensing laws and practices. For example, the city of Toledo prohibits issuance of a license to any applicant who has found liable or been convicted pursuant to the city’s anti-wage theft laws or any other wage-related provisions of local, state, or federal law within the previous two years.87 The Seattle municipal code empowers the Department of Finance and Administrative Services to deny, refuse to renew, or revoke an employer’s business license, if requested to do so by the Office of Labor Standards as a result of an unsatisfied settlement or order.88

In Boston, a 2017 executive order allows the city’s licensing board to take into consideration whether a licensee has been found to have violated state or federal wage laws in determining whether to reissue, modify, suspend, or revoke a license (Boston MO 2017). A number of localities in Massachusetts have similar provisions. In Northampton, the License Commission has authority over issuance and administration of licenses for a range of types of businesses: service and sale of alcoholic beverages; operation of restaurants, hotels, inns, and lodging houses; indoor and outdoor entertainment for licensed and nonlicensed premises; car dealers; and more. When issuing a new license or a renewal, the License Commission requires completion of a Fair Wage Compliance Certificate (NLC n.d.), attesting that the business is not subject to a judgment or final determination resulting from a violation of state or federal wage protection laws. If they do not certify as such, they may be required to provide a wage bond for the time period covered by the license (Northampton n.d.). The media reported on a case in which this wage bond requirement could potentially be triggered, based on citations issued by the Massachusetts attorney general’s office (Fieldman 2021).

The Santa Clara County (California) Office of Labor Standards Enforcement is an agency that has begun to meaningfully operationalize permitting consequences for violators of labor standards laws. Data from the California Division of Labor Standards Enforcement showed that Santa Clara County workers filed the highest number of wage theft claims in the state: over a nearly five-year period, retail food vendors were found to owe nearly $5 million in back wages, an estimated $2,900 per employee. In addition, worker advocates reported on (Gleeson, Taube, and Noss 2014) the high incidence of wage theft and highlighted potential responses by local government. Accordingly, the county established a food permit enforcement program (SC OLSE n.d.d) to encourage payment of existing judgments by conditioning the issuance, renewal, or retention of food facility permits on compliance with labor standards.

If a retail food vendor is determined to be in violation of a judgment for nonpayment, the county may elect to temporarily suspend or revoke the vendor’s food health permit. The program, which is being rolled out gradually to all zip codes in the county, contains graduated measures to encourage payment of outstanding wages: the county sends three notices (a notice of outstanding judgment, notice to comply, and notice of violation, with 15 days to respond to each), and ultimately, continued nonresponsiveness or noncompliance will lead to a food permit suspension of at least five days (with notice provided to the public regarding the reason for the suspension). The county created a flow chart to explain the process, contained in Figure A. One noteworthy aspect of this process that may increase its likelihood of success and effectiveness is its focus on only one industry (restaurants), and its gradual rollout plan, based on zip codes. This kind of approach—targeting a problem industry and gradual implementation—could readily be replicated elsewhere. The county also added ongoing wage theft violation information to its “SCCDineOut” app, which allows county diners to view restaurants’ food safety records on their smartphones (Ochavillo 2019).

Figure A

Retail food vendors may have food health permit suspended or revoked for noncompliance. In addition, in 2010, the San Francisco Department of Public Health, recognizing the socioeconomic determinants of health and the poor health outcomes resulting from labor violations, incorporated certain labor elements into its restaurant permit review process, including requiring proof of workers’ compensation insurance by all applicants, as well as successfully leveraging the permitting process in relation to unremedied serious labor violations by several employers (Bhatia et al. 2013).

Localities can support workers through exercise of public leadership: education and outreach, issuing reports, holding hearings, and general advocacy

Localities have leveraged their soft powers to support workers’ rights and organizing. Local agencies devoted to protecting workers’ rights have used a range of tools to educate workers about their rights, inform employers about their obligations, and share information with the broader community about issues affecting workers. They have issued reports, conducted extensive public education and outreach, made materials available on their websites, garnered media coverage, and more. Localities without dedicated labor agencies can also use these soft powers to promote public and worker education. Moreover, local elected officials—whether individually or collectively alongside other officials and community labor groups—can use their public platforms and convening authority to provide public education and support workers, including those who are actively forming and joining unions.

Strategic communications, including use of media, is particularly important in educating workers about their rights and deterring violations. Media coverage increases employers’ knowledge about their legal obligations; it also increases their perceptions about the likelihood and cost of detection of violations. A recent study showed that press releases about OSHA enforcement of workplace safety violations deterred other workplace safety violations, an effect likely applicable to other labor standards laws as well (Johnson 2020). In addition, many workers, especially low-wage workers, have limited knowledge about the laws that affect them (Rankin and Lew 2018; Miller and Tankersley 2020). There are numerous communications tools that localities can use to reach the public (Gerstein and Goldman 2020).

Many local labor agencies have issued reports on worker issues or on their activities supporting workers

Several local agencies have issued regular reports on their activities or on the state of workers’ rights within their jurisdiction. Annual reports generally provide a comprehensive overview of an office’s work. In some jurisdictions, such as Chicago, Duluth, and St. Paul, annual reports are required by statute, a beneficial requirement that ensures transparency and continued focus on the labor offices’ work (Chicago n.d.c; Duluth n.d.; St. Paul n.d.c). In other jurisdictions, such as New York and Seattle, there are not annual report requirements per se, but other mandates for regular report-backs; Seattle’s ordinance requires an annual report regarding required funding for the Office of Labor Standards (Seattle n.d.a) (which necessarily requires an accounting of the past year’s activities), and individual laws in New York City have their own specific reporting requirements (NYC n.d.b).

Here’s a look at some local reports:

• The Chicago Office of Labor Standards issued annual reports covering its activities in 2019 (Chicago OLS 2019), 2020 (Chicago OLS 2020), and 2021 (Chicago OLS n.d.).
• The Denver auditor issues an annual report (Denver OA 2021a), and the 2021 version has a section (Denver OA 2021b) on wage-related enforcement.
• The city of Los Angeles issued a milestone report (LA City OWS 2022) in January 2022, detailing its activities and accomplishments since 2016.
• The Minneapolis Labor Standards Enforcement Division has a running dashboard (Minneapolis n.d.a) on its website, with data about the division’s activities, and issues an annual report (Minneapolis 2020).
• St. Paul includes labor enforcement data in the annual report (St. Paul 2020) of the Department of Human Rights and Equal Opportunity.
• The New York City Department of Consumer and Worker Protection has issued annual reports (NYC n.d.d) on the state of workers’ rights since 2017. The department in 2018 issued a report (NYC 2018) specifically on paid care workers.
• The Philadelphia Department of Labor issued annual labor policy and compliance reports (Philadelphia OLS & OWP n.d.) in 2019, 2020, and 2021. In addition, the department issued a report (Cox 2020) in 2020 on the Philadelphia Worker Relief Fund, which provided foundation and city-funded cash assistance to workers excluded from unemployment insurance and pandemic-related stimulus, through distributions via 14 community-based organizations.
• The San Francisco Office of Labor Standards has issued three annual reports (SF OLSE n.d.a).
• The Santa Clara County Office of Labor Standards Enforcement has issued several reports, including an annual report (SC OLSE 2020) in 2020.
• The Seattle Office of Labor Standards has an extremely detailed interactive dashboard (Seattle OLS n.d.b).

Local labor agencies have launched campaigns to educate communities about workers’ rights

Many local labor offices are extremely active in reaching out to the public and educating workers about their rights as workers. The New York City Department of Consumer and Worker Protection has engaged in a number of targeted campaigns, including educating the public about the city’s paid sick leave law when it first took effect, introducing the agency’s new name (NYC 2019c) to include the word “worker,” and reaching out to nail salon workers (NYC 2019b). During the early months of the COVID-19 pandemic, the department set up a hot line (NYC 2020a) for workers with questions about the city’s reopening.

The Minneapolis Labor Standards Enforcement Division held a workshop to help employers plan for a minimum wage increase, (Minneapolis 2018), as well as a workshop on paid sick and safe time for immigrant-owned small businesses (Minneapolis 2017). The Philadelphia Department of Labor has extensive know-your-rights resources on its web page (Philadelphia DOL n.d.), including access to a video (Philadelphia 2021a) about city worker protections during the COVID-19 pandemic.

The Chicago Office of Labor Standards and Denver Labor are both relatively new offices that have taken considerable action to educate the public in their cities. In Chicago, the Department of Business Affairs and Consumer Protection, within which the Office of Labor Standards is located, has its own YouTube channel, and the Office of Labor Standards has posted numerous webinars there on a wide range of labor-related topics (Chicago Dept. BACP n.d.; Chicago n.d.b). The office also created a “Your Home is Someone’s Workplace” campaign focused on domestic workers, and has a web page specifically focused on this workforce, as shown in Figure B (Chicago n.d.a). 

Figure B

The Chicago Office of Labor Standards also engaged in an outreach campaign about a new law giving domestic workers the right to a written contract from their employer (Chicago n.d.a; Chicago Dept. BACP 2021b). Some outreach took place in conjunction with the nonprofit worker organization Arise Chicago, which provided trilingual (English, Spanish, and Polish) sample contracts for employers’ use (Arise Chicago n.d.).

Los Angeles County announced a similar “Your Home is Someone’s Workplace” campaign to educate employers about domestic workers’ rights, and the Philadelphia Labor Department conducted a fair workweek survey in English and Spanish (LA County CBA 2021a; Chewning 2021b, 2021a).

Denver Labor has an extensive outreach and public education function. The office holds “Wages Wednesday” live on Wednesdays on the Denver Labor Facebook page, including programs in English and Spanish (Denver 2022b, n.d.a). The office held nearly 50 live Facebook trainings in 2021, and had bilingual (English and Spanish) staff available to answer questions (Denver OA n.d.a). The office web page highlights restitution stories, and contains online resources for small businesses about compliance (Denver n.d.b, n.d.c). It also contains tools for workers and employers: a regional address finder to assess whether work performed was in the relevant local boundaries, and a minimum wage and tip calculator, among other things. Also, the office launched an “Earned It, Deserved It” campaign to raise awareness of the city’s minimum wage ordinance, with bilingual ads at regional bus stops, and on radio, television, and social media platforms (Denver OA 2021a, p. 16).

Local labor agencies have highlighted worker issues in their jurisdictions through advocacy, hearings, and convenings

Several city labor agencies have gotten involved in various worker advocacy efforts.

In 2021, officials from several local enforcement agencies, including Chicago, New York City, Philadelphia, Seattle, and the district attorneys of Suffolk County, Massachusetts, and Washtenaw County, Michigan, all signed a joint letter (NYC DCWP 2021), along with 11 state attorneys general, to the U.S. Department of Homeland Security (DHS) supporting the agency’s plan to change its approach to worksite enforcement to support labor rights, and recommending changes to DHS policies and practices to facilitate the ability of state and local labor officials to enforce workplace laws. The letter was in response to a recent DHS memorandum (USDHS 2021) to Immigration and Customs Enforcement (ICE), Customs and Border Protection (CBP), and U.S. Citizenship and Immigration Services (USCIS), directing them to adopt practices and policies to deliver more severe consequences to exploitative employers, and increase workers’ willingness to report violations of worker protection laws.

In March 2020, agency officials in four cities (Chicago, New York, Philadelphia, and Seattle) called on (NYC 2020b) FedEx, UPS, and XPO to improve their policies in response to the then-new pandemic, particularly in relation to paid sick leave. Also in 2020, four localities (Chicago, New York, Philadelphia, and Pittsburgh) joined (NY AG 2020) a coalition of 24 state attorneys general in submitting a comment letter (NY AG et al. 2020) to the U.S. Department of Labor opposing a proposed regulation that would make it easier for employers to classify workers as independent contractors instead of as employees.

Finally, the New York City Department of Consumer and Worker Protection has held a number of hearings and convenings. For example, in 2017, it held a public hearing (NYC 2017) on the state of workers’ rights in the city, along with the Mayor’s Office of Immigrant Affairs and the New York City Commission on Human Rights, and in 2019, the same three agencies, along with partner organizations, held a convening (NYC 2019a) focused on immigrant workers.

Making know-your-rights resources, labor law posters, and other materials widely available, including in multiple languages

Some local agencies have been particularly aware of the need to reach the broad range of workers within their jurisdictions, and have translated materials into multiple languages. Cities and counties operate on the ground serving diverse communities, and may sometimes be more attentive to language access concerns than agencies at other levels of government.

The New York City Department of Consumer and Worker Protection has produced workers’ bill of rights booklets in 15 languages and audio files in five indigenous languages (Garifuna, K’iche, Kichwa, Mixteco, and Nahuatl), as well as an animated video. The animated video and audio files also enhance access for people with varying literacy levels. The Philadelphia Department of Labor web page (Philadelphia DOL n.d.) contains workers’ rights resources in 12 languages. Los Angeles City has minimum wage and paid sick leave posters available in 13 languages (LA City OWS n.d.a). Santa Clara County’s Office of Labor Standards’ web page provides information (SC OLSE n.d.f) in five languages. Even smaller jurisdictions, like Emeryville, California, with a 2020 population (U.S. Census Bureau 2022e) of less than 13,000, offers minimum wage and paid sick leave notices and posters (Emeryville n.d.) in six languages.

Local labor agencies have generated media coverage about worker issues

In addition to issuing press releases and reports, some offices have been effective in helping to catalyze coverage of workers’ rights issues in the local press. The Philadelphia Department of Labor has been especially effective in this regard, helping place news stories about workers’ rights under the city’s fair workweek law when it was first enacted, about its issuance of an annual report that would shame employers with records of violations, and about the Philadelphia Worker Relief Fund for workers excluded from other public assistance during the pandemic (Dorfman 2021; Reyes 2021b, 2020; Marin 2020).

The Santa Clara County Office of Labor Standards received coverage (Reese 2021) on a county contracts enforcement pilot program, in which the office reviews judgments and orders from state and federal labor authorities to determine whether a contractor should be disqualified from working with the county. The office also received coverage (Telemundo n.d.) on Telemundo about its enforcement program related to county food permits.

Finally, workers themselves can catalyze coverage of enforcement actions by local labor enforcement agencies, as when a worker whose case was handled by the San Francisco Office of Labor Standards gave a TEDx Talk (Winner 2019) and was featured in a PBS NewsHour program (Nawaz and Carlson 2021) about the city’s fair chance ordinance, which requires employers to consider mitigating circumstances and rehabilitation evidence for job applicants with a criminal record.

Local elected officials have used their public platforms and convening authority to support workers

Local elected officials have used their public platforms to demonstrate their support for working people in many ways. Such officials have shown up at rallies, events, and actions (including strikes (Aponte 2021) and walking workers back to work after days of action). Local elected officials have also written opinion pieces (op-eds) in support of worker advocacy and to bring attention to harms and challenges experienced by workers (Rosenthal 2021), and have written and signed letters to employers expressing concerns about worker treatment. Moreover, local elected officials can hold hearings, which allow workers an opportunity to share about their experiences and for officials to ask employers relevant questions.

Local elected officials can also show support for ongoing worker organizing campaigns. For example, in 2022, New York City Comptroller Brad Lander, as a public pension fund trustee, led a shareholder effort to address high injury rates and turnover at Amazon warehouses (Newman 2022). Also in 2022, the Seattle and Philadelphia city councils both passed resolutions supporting Starbucks workers seeking to unionize (Taylor 2022b; Valentine 2022). A Local Progress website provides additional ideas and resources for local elected officials wishing to show support for the Starbucks worker organizing campaign (Local Progress, n.d.b.).  

Conclusion: Localities throughout the country can adopt supporting workers’ rights as among the core functions they perform for their communities

There is a wealth of possibilities for localities that wish to get involved in expanding and enforcing workers’ rights. While some recent local action emerged in response to the Trump administration’s hostility to workers’ interests, much of cities’ work in this area pre-dated 2016. Accordingly, the local role in protecting working people continues to be relevant and critically important, even in the context of a worker-friendly federal administration.

Localities have been key innovators on labor matters, piloting new laws on such issues as paid sick leave and fair workweek; with proof of concept at the local level, such laws are later adopted at the state level (and perhaps eventually at the federal level as well). Creation of worker boards, strategic community enforcement partnerships, and using permits to drive compliance are also local innovations that help move the field forward. In addition, expansion and robust enforcement of workers’ rights at the local level serves as a hedge in our federal system, helping ensure at least some continued protection of workers in times when federal or state government is unfriendly to workers or insufficiently effective in protecting them. Moreover, public enforcement of workers’ rights is of even greater urgency when skyrocketing use of forced arbitration blocks workers from bringing their cases in court.

Localities in states without preemption of local laws may undertake any and all of the actions described above. However, even localities facing serious legal, political, or financial constraints in relation to their involvement in worker issues still can take action that will have a meaningful impact on workers’ lives.

Specifically, even in states with preemption:

• Localities can offer high-road standards to their own workforces, including enabling or facilitating collective bargaining where permitted, as well as sufficient minimum wage and paid sick/family leave for municipal employees.
• Localities can consider enacting laws that may not be preempted, such as those that do not set labor standards. These might include anti-wage theft ordinances that do not set a local minimum wage, but simply enforce existing rates; responsible bidder ordinances; ordinances concerning licensing or permitting consequences or incentives; or laws on salary transparency, for example. Local leaders can examine their state’s preemption law to assess the realistic possibilities.
• Localities can assess whether there is authority to require increased labor standards at the local airport.
• Localities can establish a worker advisory board to create a vehicle for open lines of communication and opportunities for worker leaders to raise newly emerging issues that the locality may be able to help address.
• Localities can establish a dedicated labor office or at the very least, a dedicated labor liaison at the local level. Even in a state with strong preemption, such an office could likely do some or all of the following:
  • Conduct outreach and public education on workers’ rights. Create a workers’ rights landing page on the locality website (in languages commonly used in the locality), with information about federal, state, and local workers’ rights applicable within the jurisdiction, (however expansive or limited they may be), as well as hyperlinks to relevant government agencies and other worker-oriented resources. Conduct outreach and include basic workers’ rights information in community outreach by existing local officials (such as by Fair Employment Practices Agencies, where they exist).
  • Review contracting, licensing, permitting standards, especially in industries with high rates of violation. Consider whether new laws are needed in order to impose compliance prerequisites or consequences for violations of labor laws. If so, try to enact them. In either case, routinely review labor compliance records of recipients of local government contracts, permits, or licenses, and consider whether action can be taken by contracting, licensing, or permitting agencies.
  • Review forms used for contracting, permitting, and licensing. Incorporate workplace law information about employer responsibilities on application forms and require signed certification by bidders or applicants that they will comply with these laws.
  • Research working conditions within the locality (possibly in conjunction with local or state academics), and issue and publicize reports on findings
  • Hold convenings or hearings to uncover and highlight problems facing workers, and to generate media coverage of these issues.
  • Create a comprehensive complaint form for workers and become a one-stop shop for reporting violations, serving as a gateway to help workers navigate other agencies and resources.
  • Publish enforcement data and stories to demonstrate effectiveness and deter violations.
  • Enlist and/or organize local resources, such as law school clinics or the local bar, to address worker issues. For example, the Massachusetts attorney general’s office holds a monthly wage theft clinic for cases it cannot handle, with nonprofit organizations, pro bono lawyers, legal services offices, lawyers who can take contingency cases, etc. (Massachusetts n.d.a). Along similar lines but addressing a problem unrelated to labor, the California Attorney General’s office in 2015 convened a roundtable of law firms and immigrants’ rights advocates about the legal needs of unaccompanied minors fleeing Central America; these efforts led to the legal representation of more children in immigration cases (CA DOJ 2015).

Localities in states without preemption, in locales more friendly to workers’ rights, can consider enacting any and all of the above measures. In addition, they have even more leeway to act, since they can:

• enact higher labor standards for all workers within their jurisdiction
  • minimum wage, overtime, paid sick and safe leave, fair workweek, expansive anti-discrimination laws, strong anti-retaliation protections
  • protections needed in particular industries: domestic workers, hotel, retail, fast-food, car wash workers, freelancers, etc.
  • cutting-edge worker protections such as just cause termination, gig worker pay or termination standards, salary transparency, and more
• meet with local worker organizations to learn what issues they identify as pressing
• create, fund, and empower a robust local office of labor standards with
  • enforcement power, including subpoena power
  • the ability to inform the administration and legislators on policy matters
  • a strategic enforcement approach
  • a funded community partnership model
• enact and enforce job quality standards (prevailing wage, living wage) and responsible bidder ordinances for local government contractors
• enact and fully operationalize workplace law compliance prerequisites and consequences for applicants and holders of locally issued permits and licenses.

In all localities—those in states hostile to workers, friendly to workers, and in between—there are opportunities to stand up for working people and take action.

Acknowledgments

The authors would like to thank Daniel Perez and Katherine DeCourcy, who provided excellent research assistance.

About the authors

Terri Gerstein is the director of the State and Local Enforcement Project at the Harvard Law School Labor and Worklife Program and a senior fellow at the Economic Policy Institute. She was recently an Open Society Foundations Leadership in Government Fellow. Previously, Terri was the labor bureau chief in the New York State Attorney General’s Office and a deputy commissioner in the New York State Department of Labor. Before her government service, Gerstein was a nonprofit lawyer in Miami, Florida, where she represented immigrant workers and co-hosted a Spanish language radio show on workers’ rights. She was a law clerk for Judge Mary Johnson Lowe of the U.S. District Court for the Southern District of New York. Her writing on workers’ rights issues has appeared in numerous outlets, including the New York Times, Washington Post, NBC News Think, The American Prospect, Politico, Slate, The Nation, and more; a complete listing is available at www.terrigerstein.com. She is a graduate of Harvard College and Harvard Law School.

LiJia Gong is the policy and legal director at Local Progress. She leads the development of Local Progress’ policy and research capacity to support members, and drives the development and growth of national program areas. Gong is an attorney with more than a decade of experience in policy, litigation, and political strategy. Prior to joining Local Progress, she served as counsel at Public Rights Project, an organization that empowers local and state governments to advance civil rights, worker and consumer rights, and environmental justice. At Public Rights Project, she launched a partnership with Local Solutions Support Center to fight abusive state preemption of local policymaking. Gong worked on the 2018 campaign to re-elect Sen. Elizabeth Warren of Massachusetts and served as a law clerk for Judge Kiyo Matsumoto of the U.S. District Court for the Eastern District of New York. Prior to becoming a lawyer, Gong worked as a research assistant at the Federal Reserve Board of Governors. LiJia earned her J.D. from Georgetown University Law Center and her B.S.F.S. from Georgetown University.

Endnotes

1. New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J, dissenting).

2. New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).

3. This report uses the terms “localities” and “local governments” as an umbrella term for political subdivisions of a state that include, for example, counties, cities, townships, villages, and school districts. Local government decision-making structures and authorities vary significantly–in some localities the executive has far more authority than the legislative body (often referred to as “strong mayor” systems as applied to cities), while in some localities significant control rests with appointed offices like a city manager. Localities also vary tremendously in terms of size–some towns have only a few hundred or thousand residents, whereas Los Angeles County has more than 10 million residents. Accordingly, the capacity for policymaking and enforcement among localities also varies greatly. Due to this diversity across localities, this report uses “localities” and “local governments” generally to refer to powers that may belong to the local executive, legislature, administrative agencies, or some combination thereof in a given jurisdiction.

4. Diller argues that cities’ smaller scale, concentrated political preferences, and streamlined lawmaking processes facilitate public health innovation.

5. Many localities have longstanding agencies that enforce human rights, civil rights, or other anti-discrimination laws; this report touches on the work of such agencies, but they are not the focus. 

6. Because in its employment-related lawmaking and enforcement, Washington, D.C., operates more akin to a state than a city, it is not included in this report. For more information for enforcement actions taken by D.C.’s attorney general, please see Gerstein 2020.

7. The federal government sets the federal minimum wage; that rate serves as a national floor. Under the federal minimum wage law, the Fair Labor Standards Act, states and localities may pass minimum wages that are higher. Many, but not all states, also allow localities to require pay higher than the state minimum wage.

8. The advocacy group “A Better Balance” has an option on its website that enables filtered searches of enforcement agencies handling paid sick day enforcement (A Better Balance n.d.b). Several localities assign this function to their offices of community relations or of human rights (Boulder 2022; Montgomery n.d.; Pinellas OHR). In Duluth, Minnesota, the city clerk has authority to enforce the law (Duluth 2022b). In Miami-Dade County, a consumer mediation center handles wage disputes (Miami-Dade WTP). This list is illustrative but not exhaustive.

9. UC Berkeley 2022; Boston OWD n.d.; Chicago OLS 2022; Denver 2022a; Duluth 2022a; Emeryville 2022; Flagstaff 2022; LA City OWS n.d.a; LA City BCA n.d.; Minneapolis n.d.b; NYC OLPS n.d.b; Philadelphia n.d.a; SF OLSE n.d.c; Santa Clara n.d.a; SJ 2022; Seattle OLS n.d.d; St. Paul n.d.b; Tacoma n.d.

10. Brennan 2021; San Diego 2022.

11. Kelty 2022; Ludden 2021.

12. Miami-Dade WTP n.d.; Pinellas OHR n.d.; Broward OPSHR n.d.; Broward OIAPS 2022.

13. In re: Palm Beach County Wage Dispute Docket and Creation of “WD” Division, Administrative Order No. 3.907-3/15, March 9, 2015. Fifteenth Judicial Circuit Court in and for Palm Beach County, Florida. See Palm Beach 2015.

14. Bloomington n.d.

15. Bloomington 2022.

16. In March 2022, a Washington state bill was signed into law that will preempt Seattle’s local regulations of TNCs HB 2076, 2021–22 House of Rep., Reg. Sess. (Wash. 2022). See Washington 2022.

17. Res. 32038, 2021 City Council, Seattle (Seattle 2021). See Seattle CC 2021.

18. For an in-depth analysis of privatization generally, see Cohen and Mikaelian 2021.

19. Brief for the States of New York, Alaska, Connecticut, Delaware, Hawaii, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, and the District of Columbia as Amici Curiae in Support of Respondents, Janus v. American Federation of State, County and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018); see also Brief for the City of New York as Amicus Curiae in Support of Respondents, Janus v. American Federation of State, County and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018); Brief of Mayor Eric Garcetti, County Executive Dow Constantine, Mayor Jenny Durkan, Mayor Rahm Emmanuel, Mayor James Kenney, and Mayor Bill de Blasio as Amici Curiae in Support of Respondents, Janus v. American Federation of State, County and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018).

20. See, e.g., Louisiana (Louisiana Revised Statute 44:67.1(a), Davis v. Henry, 555 So.2d 457, 459 (La., 1990).

21. See, e.g., North Carolina (N.C. Gen. Stat. Ann. § 95–9).

22. Res. 2017–259 2017, Adams County Board of County Commissioners (Colo. 2017). See Adams Cty. BOC 2017.

23. Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018).

24. This authority typically derives from the “police power”—as in the power to promote the health, safety, welfare, and morals of the community—among the powers delegated to local governments. See, for example, Utah Const. art. XI, § 5 (delegating “the authority to adopt, and enforce within its limits, local police, sanitary, and similar regulations”).

25. Before 2012—the beginning of the Fight for 15 movement—only five local governments had minimum wage laws (UC Berkeley Labor Center 2022).

26. Birmingham, Alabama; Johnson, Lee, Linn, Polk, and Wapello counties, Iowa; Kansas City, Missouri; Louisville and Lexington, Kentucky; Miami Beach, Florida; and St. Louis, Missouri, passed local minimum wages that were higher than the state minimums, but they were subsequently preempted by state legislation, thereby rendering the local ordinances ineffective (UC Berkeley Labor Center 2022).

27. Dependency on tips often makes workers more vulnerable to sexual harassment.

28. Council Bill 18–008, 2018, Las Cruces City Cncl. (N.M. 2018). See Las Cruces 2018.

29. Oakland’s hotel minimum wage is higher than the citywide minimum wage for hotel workers who do not receive employer benefits.

30. Res. No. 20220127–053, 2022, Austin City Cncl. (Texas 2022). See Austin 2022.

31. There is a distinction between paid sick leave, and paid family and medical leave laws. Paid sick day laws require employers to pay workers for a modest number of days out of work for the short-term health needs of themselves and their families, while paid family and medical leave laws establish social insurance programs, typically funded by employer contributions and employee payroll deductions, to be used for longer-term medical issues, care for a new child, or care for a family member who is ill. This discussion addresses paid sick leave. Paid family and medical leave has been generally addressed in the United States at the state level, although some local governments do provide paid family and medical leave for their own employees. See Onuma 2015.

32. Austin, Dallas, and San Antonio passed paid sick leave laws that subsequently were found to be preempted in litigation. The laws were challenged by business groups arguing that the local ordinances were preempted by a Texas law that prohibits localities from enacting a minimum wage higher than the state’s. As a result, workers in these three cities lack the legal right to paid sick time. See A Better Balance 2021.

33. The state law in New Jersey mooted and preempted the numerous local paid sick leave laws.

34. Law 2018/150, 2018, New York City Cncl. (N.Y. 2018). See NY City Council 2018.

35. Law 2021/aa5, 2021, New York City Cncl. (N.Y. 2021). See NY City Council 2021.

36. Seattle’s local regulations of transportation network companies will be preempted pursuant to a state law passed in March 2022. See Washington 2022.

37. These localities include Albany County (New York), Atlanta, Chicago, Cincinnati, Columbia (South Carolina), Jackson (Mississippi), Kansas City (Missouri), Louisville, Montgomery County (Maryland), New Orleans, New York City, Philadelphia, Pittsburgh, Richland County (South Carolina), Salt Lake City, San Francisco, St. Louis, Suffolk County (New York), Toledo, and Westchester County (New York).

38. Colorado had passed a similar law in 2021. S.B. 19-085, 2019 Gen. Assemb., Reg. Sess.

39. Law 2022/031, 2022, New York City Cncl. (N.Y. 2022). See NY City Council 2022.

40. N.Y.C. Admin. Code § 20–1271 et seq.

41. Rest. Law Ctr. v. City of New York, 2022 U.S. Dist. LEXIS 24268, __ F. Supp. 3d __, 2022 WL 409190.

42. Rest. Law Ctr. v. City of New York, 2022 U.S. Dist. LEXIS 24268, __ F. Supp. 3d __, 2022 WL 409190.

43. N.Y.C. Admin. Code § 20–1301 et seq.

44. City of Los Angeles Municipal Code Chapter XVIII § 181.00 et seq.; San Francisco Police Code Article 33D.

45. A 2003 survey conducted by Airports Council International-North America concluded that city ownership accounts for 38%, followed by regional airports at 25%, single county at 17%, and multijurisdictional at 9%.

46. 8 Phila. Code § 18–201(8); Miami-Dade Cty. Res. No. R–148–07 (Feb. 6, 2007); Rules and Regulations, San Francisco Airport, Rule 12.1.

47. By using a state’s grant of local emergency authority, local governments might plausibly be able to adopt temporary emergency policies even when state law preempts such policies under normal circumstances (Haddow, Davidson, and Huizar 2020).

48. See discussion in Section 4.

49. These local governments include Chicago; Cook County, Ilinois; Duluth, Minnesota; Emeryville, California; Los Angeles; Minneapolis; Montgomery County, Maryland; New York City; Philadelphia; Pittsburgh; San Diego; San Francisco; Seattle; St. Paul, Minnesota; Tacoma, Washington; and Westchester County, New York. In general, this clarification of existing paid leave laws was permanent.

50. Many of these ordinances are no longer in effect, and the remainder that are still in effect are set to sunset on a specified date or after the conclusion of the relevant COVID-19 emergency order.

51. Bill No. 200303, 2020, Philadelphia City Cncl., (Pa., 2020). See Philadelphia CC 2020a.

52. CB 119793, 2020, Seattle City Cncl., (Wash., 2020).

53. Bill No. 200328, 2020, Philadelphia City Cncl. (Pa., 2020) See Philadelphia CC 2020b.

54. Coronavirus State and Local Fiscal Recovery Funds [rule], 87 Fed. Reg. 4338–4454 (January 27, 2022).

55. Minneapolis n.d.e.

56. The nonprofit organization Good Jobs First has lamented the lack of transparency in relation to state use of ARPA funds; it is likely that similar concerns exist in relation to local decision-making. See Furtado 2021.

57. Building & Construction Trades Council v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc., 507 U.S. 218 (1993).

58. Gade v. National Solid Wastes Management Association, 505 U.S. 88, 99–100 (1992).

59. Steel Inst. of New York v. City of New York, 716 F.3d 31, 34 (2d Cir. 2013).

60. In addition, five state plans cover only local and state government workers.

61. 29 USC § 218 (“No provision of this [Act] shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this [Act] or a maximum work week lower than the maximum workweek established under this chapter.”)

62. Wyeth v. Levine, 555 U.S. 555 (2009).

63. Also referred to as the “new preemption” or “abusive preemption” by some legal scholars.

64. HB 2076, 2021–22 House of Rep., Reg. Sess. (Wash. 2022). See Washington 2022.

65. For example, many state consumer protection and public nuisance laws empower city, county, and district attorneys to bring actions to enforce those laws. See, e.g., N.C. Gen. Stat. §§ 160A–193, 153A–140 (providing cities and counties with authority to abate public nuisances); Cal. Bus. & Prof. Code § 17204 (2019) (providing city and county attorneys in local jurisdictions with more than 750,000 residents the authority to bring unfair competition claims).

66. The Oakland city attorney’s office brought a case alleging wage and hour violations alongside a civil legal services organization to vindicate the rights of hotel cleaners (Oakland OCA 2018). In 2019, the San Diego city attorney’s office brought suit against Instacart alleging misclassification of its shoppers who obtain and deliver groceries and obtained an injunction, which was rendered inoperative by the passage of Proposition 22 in 2020 (Allsup and Mulvaney 2021).

67. In Alabama, California, Colorado, Florida, Kansas, Kentucky, Michigan, Minnesota, Missouri, and Montana, district attorneys have civil authority to enforce the state unfair deceptive acts and practices (UDAP) law. Ala. Code § 8–19–4, 8–19–8 (2019); Cal. Bus. & Prof. Code § 17204 (2019); Colo. Rev. Stat. § 6–1–103 (2018); Fla. Stat. § 501.203, 501.207 (2019); Kan. Stat. Ann. § 50–626(a)–632(a)(3) (2018); Ky. Rev. Stat. Ann. § 367.300 (West 2019); Wayne Cty. Prosecutor v. Wayne Cty. Bd. of Comm’rs, 93 Mich. App. 114, 127 (1979); Minn. Stat. § 325F.67, 325F.70 (2019); Mo. Rev. Stat. § 407.020 (2018); Mont. Code Ann. § 30—14–121 (2019).

68. Wage theft is the practice of employers failing to pay workers the full wages to which they are legally entitled. It includes situations in which employers refuse to pay promised wages, pay less than legally mandated minimums, fail to pay for all hours worked, keep worker tips or deductions intended for worker benefits, or do not pay overtime. In some states, the term “wage theft” is defined in the law, but more commonly it is used as a colloquial and descriptive term to refer to a set of practices. See Rosado Marzán 2020 for a detailed description of wage theft.

69. See also, In re Vega, 2020 N.Y. Slip Op. 02094 (N.Y. Court of Appeals March 26, 2020).

70. Minneapolis Code 40.110.

71. Localities also may provide conditions on grants to improve worker standards. For example, Boston funded a pilot program to support small restaurants and their workers during the COVID-19 pandemic. The grants were conditioned on the small businesses paying workers $12.75 an hour, as compared with the $5.55 tipped minimum wage under Massachusetts law (Edwards n.d.).

72. Somerville Code of Ordinances, Chapter 9, Article III, Division 2. See Somerville n.d.

73. City of Boston Municipal Code Chapter 24. See Boston n.d.a, n.d.b.

74. “Assistance shall mean any grant, loan, tax incentive, bond financing, subsidy, or other form of assistance of one hundred thousand ($100,000.00) dollars or more realized by or through the authority or approval of the City of Boston, including, but not limited to industrial development bonds, Community Development Block Grant (CDBG) loans and Federal Enhanced Enterprise Community designations awarded after the effective date of this Chapter. The forgiveness of a loan shall be regarded as financial assistance. A loan shall be regarded as financial assistance to the extent of any differential between the amount of the loan and the present value of the payments thereunder, discounted over the life of the loan by the applicable Federal rate as used in 26 U.S.C., Section 1274(d) 7872(f). A recipient of assistance shall not be deemed to include leases and subleases.” City of Boston Municipal Code Chapter 24 § 24-2(a).

75. City of Boston Municipal Code Chapter 24 § 24-2(e). See Boston n.d.a.

76. City of Boston Municipal Code Chapter 24 § 24-11(a). See Boston n.d.b.

77. Res. BOS-2016-196, 2016 Board of Supervisors, Santa Clara County (Santa Clara 2016). See Santa Clara n.d.c.

78. Hoboken Municipal Code Chapter 23. See Hoboken n.d.a.

79. Hoboken Municipal Code Chapter 199. See Hoboken n.d.b.

80. Seattle Municipal Code § 14.19.080 (I). See Seattle n.d.b.

81. San Diego Municipal Code Article 2 Division 30 § 22.3004(c). See San Diego n.d.

82. Social service agencies have filed a lawsuit challenging this law. See Blau 2022. 

83. Minneapolis City Code § 259.250 (2). See Minneapolis n.d.d.

84. Minneapolis City Code § 259.250 (5). See Minneapolis n.d.d.

85. Minneapolis City Code § 259.250 (5). See Minneapolis n.d.d.

86. City of Quincy, Massachusetts, Code § 9.4.9-9.4.10. See Quincy n.d.

87. City of Toledo, Ohio, Municipal Code § 701.04 (b). See Toledo n.d.a.

88. Seattle Municipal Code 14.19.100 (A) (4). See Seattle n.d.b.

References

Court Decisions and Orders

Building & Construction Trades Council v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc., 507 U.S. 218 (1993).

Florida, Palm Beach County, Fifteenth Judicial Circuit Court, Administrative Order No. 3.907-3/15.

Gade v. National Solid Wastes Management Association, 505 U.S. 88, 99–100 (1992).

New State Ice Co. v. Liebmann. 285 U.S. 262, 311 (1932).

Restaurant Law Center v. City of New York, U.S. District Court, S.D.N.Y., Case 1:21-cv-04801-DLC, Document 68, Filed 02/10/11, Opinion and Order.

Steel Inst. of New York v. City of New York, 716 F.3d 31, 34 (2d Cir. 2013).

Wyeth v. Levine, 555 U.S. 555 (2009).

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Key findings

Preemption is common in the Midwest and is embedded in a racist history.

• “Preemption” in this context refers to a situation in which state lawmakers block local ordinances from taking effect—or dismantle an existing ordinance.
• State lawmakers in Midwestern states are more likely than those in the Northeast and West regions to misuse preemption to interfere with local governments’ ability to set strong labor standards that would support people struggling to make ends meet, such as raising the minimum wage and guaranteeing paid sick leave. While preemption of workers’ rights is most common in the South, it is also a significant problem in the Midwest.
• The abuse of preemption by Republican-controlled state legislatures in the Midwest is intertwined with a history of segregation and other policy choices that have reinforced anti-Black racism and white supremacy.
• Preemption laws in the Midwest are passed by majority-white legislatures and tend to create barriers to economic security in cities whose residents are majority people of color; in many cases, a plurality of residents in these cities are Black.
• In most cases, the local ordinances that state lawmakers preempt would disproportionately benefit Black workers and other workers of color, as well as women, immigrants, and workers who are paid low wages.
• Advocates and lawmakers have pushed back on harmful preemption. Notably, the Chicago Teachers Union succeeded in a campaign to restore their right to bargain over employment conditions. Momentum is also building to repeal rent control preemption in Illinois.

Preemption limits local governments’ ability to protect their residents from the COVID-19 pandemic.

• Misuse of preemption has prevented localities in some Midwestern states from responding to the pandemic with local policies promoting public health, such as mask mandates and stay-at-home orders.
• In addition, interference with local policymaking in the past prevented these same localities from enacting measures that would have made them better prepared to respond to the COVID-19 dual public health and economic crisis.

Case studies. In this report, we use case studies to (1) document the pattern of misuse of preemption by state lawmakers and (2) explore the adverse implications of this state interference on workers.

Introduction

For many, the COVID-19 pandemic shed light on the precarity of workers, especially people paid low wages, and of marginalized groups within our economic system. For others, the pervasive inequality and uncertainty that characterized the pandemic and economic crisis were not anomalies—they were just another manifestation of the poor job quality, weak worker protections, and economic unfairness that has long been in place. These features are the result of deliberate policy choices. In order to combat them, lawmakers at all levels of government must be motivated and empowered to act.

Local government efforts across the country have often been key to advancing welfare-enhancing policies to protect workers and counter economic inequities—especially when federal and state action has been inadequate or absent. Local governments have taken action, for example, to fight climate change, to protect and promote public health, and to reverse systemic injustices against people of color, women, immigrants, and the LGBTQ+ community.

Given the complexity and urgency of such issues, states should be working with their peers in local governments on them. But instead of partnering with local governments, conservative state lawmakers have increasingly used preemption—a tactic whereby a higher level of government limits or eliminates the power of a lower-level government to regulate an issue—to reduce the policy tools and power available to local lawmakers.

The Midwest is second only to the South in abuse of preemption

As we document in another report, Preempting Progress: State Interference in Local Policymaking Prevents People of Color, Women, and Low-Income Workers from Making Ends Meet in the South, preemption of workers’ rights policies is most common in the South, where these laws are part of a long-running effort to limit the rights and freedoms of Black people and entrench white supremacy (Blair et al. 2020). While white supremacy is most associated with the South and the states of the former Confederacy, white supremacy has been an unfortunate component of Midwest history as well. This shameful legacy lives on in many of the region’s institutions, including in state government’s abuse of preemption to prevent progress and justice.

After the South, the Midwest is the region in which the preemption of workers’ rights is most prevalent (Kim, Aldag, and Warner 2021). As shown in the interactive map below, state lawmakers in the Midwest have used preemption to deny local governments the ability to improve job quality through minimum wage increases, fair scheduling laws, and paid leave requirements. They have stopped local governments from setting standards for municipal contracts and procurement through mechanisms common elsewhere such as project labor agreements (PLA)—contracts used in the construction industry to set basic conditions for safety, pay, and benefits on municipal projects—and prevailing wage laws. They have also preempted any effort by local governments to hold app-based platform or “gig economy” companies to the same standards as other employers. In choosing preemption rather than empowerment, these state lawmakers are often bending to pressure from corporate interests and right-wing groups such as the American Legislative Exchange Council (ALEC) (Cornejo, Chen, and Patel 2018).

What’s in this report

We begin this report with an exploration of the historical context behind preemption in the Midwest. As is the case in the South, current-day preemption of workers’ rights in the Midwest is an extension of policies that were motivated by and that reinforced anti-Black racism. The modern policy landscape now also works to stifle efforts to promote equity for other workers of color, women, immigrants, and workers who are paid low wages.

After reviewing the historical context, we turn to specific case studies highlighting a range of issues, primarily focused on workers’ rights, in which state policymakers are interfering with local democracy throughout the Midwest. To the extent that the data allow, we show the specific impacts state interference has on people of color as well as women, immigrants, and workers who are paid low wages. In two of our case studies, we highlight ways advocates are resisting preemption, through efforts to repeal two types of preemption in Illinois.

Preemption in the Midwest is, in a great many ways, similar to preemption in the South. When local governments enact policies that benefit people of color or advance worker justice, state lawmakers—typically, though not exclusively, conservative lawmakers—have passed laws to overturn those local decisions. Sometimes, even when local policymakers have not passed any specific ordinances, state lawmakers act preemptively to take away their future rights to do so. In the cases documented here, the state legislatures were all majority white and male. (The appendix tables provide the demographics of the cities or counties side by side with those of the state legislatures.)

Finally, we discuss how the COVID-19 pandemic has disproportionately harmed the communities of color that have been preempted from taking local action, limiting their ability to effectively combat the public health crisis and further entrenching economic inequality.

Preemption in the Midwest is tied to segregation

The use of preemption to suppress communities of color in the Midwest today has its roots in the oppressive housing segregation policies the region implemented in response to the Great Migration. In the first half of the 20th century, 6 million Black Americans moved out of the South, many to Midwest cities where they found work in factories (Gordon 2019). Their arrival changed the demographics of the Midwest.

Black migrants to the Midwest frequently faced hostility in their new homes

As more and more Black families began settling in the Midwest, violence against the newcomers increased, often with the goal of enforcing segregationist policies. When the “second Klan”1 emerged in 1915, it also took hold in the Midwest. By the mid-1920s, 30% of U.S.-born men in Indiana were Klan members, including many state and local officeholders—all the way up to the governor (Fischer 2017; Ryan 2020).

In the first half of the 20th century, race riots—in which white people assaulted Black neighborhoods, burned Black-owned businesses, and lynched Black residents—broke out in several Midwestern cities, including Springfield, Illinois, in 1908, East St. Louis in 1917, and Duluth, Minnesota, in 1920. In Chicago, a group of white swimmers assaulted—to the point of drowning—a Black 17-year-old who had drifted across the line segregating Lake Michigan while swimming with his friends. The event set off a series of race riots during what became known as the Red Summer of 1919 (Jones 2019; Sander 2020).

As was the case in the South, white workers often resisted the entry of Black workers into blue-collar union jobs. In Detroit, 25,000 white workers at a Packard plant went on strike in 1943—in defiance of World War II no-strike orders—to protest that three Black workers had been promoted at the plant (Loomis 2018). In 1973 alone, 1,600 charges of racial discrimination by unions were filed with the Equal Employment Opportunity Commission (Windham 2017). When some white workers in unions showed solidarity with Black workers, other white people reacted violently. For example, over five days in Chicago in 1949, a white mob threw rocks at and tried to burn down the home of Aaron and Louise Bindman after Aaron, a white union leader, invited Black union stewards to his home for a meeting (Harney and Charlton 2000).

Government and businesses acted to segregate neighborhoods

In response to the growing number of Black people in the region, white lawmakers and business leaders developed a collection of systems and policies that racially segregated Midwestern cities by neighborhood (Rothstein 2017). Segregation was a means of controlling and limiting the economic freedom of Black migrants to the region, with far-reaching consequences for wealth creation, education, and health.

In the South, the agricultural system was designed so that enslavers and enslaved Black people lived in close proximity on plantations. This gave wealthy, white enslavers direct control over the lives of Black people. When, in the early Reconstruction years, Black elected officials began to gain power—and Black people could begin to take control of their own lives—backlash quickly followed. Southern lawmakers acted quickly to restore and enshrine their control and supremacy in the post–Civil War political structure. This control and supremacy is reinforced today in the South by state preemption of local laws (Blair et al. 2020).

In the Midwest, however, white supremacy took hold through segregation. Without the plantation forming the central political and economic unit, communities were separated geographically along racial lines. Through private and government housing practices, Black people were restricted in where they could live in Midwestern cities.

The real estate industry advanced segregation

Although the Supreme Court found explicit city segregation ordinances to be unconstitutional in a 1917 ruling (Buchanan v. Warley), segregation of private property nonetheless proliferated. During the 1910s, Chicago’s burgeoning real estate industry propagated the racist idea that neighborhood integration would decrease property values (Moser 2017). Race-restrictive covenants were used to prevent property in white neighborhoods from being sold or rented to Black people.

Real estate speculators also employed a tactic known as “blockbusting.” To goad fearful white residents into selling their homes below market value, these speculators would make the racist claim that a Black family moving into the neighborhood would cause home values to decline. The speculators then sold those homes to Black families at a markup. This shifted the racial demographics of neighborhoods almost overnight: The departing white families often moved to suburban enclaves that excluded people of color—marking the phenomenon known as “white flight” (Sugrue 1996).2

The use of race covenants during the 1910s and 1920s, combined with blockbusting following World War II, caused Midwestern cities such as Chicago and Milwaukee to become among the most segregated cities in the nation (Jones-Correa 2001).

Lawmakers codified segregation—and cemented the resulting inequities

Government policies also entrenched segregation. In the 1930s, the Home Owners Loan Corporation, a federal agency created by the New Deal, developed “redlining” maps that were used to prevent Black homeowners from getting mortgages for homes in white neighborhoods. At the local government level, exclusionary land-use zoning practices prohibited the construction of multifamily housing in many white neighborhoods, creating another barrier for Black families and other people of color seeking to live there.

Because of policies that allowed (even encouraged) banks to refuse mortgage loans to Black and Brown people, Midwestern suburbs are far less racially diverse, even to this day, than the big cities they surround (Gordon 2019). This has had profound effects on the economic welfare of Black Midwesterners and other people of color in the region.

Residential segregation artificially suppressed growth of property values in Black neighborhoods, which increased the relative value of properties in white neighborhoods, helping spur the enormous wealth gap between white and Black households that persists to this day (Jones 2017; Rothstein 2017). In turn, because school funding in most states has historically been derived from property taxes, this disparate growth in property values has meant dramatic differences in school funding and school quality between majority-Black and majority-white neighborhoods.

As federal civil rights legislation and court rulings began to dismantle overt, legal segregation, activists and progressive policymakers pushed for states and the federal government to treat segregation as an issue that crossed jurisdictions. They noted that patterns of segregation did not clearly match city, county, and state boundaries, and argued that there was a real need for regional policies at both the intrastate and interstate level.

Unfortunately, those advocates suffered a decisive defeat in the Supreme Court’s Milliken v. Bradley decision in 1974. Milliken ruled that neither the state of Michigan nor suburban school districts in Michigan bore responsibility for the segregated state of Detroit schools and that the lower courts did not have authority to order regionwide desegregation plans that crossed school district lines.

Decades of white flight into the suburbs meant that desegregation, by definition, would require Black and white children to cross district lines to attend the same schools. Still, the Court’s decision established that states and suburban cities had no obligation to cooperate with efforts to desegregate schools in and around large cities. In the pursuit of racial justice goals that stretched across city and county lines, localities were on their own, and the Court would not force them to work together.

This was the case across the Midwest, as the suburbs of Cleveland, Chicago, Milwaukee, and Kansas City developed in the same way as Detroit’s. White suburbs became the home of high-quality, well-funded public schools and other quality public services, while the big cities’ schools were left with fewer resources.

Reversing the effects of segregation requires state-level support for local jurisdictions’ efforts

Raising standards and ensuring equity for all workers and their families requires cooperation. In the case of school desegregation, that means coordination across municipalities, and state intervention—to ensure consistency and equity in school access and quality—would be beneficial.

Although explicit, intentional racial segregation in housing and public services has been outlawed, many of the systems that create and perpetuate segregation in the Midwest still exist. These include exclusionary zoning, disparities in education funding that privilege wealthy, predominantly suburban school districts, and overpolicing and mass incarceration in Black and Brown communities (Charles, Vock, and Maciag 2019). Consequently, Midwestern cities are the most segregated in the U.S. today (Maciag 2019).

While desegregation should be the primary end goal, state lawmakers could intervene to at least mitigate one of the largest material outcomes of segregation: inequitable outcomes across school districts. History has proved this is possible—where there is the will to do so.

A 1971 reform increased the state of Minnesota’s share of education funding by more than 50%, reducing schools’ reliance on local property taxes—in effect, shifting the cost burden of schools away from urban and rural communities and onto wealthier suburbs (Dornfeld 2007). The “Minnesota Miracle” led to decades of nation-leading academic achievement before it was dismantled, leaving the state with one of most serious education gaps in the country (Grunewald and Nath 2019).

The Milliken decision and the rollback of the Minnesota Miracle illustrate the failure of state lawmakers to intervene in local policymaking in a positive, productive, and sustained way. While these examples do not involve outright state preemption, they underscore how preemption advocates’ calls for “consistency” statewide are simply a justification for keeping standards consistently low and for denying local government the policy tools they need to address collective problems.

Ultimately, preemption of local action to raise standards and combat problems echoes the “separate and unequal” reality at the core of segregation and reinforces the very same elements of racial injustice and economic inequality that segregation does. Moreover, one of the fundamental purposes (and effects) of segregation—white leaders restricting and harming Black and Brown communities—continues to be replicated in the Midwest through state lawmakers’ abuse of preemption as they prevent, or even roll back, efforts by local governments to make life better for their residents.

Segregation and preemption intersect with other policy choices to undermine racial justice

To fully understand the harm caused by the abuse of preemption today, we must look at three particular strands of Midwest history that interacted with, and reinforced, segregation and inequality: declining investment in public services, a surge in privatization that has further tied the hands of local governments, and the precipitous decline of organized labor in the Midwest. By devaluing public goods and undermining cross-racial and class solidarity, these trends created the political environment for the abuse of preemption to occur and have magnified its harmful impact.

Declining investment in public services in the Midwest

There was a time when the Midwest had many laboratories of democracy—including progressive municipal governments, counties, and school districts that enacted policies to support working families. This is not to say that all was well, but there was certainly a time when local governments were willing and able to do a lot more.

In case after case, though, these efforts foundered on the rocks of racism. When given a choice between supporting Black and Brown families, as well as white working-class families, or abandoning good policies even when it cost all families, Midwestern political leaders too often chose the latter. Segregation enabled and even encouraged these policy choices, since underinvestment in Black communities could persist while wealthy white communities could continue to enjoy robust public investment.

Take Milwaukee, for example: In the 1950s, Milwaukee Mayor Frank Zeidler ran what Fortune magazine called the “second-best-run city in the country.” He established Milwaukee’s public television station, built affordable housing, and once blocked a freighter from Milwaukee harbor because it was carrying materials for the Kohler Company, whose workers were striking.

Zeidler’s policies, however, triggered racist backlash, with one election opponent running on the slogan, “Milwaukee needs an honest white man for mayor.” After Zeidler left office in 1960, the city stopped plans to build more affordable housing, canceled civil rights programs, and earned the nickname “the Selma of the North” (Arndorfer 1999).

Heather McGhee’s The Sum of Us (2021) ably documents the decline of municipal recreation infrastructure in St. Louis and other cities across the Midwest and the country: The Fairground Park pool in St. Louis was one of the largest municipal swimming pools ever constructed, one of thousands of such pools built by cities in the 20th century.

Within a few years of being ordered to integrate in 1949, however, the pool was closed and eventually buried underground, as were most other municipal swimming pools. Throughout The Sum of Us, McGhee details how undermining services for communities of color typically resulted in poor white communities suffering as well.

During the Midwest’s industrial heyday in the years after the Second World War, public hospitals were founded or expanded in most of the region’s major cities. These hospitals provided vital services for growing cities, made possible in no small degree by the generous insurance benefits of unionized workers.

However, as deindustrialization and white flight hollowed out Midwestern cities, governments were “not willing to continue to operate a hospital…exclusively for the poor” and began divesting the hospitals or transferring them to private operation, with concomitant risks for poor patients (Legnini et al. 1999). In the Midwest, the practical effect of this is that health care options for Black and Brown families in Midwestern cities are much worse than they are for white residents in those same cities.3

While the Great Migration may have offered Black children in the North the promise of greater economic mobility than in the South, by the mid-20th century a racial gap in upward mobility took hold in the North too. Ellora Derenoncourt (2019) documents this trend and identifies two key culprits: changes in public spending and segregation. Increasing shares of white children were enrolled in private schools in these destination cities, suggesting a “white flight” from public school districts in urban areas in response to the migration and a corresponding decline in resources devoted to the remaining public school students, including most Black students. At the same time, migration was associated with higher spending on policing targeted at neighborhoods with Black residents.

Increased privatization

An important tool in the hands of local governments is their ability to use the assets they control for the public good. Ensuring access to clean drinking water, good public schools, well-maintained parks and roads, and ample mass transit are at the core of local government functions. When well-managed, municipal assets—public works facilities, public lands, public health care facilities, and so on—can be drivers of equity.

But in the Midwest, as across the country, fiscal difficulties created by years of inadequate revenue generation led local leaders to sell public assets to private, for-profit companies, creating a short-term cash windfall at the expense of long-term investment. A study in Minnesota, for example, demonstrated that privatizing school bus services increased costs by as much as 15.8% (Thompson 2011). Chicago’s decision to privatize its parking meters for $1.16 billion gave the city a short-term windfall but meant potentially forfeiting more than $100 million in annual revenue and, according to a class-action lawsuit filed this summer, prevented the city from doing more to support public transit, ride-sharing, and bicycle use (AP 2021).

Of deeper concern than the fiscal loss is the direct harm done to people. Privatization reflects the same impulse seen in the reactions to integration, rooted in racism and classism, to discard public goods (ITPI 2016; McGhee 2021). By introducing a profit motive, privatization fundamentally changes how the value of providing a public good is determined, leading to services prioritizing meeting needs of wealthier individuals at the expense of broadly accessible services that promote healthy and safe communities, economic equality, and racial and gender justice.

Water systems

Nothing exemplifies the harms of privatization better than water. Food & Water Watch estimated in 2015 that the privatization of water systems resulted in charges to consumers 59% higher, on average, for water service than local government utilities, while also costing one in three water workers at the formerly public utilities their jobs (Food & Water Watch 2015). In the Midwest, the share of households who now get their water through a privatized water system ranges from 1% in Minnesota to 30% in Ohio and 29% in Missouri (Douglass 2017).

Flint, Michigan, is of course the ultimate horror story of water policy gone wrong. When the city’s local government was replaced by a state-appointed overseer, the source of Flint’s water was switched to the Flint River. The corrosion of old lead pipes from that river was the cause of the Flint water crisis that has caused so much harm to so many people.

Congressional testimony asserted that one purpose of the switch was to enable future privatization of the water system (Shariff 2019). A private company, Veolia, contracted to assist the overseer’s switch in water systems, knew about the risk of lead contamination in February 2015. However, the residents of Flint were not formally warned of the risk until September of that year. A lawsuit filed by the Michigan Attorney General alleged that Veolia had engaged in “professional negligence, fraud, and public nuisance” for, among other things, reporting to citizens in February 2015 that the “water is in compliance with drink water standards” when a test done on the same day the report was issued showed lead levels almost seven times higher than what is deemed safe (Holden, Fonger, and Glenza 2019).4

It will be years before we can fully catalog the harms caused by the Flint water crisis, but the lessons are clear now. When a profit motive influences public policy decisions involving public assets, the dangers are real (ITPI 2016).

Education

Privatization has also undermined another vital public service in the Midwest, the K–12 education system, through the expansion of school vouchers and charter school systems. Charter school advocates argue that channeling public resources into private schools in the name of “school choice” promotes integration; however, charter schools tend to be more racially and economically segregated than public schools (Kahlenberg, Potter, and Quick 2016; Mathis and Welner 2016).

School vouchers have their origins in Southern states, where they were used during the backlash against school integration in the 1950s and 1960s to effectively establish a publicly funded private school system for white children and undermine investments in the public schools still serving Black communities (Ford, Johnson, and Partelow 2017).

In recent years, Midwestern states have been at the forefront of expanding school voucher programs and charter school systems. Indeed, the very first charter school in the country was City Academy in St. Paul, Minnesota, founded in 1992 after Minnesota passed the nation’s first law sanctioning charters (Sanchez 2012). The Wisconsin state legislature targeted the Milwaukee School District in 1989 with the first modern school voucher program in the country, and Indiana established the first statewide school voucher program for low-income students in 2011 (Cunningham 2016).

Indiana’s voucher program, already one of the broadest programs in the nation when it was established, was further expanded by lawmakers in 2013 under then-Gov. Mike Pence. Eligibility was extended to some middle-income families, as well as to some children who had never attended a public school (i.e., children who had previously only attended private schools or been home-schooled). Following these changes, the share of students using vouchers who were Black declined while the share who were white increased (Peers McCoy 2021; Turner 2017).

Wisconsin has also greatly expanded its voucher system since its inception, including in the 2015 budget passed by the Republican state legislature and signed by Gov. Scott Walker. The budget simultaneously seriously reduced K–12 education funding and eliminated the state’s only program intended to desegregate public schools (Strauss 2015).

Like preemption, the long-term trend of privatization of public services at the local government level limits the options available for local policymakers to take action to improve the lives of working people and advance racial and gender justice.

Organized labor’s decline

As public services were undermined in the Midwest, so was another force for collective good: unions. Organized labor, like local government, is a structure in which groups of people united by a common stake can exercise their collective power to better their communities.

The benefits of unions for workers and their families are clear: Unionized workers tend to have higher pay, better benefits, and a stronger voice in their workplace (McNicholas et al. 2020). Workers covered by a union contract are paid, on average, 11.2% more than workers in similar jobs with similar education and experience. Unionization makes an even bigger difference for Black and Latinx workers, who are paid 13.7% and 20.1% more, respectively, when covered by a union contract.

However, unions are too often thwarted by those in power who stand to benefit from the economic exploitation of others. Like preemption, the concerted efforts of private interests to undermine unions can deny workers a voice and limit their ability to advocate for shared prosperity.

A brief history

The benefits of unions for workers and their families are clear: unionized workers tend to have higher pay, better benefits, and a stronger voice in their workplace (McNicholas et al. 2020). Workers covered by a union contract are paid, on average, 11.2% more than workers in similar jobs with similar education and experience. Unionization makes an even bigger difference for Black and Latinx workers, who are paid 13.7% and 20.1% more, respectively, when covered by a union contract.

Heading into the 1980s, strong labor unions supported better economic conditions for working families in the Midwest—especially Black and Brown workers, who were more likely to be covered by union contracts than white workers (Rhinehart, Windham, and Mishel 2020). Union density—the share of workers in a union or covered by a union contract—was higher than the U.S. average in six of the nine states we look at in the report, and the three most populous states—Illinois, Ohio, and Michigan—were among the top 10 in the country for union density.5

Between 1983 and 2020, however, the Midwest experienced a decline in labor unions far more severe than the overall national decline. Only one Midwestern state, Minnesota, remains in the top 10 states for union density. This decline is the direct result of policy and corporate practices that undermine worker power.

So-called right-to-work laws undermine unions

Eight Midwestern states (North Dakota, South Dakota, Nebraska, Kansas, Iowa, Wisconsin, Michigan, and Indiana) have so-called right-to-work (RTW) laws, which weaken unions by requiring them to represent workers who are not union members and who do not pay “fair share fees.” “Fair share fees”—paid by workers who are covered by a union contract but are not dues-paying union members—help with the cost of negotiating and administering collective bargaining agreements (NCSL 2021).

Most RTW laws in the Midwest were passed either in the 1940s or 1950s, as housing segregation was becoming prominent, or during a more recent wave from 2012 to 2015. Like so many other efforts to entrench white supremacy, RTW laws had their roots in the Jim Crow South before being exported to the Midwest (Kromm 2012).

Employer tactics undermine unions

The decline in unionization also reflects employer tactics, both legal and illegal, to unfairly defeat or deter union campaigns—tactics that are enabled by inadequate and weakly enforced federal labor law (Rhinehart, Windham, and Mishel 2020). Those in power have an economic incentive to use such tactics, and it pays off, at least for some: Nationally, the decline in union density was mirrored by a precipitous rise in the share of income going to the top 10%, shown in Figure A.

Figure A

Implications for racial justice and equity

Unions are important mechanisms for working people to demand better and fairer economic outcomes, and membership in a union has been shown to reduce a white person’s feelings of racial resentment (Frymer and Grumbach 2021). The decline of unions has made it easier for the political right to sow racial division and use it to advance an agenda that benefits the wealthy. The policy decisions we document in the following case studies—decisions that hurt all working people, but particularly workers of color, women, and immigrants—likely met with less resistance because of the decline of unions.

Case studies

Segregation, disinvestment from public services, and the weakening of collective bargaining rights are all the result of deliberate past policy choices. This history has undermined cooperation and shared prosperity and has left Midwesterners with fewer policy tools to promote economic security and justice. While the stage was set long ago, today’s state policymakers are reinforcing these same long-standing trends by abusing preemption, further limiting the options available to local governments to improve the lots of their communities.

The following case studies from across the Midwest document how the misuse of preemption stifles local policies aimed at improving the lives of working people, in particular those who are paid lower wages. The policies these cases focus on would also have helped to build more equitable communities by disproportionately benefiting people of color, women, and immigrants, who have been economically marginalized by systemic racism, sexism, and xenophobia.

We also show in these case studies that the state legislatures enacting these preemption laws do not represent the demographics of the cities whose ordinances they are preempting. Rather, this troubling trend echoes a long history of white, male voices dominating policy decision-making.

Minimum wage: St. Louis and Kansas City, Missouri

In the summer of 2015, lawmakers in both St. Louis and Kansas City, Missouri, raised their local minimum wages. That same summer, the state legislature preempted future local minimum wage increase ordinances, while business leaders in Kansas City filed for a referendum to overturn the city council’s ordinance. This delayed the ordinance from taking effect and, coupled with the preemption bill, ultimately killed the minimum wage increase. Although the St. Louis bill took effect briefly, state lawmakers passed a second preemption bill in 2017—and the second bill was retroactive, nullifying the St. Louis measure. In both St. Louis and Kansas City, higher shares of the population are people of color than statewide.

The federal minimum wage was last raised in 2009 to $7.25, where it remains today. Every year the minimum wage is left unchanged, inflation erodes its purchasing power. Indeed, congressional neglect of the federal minimum wage has led to a 31% decline in its value since its high point in the late 1960s (Cooper, Mokhiber, and Zipperer 2021).

In response to this inaction at the federal level, more than half of U.S. states and many cities have set minimum wages above the federal standard (see EPI 2021). This includes Missouri, which in 2006 adopted a ballot measure to raise the state minimum to $6.50 and index it to inflation—i.e., to automatically adjust the state minimum wage each year thereafter to reflect changes in consumer prices over the preceding year.

The federal increases that took place in 2008 to $6.55 and $7.25 in 2009 superseded the minimum wage level determined by Missouri’s indexing formula, but by 2013 the inflation-linked value of the state minimum wage set in 2006 rose above the federal $7.25. When that occurred, Missouri’s state minimum wage began rising modestly above the federal minimum. By 2015, the state minimum wage was $7.65.

Kansas City and St. Louis sought to raise their minimum wages

In July 2015, the city council in Kansas City, Missouri, voted 12–1 to pass an ordinance establishing a city minimum wage of $8.50 per hour, effective August 24, 2015. The measure would have gradually raised the city minimum wage to $13 by 2020 (Horsley 2015). However, roughly two weeks after the city council vote, a coalition of business groups filed a petition with the city clerk’s office for a referendum on the ordinance—a move that, under the city’s charter, effectively blocked the ordinance from taking effect until the referendum could be voted on in a city election, which would likely have taken place the following spring had the state legislature not preempted local minimum wage increases first (KCUR 2015).

Separately, in August 2015, aldermen in St. Louis voted 16–8 to establish a city minimum wage of $8.25 per hour, effective that October. The measure would have gradually raised the city minimum wage to $11 per hour by January 2018 (Pistor 2015). In September, business groups sued the city, and the day before the measure was scheduled to take effect, a St. Louis district court blocked the higher minimum wage from being implemented. Lawmakers from the city appealed to the state supreme court.

Missouri state lawmakers acted to preempt local minimum wages

While elected leaders in these two cities were passing higher local wage floors with broad support, they faced challenges not only from businesses, but also from lawmakers at the statehouse in Jefferson City who were working to take away their ability to enact such measures. In May, the Republican-controlled state legislature passed a bill, H.B. 722, that preempted any local government from establishing a minimum wage higher than the state minimum wage. The governor at the time, Democrat Jay Nixon, vetoed the measure, but the legislature subsequently overturned Nixon’s veto later that September.

Notably, the 2015 minimum wage preemption law stipulated that local ordinances enacted prior to August 28, 2015, would not be preempted by the state law. This should have saved Kansas City’s minimum wage ordinance. But because Kansas City’s ordinance was blocked from full enactment by the business groups’ ballot petition, and an election to vote on the measure could not have been held prior to the August 28 deadline, the Kansas City minimum wage was effectively dead (Newill 2015).

However, St. Louis’s minimum wage ordinance—despite being blocked from taking effect as scheduled—was still in legal limbo as the city’s appeal to the state supreme court was being considered. In February 2017, the Missouri Supreme Court ruled that St. Louis’s minimum wage ordinance was legal and, because it had passed prior to the August 2015 deadline set in the state’s preemption law, it would be allowed to take effect later that year. On May 5, 2017—more than a year and a half after its original October 2015 start date—the St. Louis minimum wage ordinance took effect, setting a local minimum wage of $10 per hour (the amount the measure had stipulated would be effective on January 1, 2017).

Sadly, the St. Louis minimum wage was short-lived. On May 12, 2017—exactly one week after the ordinance took effect—the Republican-controlled state legislature passed a new preemption law that specifically targeted the St. Louis measure by outlawing all local minimum wage laws, regardless of when they were enacted. Missouri’s new Republican governor, Eric Greitens, opted to neither sign nor veto the bill, which, under Missouri’s constitution, allowed the bill to become law. Consequently, on August 28, 2017, the minimum wage in St. Louis dropped from $10 an hour to the state minimum wage of $7.70 per hour (Park 2017).

A predominantly white, male state legislature blocked ordinances that would disproportionately benefit women and people of color

Both of these cases reflect the common preemption pattern of a majority-white state legislature overruling the will of local communities that are either majority or disproportionately people of color (Blair et al. 2020). As shown in Appendix Table 1, Missouri’s state legislature is 88% white, yet the population of Kansas City is only 52% white and St. Louis is majority people of color, with only 44% of its population being white.

Both instances also represent cases of state lawmakers undermining local officials’ ability to implement public policies that reduce harm and combat social problems. St. Louis and Kansas City have significantly higher poverty rates than the state overall.6 Raising the local minimum wage was an appropriate policy response, given that higher minimum wages have been shown to have direct poverty-reducing effects (Dube 2019). Yet this tool was taken away from Missouri’s local policymakers by state lawmakers who may have little awareness of, or shared experience with, the communities they are denying self-governance.

Table 1, adapted from Cooper 2017, shows that Missouri’s preemption law undermined potential raises (in 2018) for an estimated 38,300 workers in St. Louis, 15.2% of the city’s total workforce. Of those workers who would have received a raise, 51.2% were Black and roughly one in 10 (9.9%) were Latinx, Asian American/Pacific Islander (AAPI), or some other race or ethnicity. Again, this starkly contrasts with the demographics of the state legislature, which is 88% white. Similarly, the table also shows that 56.1% of the workers who would have benefited from the city’s minimum wage law were women—another striking departure from the composition of the state legislature, where 75% of lawmakers were men (see Appendix Table 1).

Table 1

The preemption of Kansas City’s minimum wage similarly denied a raise to an estimated 52,000 workers—20.6% of wage-earners in the city. Table 2 describes the Kansas City workforce that would likely have received a raise had the city’s ordinance not been undone by state lawmakers. Although the majority of workers who would have received pay increases were white, workers of color would have disproportionately benefited: Nearly one in five white workers in the city (18.6%) stood to benefit, while 27.5% of Black and 24.9% of Latinx workers would have received a raise.

Table 2

In St. Louis and Kansas City combined, 90,000 workers were directly denied higher pay by the actions of the Missouri state legislature. In all likelihood, many more workers throughout the state also missed out on larger paychecks, as the higher wage floors in these two cities would have put pressure on employers elsewhere in the state to raise pay—and other localities might have followed suit and raised their minimum wages.

Missouri voters advocated for workers

Fortunately, Missouri’s lowest-paid workers did ultimately receive raises, as a voter-driven initiative to raise the statewide minimum wage passed in 2018. The measure will raise the statewide minimum wage to $12 by 2023 and index it to inflation thereafter.

Minimum wage: Johnson, Linn, Polk, Wapello, and Lee Counties, Iowa

In March 2017, Iowa state lawmakers passed a law preventing localities from enacting a higher minimum wage and nullifying existing local minimum wage laws. In the two years prior, four counties had raised their minimum wages and at least one other was poised to do so just before the preemption bill was passed. A majority of the workers who would have gotten a raise were women.

In 2006, when Congress amended the Fair Labor Standards Act to establish the schedule of increases that would bring the federal minimum wage to $7.25 by July 2009, lawmakers in Iowa decided they need not wait that long. In 2007, the state legislature passed—and Gov. Tom Vilsack signed—a minimum wage increase that took the state minimum to $7.25 by January of 2008. But in the years that followed, the state minimum wage—like the federal minimum—was left to languish.

Five Iowa counties took action to raise their minimum wages

In September 2015, after seven years of decline in the purchasing power of the state minimum wage, the Board of Supervisors in Johnson County—home of Iowa City—voted to enact a county minimum wage of $8.20 per hour, effective November 1. The measure specified the county minimum wage would gradually increase to $10.10 per hour by January 2017 and would be indexed to inflation thereafter, with automatic increases beginning in July 2018. The measure was a success, lifting pay for more than 10,100 workers in Johnson County as its minimum wage rose. The majority (56%) of affected workers were women, nearly 80% were adult workers ages 20 or older, and most had at least some college experience (IPP 2015).

Seeing the success of the Johnson County ordinance, county supervisors in neighboring Linn County—home to Cedar Rapids, the second-largest city in the state—enacted their own county minimum wage in September 2016 (Moore 2016). The ordinance set a county minimum wage of $8.25 in January 2017, with subsequent increases to $10.25 by January 2019. An analysis by Peter Fisher (2016) at the Iowa Policy Project estimated that the Linn County measure would raise wages for upward of 18,400 workers in the county. As in Johnson County, most of the Linn County workers who would benefit were women (54%) and adults at least 20 years old or older (80%).

The day after the Linn County measure was passed, the county board of Wapello County—a much smaller, more rural county in southeast Iowa—voted to enact their own county minimum wage of $8.20 per hour, effective January 1, 2017, with subsequent increases to $10.10 by January 2019 (AP 2016). However, this measure was weakened when lawmakers in Ottumwa, the largest city in the county, voted to opt out of this county-level minimum wage increase (Whitaker 2016).

As shown in Table 3, if fully enacted across the county, the Wapello County measure would have likely raised wages for 2,200 workers—one in six workers in the county. The Wapello measure is especially noteworthy because incomes in Wapello are significantly lower and poverty rates noticeably higher than in much of the rest of the state—meaning that the minimum wage increase there would likely have had a more significant impact on the welfare of local working families.

Table 3

Momentum for raising wage standards in Iowa was clearly building, and the Wapello County measure was not the end. In October 2016, the Board of Supervisors of Polk County—Iowa’s most populous county and home to the state capital, Des Moines—voted to establish a local minimum wage of $8.75, starting in April 2018, with subsequent increases that would have brought the minimum wage to $10.75 by January 2019. The measure would have directly lifted pay for over 38,000 workers, about 15% of workers in Polk County.

County supervisors in Lee County, another more rural county in the southeast corner of the state, also began working on a local minimum wage ordinance that would ultimately be passed in March 2017 (Radio Iowa 2017). That measure would have raised pay for 2,100 workers, 14% of the county workforce.

Iowa state lawmakers halted the minimum wage momentum

By early 2017—with four counties having recently passed higher wage standards, and Lee County heading in that direction—one might expect state lawmakers to recognize the evidence of a need and public desire for a statewide minimum wage increase. Indeed, a 2014 poll of Iowans showed nearly two-to-one support for raising the state minimum wage above $7.25 (Jacobs 2014). But instead, state lawmakers chose to move in the opposite direction.

On March 30, 2017, Republican Gov. Terry Branstad signed HF 295, a bill passed by the Republican-controlled Iowa legislature that preempted local governments from establishing any labor standards that differed from state law, including higher minimum wages. The law applied to all existing and future local ordinances, making Iowa the first state in the country to nullify an existing local minimum wage law that had already taken effect (Hirsch 2017). (Missouri followed suit two months later.)

The Iowa case is revealing, as it shows how state lawmakers had no qualms—and seemingly suffered few political consequences—for contradicting the expressed preferences of a majority of state residents on an issue that was clearly gaining traction across the state.

A majority-men state legislature denied raises to a majority-women low-wage workforce

The Iowa case demonstrates how state preemption can reinforce not just racial hierarchies, but gender ones as well. Women are far more likely to be employed in low-paying jobs and would have benefited disproportionately from the Iowa local minimum wage ordinances.

Table 3 shows the gender composition of each Iowa county’s workforce and the workers who would have benefited from the local minimum wage measures. In every county, a majority of the workers who would have gotten a raise were women, and in Lee and Wapello Counties, women would have benefited at more than twice the rate of men. Yet tens of thousands of women workers in these counties were denied pay increases by a state legislature that was majority men (NCSL 2020).

Preemption’s use as a tool for reinforcing white control over communities of color was present in Iowa, although the racial differences were less pronounced. As of 2019, the state was 85.7% white, yet as of 2020, the state legislature was 96% white (see Appendix Table 2). American Community Survey data show that the populations of Wapello County, Johnson County, and Polk County are 81.0%, 78.0%, and 77.0% white, respectively—still majority white, but with substantial Black, Latinx, and AAPI populations. The racial makeup of Linn and Lee Counties are similar to the overall state composition.

Fair scheduling: Detroit, Michigan

In 2015, the Michigan state legislature passed a law, monikered the “Death Star Bill” by opponents, that prohibited local governments from implementing a range of policies that would benefit workers, including fair scheduling regulations, paid leave mandates, local minimum wages, and prevailing wage laws. Fair scheduling could benefit 38,702 retail and food service workers in Detroit; 77.4% of those workers are Black.

Michigan’s state legislature took a particularly aggressive approach when they passed a sweeping anti-worker preemption bill in 2015.7 Known by its opponents as the “Death Star Bill” for its complete destruction of local authority, this bill preempted local governments from enacting a broad slate of pro-worker policies. It targeted regulations that would benefit low-income workers and workers of color, such as minimum wages, fair chance hiring or “ban-the-box” laws, and mandated employee benefits such as paid leave. The legislature took clear aim at workers by including measures against union organizing, strikes, wage disputes, and apprenticeships in the list of prohibited local policies.

Local fair scheduling regulations were among the many policies targeted by the Death Star Bill.

Fair scheduling laws mitigate employer practices that can wreak havoc in workers’ lives

Fair scheduling laws require that employers give advance notice of worker schedules or provide additional pay to employees when their schedules are changed without adequate notice. These laws typically aim to improve scheduling practices in low-wage sectors such as retail and hospitality.

By prohibiting its cities and counties from enacting such laws, Michigan is preventing communities from adopting labor standards that would disproportionately benefit women and workers of color, who are far more likely to hold positions subject to erratic scheduling (Rothstein and Morsy 2015).

The COVID-19 pandemic has shown that life can be challenging and unpredictable, especially in the midst of a personal health crisis or when schools and day cares close unexpectedly. Having some say in their work hours gives workers the ability to manage the challenges that life poses, whether it is scheduling doctor’s appointments, arranging for child care, or just going grocery shopping, while mitigating negative effects on their economic security.

However, many workers, especially hourly workers and workers who are paid low wages, are subject to unpredictable schedules (Vogtman and Tucker 2017). Under the guise of flexibility, employers leverage technology to make last-minute and inconsistent scheduling decisions. The result is that workers are required to give up their own freedom and flexibility (Corser 2019).

These unfair scheduling practices can take many forms, often used in combination, compounding their negative effects. Some employers use “just-in-time” scheduling—the practice of using computer algorithms to make last-minute staffing decisions in response to anticipated changes in demand. Another tactic is on-call scheduling: Workers are asked to stay available, generally without compensation, but are not told whether they are required to come in until a few hours before the shift. Alternatively, workers may be scheduled for a full shift but then sent home early with no notice, depriving them of expected income while still requiring them to make child care, transportation, or other arrangements. Workers may also be asked to work unreasonable shifts, for example, a “clopening”—a late closing shift followed by an early opening shift (Vogtman and Tucker 2017; Schneider and Harknett 2019).

Each of these practices is widespread within the retail and food service industries (Schneider and Harknett 2019). While unfair scheduling is certainly not limited to retail and food service, most fair workweek laws do focus on protecting workers in those industries (Wolfe, Jones, and Cooper 2018).

Unpredictable scheduling practices wreak havoc in workers’ lives. To keep their jobs and satisfy their employers’ scheduling whims, workers must plan their time, spending, and savings around these inconsistent (and often insufficient) hours. Unpredictable scheduling can negatively impact workers’ access to child care and health care. It can be time-consuming to find and apply for an open spot in a day care center, and day cares often require consistent drop-off schedules. And doctor visits require advance appointments. Enrolling in additional training and education can be nearly impossible when you are required to “stay available” for shifts (Vogtman and Tucker 2017). Even when compared with peers with similar wages, retail and food service workers with less predictable schedules were more likely to experience material hardship, such as going hungry or being unable to pay bills (Schneider and Harknett 2019).

Furthermore, unfair scheduling practices can make it difficult to schedule job interviews or shifts at other jobs, preventing workers who are part time but would like to work more hours from getting full-time work or another part-time job (Golden 2015). Part-time work and lower hours are more prevalent in wholesale and retail trade, as well as in leisure and hospitality (which includes restaurants), than in the overall workforce. At the same time, part-time workers in these industries are also more likely to want full-time work than their peers in the overall workforce (BLS 2021b).

Retail and food service workers of color, and particularly women of color, are more likely to experience unstable schedules than their white peers, an inequity that persists even when controlling for other demographic characteristics and education (Schneider and Harknett 2019).

Because of the clear importance of predictable scheduling to workers, a number of cities and one state have adopted scheduling fairness laws. As of 2018, 1.8 million workers in New York City, San Jose, Seattle, San Francisco, Emeryville (California), and the state of Oregon were protected by fair workweek laws that focused largely on retail and fast-food workers (Wolfe, Jones, and Cooper 2018). In 2020, fair workweek protections took effect in Chicago and Philadelphia, with Chicago’s ordinance covering workers in health care facilities, building services, and hotels in addition to restaurant and retail workers (HR Dive 2019).

Majority-white state legislature denied the right of a majority-Black city to pass fair scheduling laws

By preempting fair scheduling laws, the Michigan state legislature denied local governments the opportunity to protect those who work in retail and food service, not to mention workers in other industries who would stand to benefit from broader fair workweek protections.

In particular, if Detroit, a majority-Black city, were to enact fair workweek legislation, 38,702 nonmanagerial workers in retail and food service would stand to benefit, as shown in Table 4. The vast majority (29,943, or 77.4%) of those workers are Black. Women also stand to benefit from a fair workweek law focused on these industries, since they make up over half of this workforce. This is especially true in the retail industry, where 80.2% of nonmanagerial workers are Black and 57.2% are women.

Table 4

This state interference not only has an outsize impact on Black and women workers, but it also strips Detroit, a majority-Black city, of the authority to make material improvements in the lives of their constituents with policies that the majority-white state legislature has not taken up. More than three in four (77.4% of) Detroit residents are Black, while the statewide population is 75.0% white (see Appendix Table 3). The state legislature, which is 78% white, is not representative of Black workers and the population whose power they are usurping.

A Michigan state senator is pushing back on the Death Star Bill

In hopes of restoring local authority to address working conditions and economic security, Michigan State Senator Winnie Brinks introduced a bill last June to repeal the Death Star Bill.8

Paid sick leave: Indianapolis, Indiana

In 2013, Indiana state lawmakers passed a bill preventing localities from mandating paid sick leave and other employee benefits. Given the particularly low rates of paid sick leave access in the Midwest, many workers would stand to benefit if a city like Indianapolis were able to mandate that employers provide paid sick leave.

When workers do not have access to paid sick leave, they are forced to choose between their economic security and the health of themselves and their families. The workers who are the most economically precarious, who stand to lose the most by missing a day of earnings, are also the least likely to have access to paid leave. Just one in three workers in the lowest-paid 10% of occupations has access to paid sick leave, compared with 95% among the highest-paid 10% (BLS 2020).

The coronavirus pandemic made many realize the public health implications of going to work while sick—a realization that should underscore the importance of paid leave, even during “normal” times. Forcing service workers to work while ill poses an increased contagion risk to the greater community (NPWF 2021). And yet essential workers with a high degree of close contact with others—particularly in food services and personal care occupations—are especially unlikely to have access to paid sick days (IWPR 2016).

Status of paid sick leave laws in the Midwest

Despite the critical importance of paid sick leave, Indiana and six other Midwestern states—Iowa, Kansas, Michigan, Missouri, Ohio, and Wisconsin—have acted to prevent localities from passing laws mandating that employers provide paid sick leave (EPI 2019). The Midwest lags behind other regions when it comes to paid sick leave access, as does the South. More than one in four workers in those regions (27% in the Midwest and 28% in the South) lack access to paid sick leave, compared with 19% and 12% in the Northeast and West (BLS 2020).

In Illinois and Minnesota, two Midwestern states without paid leave preemption, local governments have passed laws requiring paid sick days. It is likely that other Midwestern cities would follow the examples set by Chicago, Duluth, Minneapolis, and Saint Paul if their states’ abuse of preemption were not standing in the way (ABB 2021b).

Just one Midwestern state, Michigan, has passed a statewide paid sick leave law; however, the law left a majority of workers without protection because it excluded large groups of workers, such as those at smaller businesses and those who had been at their job less than a year (Ruark 2018).

Indiana acted preemptively to prevent local governments from passing paid sick leave

In 2013, Indiana’s state legislature passed a bill preventing localities from mandating employee benefits, including paid sick days.9 This legislation was nearly identical to a May 2011 bill passed by Wisconsin’s Republican legislature preempting local paid sick leave laws. The Wisconsin bill aimed to knock out a Milwaukee ordinance that had won over nearly 70% of voters in a 2008 referendum and that had been deemed constitutional by a state Court of Appeals in March 2011 (Forward 2011). Wisconsin lawmakers succeeded in their aim and the ordinance never went into effect (Milwaukee Business Journal 2011).

Wisconsin’s preemption bill was circulated that summer at the 2011 American Legislative Exchange Council meeting, where ALEC members from the private sector and state legislatures collaborate on and disseminate model bill language. These bills cover wide-ranging issues, including gun control, housing policy, and immigration, and often feature preemption (Jackman 2013; Winig and deVuono-powell 2019). ALEC’s promotion of the Wisconsin paid leave preemption bill worked as intended. Other states, including Indiana, soon passed similar laws (Grabar 2016).

As shown in Table 5, nearly 200,000 Indianapolis workers—or 41.8% of the city’s workforce—would gain paid time off when sick if the city council were to enact a leave mandate. More than two in five (42.0%) of the workers who would benefit are people of color. In particular, about a quarter (24.5%) are Black. Since Latinx workers are least likely to have access to paid sick days—56.4% do not have access—they would be most likely to benefit from a leave mandate.

Table 5

This bill was not the first time Indiana lawmakers prevented progress on workers’ rights issues, nor was it the last. They had already, in 2011, forbidden local governments from establishing their own minimum wages.10 Prevailing wage and ride-share standard preemption followed in 2015.11 The state legislature also preempted fair scheduling requirements in 2016, one year after the Indianapolis City Council adopted a nonbinding resolution supporting a Retail Workers Bill of Rights calling for fair scheduling along with better pay and benefits (Eason 2016).12

Indiana’s state legislature is not demographically representative of Indianapolis

The Indiana state legislature’s thwarting of Indianapolis’s local authority is particularly disappointing since the lawmakers do not demographically represent the Indianapolis population. More than a quarter (27.7%) of Indianapolis residents are Black and one in 10 is Latinx (See Appendix Table 4). Yet the vast majority (89%) of the Indiana state legislature is white.

By blocking paid sick leave measures, Indiana lawmakers have prevented local policies that would help workers and their families manage individual health crises and that would have public health benefits. Cities should be able to lead the way, especially in the face of inaction at the state level, with policies that guarantee workers a right to paid sick leave, including additional paid time off available during public health emergencies (ABB 2021a).

Targeted and local hire laws: Cleveland, Ohio

In 2003, the Cleveland City Council passed the Fannie Lewis Law, which required that Cleveland residents be hired to perform 20% of the labor hours on public construction projects. State lawmakers passed a law in 2016 that prohibited regional or local hiring requirements or incentives, preempting the Fannie Lewis Law. The city of Cleveland challenged the 2016 preemption law, but the state law was upheld by the Ohio Supreme Court in 2019. If the Fannie Lewis Law were reinstated, it would result in more opportunities for Black and Latinx construction workers from Cleveland.

Targeted and local hiring policies support job opportunities for those who need them most by requiring that a minimum percentage of work hours created by a development project be set aside for job-seekers from low-income communities within a city or county, especially low-income communities of color. These policies provide good jobs to local residents in communities that often experience unfair barriers to employment, including being denied job opportunities due to systemic racial discrimination in hiring practices (Cornejo, Chen, and Patel 2018; Quillian et al. 2017).

Cleveland passed Fannie Lewis Law requiring local and targeted hires on construction projects

In 2003, the Cleveland City Council passed the Fannie Lewis Law, named for its champion who served on the city council from 1980 until her death in 2008 (Tobin 2008).13 It required that 20% of the labor hours on public construction projects valued at $100,000 or more be performed by Cleveland residents, with 4% of the total hours set aside for low-income residents.

As a result, Cleveland construction workers were paid a cumulative $232 million for their work on publicly funded projects in the first 10 years that the law was on the books (WKYC Staff 2019). Between 2013 and 2017, Cleveland residents and low-income workers worked 24% and 9% of all construction hours, respectively, which was above and beyond the requirement (Ma 2019).

Ohio General Assembly passed law forbidding local hire laws

In 2016, the Ohio General Assembly forbid local laws requiring or incentivizing contractors to hire local construction workers.14 The city of Cleveland promptly responded by suing the state of Ohio, arguing that their local authority was protected by the Ohio constitution. Although a lower court and court of appeals granted and upheld a permanent injunction to keep the Ohio bill from being enforced, the Supreme Court of Ohio ultimately overruled them and the state law took effect in 2019 (Thompson Hine LLP 2019). Local labor leaders expressed their disappointment at the decision and their hope that contractors would take voluntary action to continue to give Cleveland’s construction workers better access to these publicly funded jobs going forward (CBCTC 2019).

In the same year they passed the bill targeting local hire laws, the Ohio General Assembly also preempted several other workers’ rights measures: fair scheduling, paid leave, and ride-sharing regulations.15 They also passed a law preempting local minimum wage increases, keeping a proposal to increase Cleveland’s minimum to $15 an hour off the ballot in 2017 (Pelzer 2016).16

Majority-white legislature took power away from communities that are majority people of color

This is another example of a state legislature stepping in to block welfare and equity-enhancing policy choices made by communities of color and the local lawmakers who represent them. In Cleveland, most residents (66.0%) are people of color and nearly half (47.9%) are Black. By comparison, 82% of state legislators in Ohio are white. Just 14% of Ohio state legislators are Black and 2% are Latinx. (See Appendix Table 5.)

Guaranteeing that 20% of construction work hours on municipally funded projects go to Cleveland residents, as the Fannie Lewis Law did, would substantially increase the chances of Black and Latinx workers being hired for this work. As shown in Figure B, nearly one in five construction workers living in Cleveland (18.8%) are Latinx, compared with 5.3% statewide. The trend is even more pronounced for Black workers, who account for about three in 10 construction workers in Cleveland (29.5%) and just 4.7% in Ohio.

Figure B

Prevailing wage: Kansas City, Kansas

In 2013, Kansas Gov. Sam Brownback signed HB 2069, a law banning all local governments in the state from requiring prevailing wages for workers on public construction projects. The law preempted prevailing wage ordinances in Sedgwick and Wyandotte Counties, disproportionately lowering the wages of Latinx, Black, and immigrant construction workers there.

Prevailing wage laws set wage standards in the construction contracts that cities or counties enter into with private contractors for city or state construction projects. They require that contractors pay their workers at least the prevailing wage in the city or county for the type of work being contracted. The policies’ definitions of “prevailing wage” vary from location to location, although they generally reflect a commonly held or dominant wage.

How prevailing wage laws protect workers—and benefit taxpayers

The rationale for prevailing wage laws is straightforward: Communities do not want public contracts to drive down local wage standards. Because contractors typically must bid to work on public projects, without a prevailing wage requirement firms may cut wages in order to win contracts. This not only harms employees of the individual construction firm, but it also pushes down wages throughout the industry as rival firms respond with similar cuts when making their bids. Prevailing wage laws preserve wage levels for construction workers and ensure that contractors compete for government projects based on efficiency, management skill, material costs, and the productivity of a firm’s employees.

In other words, prevailing wage laws help ensure that public funds are used to create strong middle-class construction jobs and pursue a high road of economic development that supports workers and good employers.

Research shows that construction workers in jurisdictions with prevailing wage laws earn substantially more than their counterparts in places without such laws. Eisenbrey and Kroeger (2017) find that construction workers in states with prevailing wage laws are typically paid 13% to 22% more per hour than construction workers in states without prevailing wage laws.

In addition to benefiting the workers on public projects, prevailing wage laws create several benefits for taxpayers. Projects under prevailing wages are more likely to hire locally, create increased tax revenue for local governments, and boost total economic activity (WP USA 2011; Mahalia 2008).

There is also a large body of evidence that prevailing wages achieve these benefits without increasing overall project costs (Hinkel and Belman 2020; Duncan, Phillips, and Manzo 2017). In a study of the preemption of prevailing wage laws in Kansas, Kelsay (2016) found no significant difference in construction costs before and after the repeal of prevailing wage laws. Prevailing wage laws can increase wages and still keep costs low because higher wages attract more highly skilled workers and incentivize investment in the apprenticeship of more skilled workers. These workers are more productive, making projects more efficient. Studies show that prevailing wages incentivize cost saving through greater management skill and decreased material costs.

How Kansas’s preemption of prevailing wage hurt workers

The 2013 Kansas state law HB 2069 nullified existing prevailing wage laws in Wyandotte County (home to Kansas City) and Sedgwick County (home to Wichita).

If these laws had not been preempted by the state law, pay would be higher for thousands of local construction workers in these counties, including many workers of color. For workers in Kansas City (which accounts for more than 90% of Wyandotte County’s population), the median annual wage of construction workers was $34,088 in 2020—13.0% less than the median Kansas construction worker’s wage, as shown in Table 6, and 10.0% less than the national median of $37,890.

A Kansas City prevailing wage law would lift pay for an estimated 6,209 construction workers in Kansas City. If their wages rose by the 13% difference (low estimate) identified by Eisenbrey and Kroeger (2017), it would translate to an hourly wage increase of $2.35, which translates to $4,886 annually for a full-time, full-year worker.

Table 6

Majority-white legislature took prevailing wage protections away from Kansas City’s majority-Latinx and majority-immigrant construction workforce

The construction industry’s workforce in Kansas City is primarily composed of people of color and is majority (61.7%) Latinx. More than half (54.1%) of construction workers in the city are immigrants. White construction workers in the state are typically paid more than other workers, earning an hourly wage of $22.59 compared with $17.49 for Latinx workers. While U.S.-born workers in Kansas City are paid $22.40 per hour, immigrant workers without U.S. citizenship are paid 32.9% less, at $15.03 per hour.

Whereas Kansas’s legislature is 92% white, and the state population overall is 75.9% white, Kansas City is majority (59.0%) people of color (see Appendix Table 6). The majority-white legislature’s preemption of prevailing wages denies Kansas City the ability to raise wages for its own workers, undermining a path for workers of color and immigrants to achieve greater economic security. Based on Eisenbrey and Kroeger’s 2017 analysis, a prevailing wage in Kansas City would mean a $2.02 hourly wage increase for a Latinx construction worker—up to $4,209 more annually. A prevailing wage would also benefit the city’s immigrant workers, who would earn $4,065 more annually working full time and full year.

The prevailing wage preemption is part of a larger pattern of workers’ rights preemption in Kansas

Despite the benefits of prevailing wages to workers and the state, state lawmakers in Kansas chose to interfere with localities’ ability to set their own labor standards. Unfortunately, this was not the only time during the last decade when they preempted local decision-making that would create good jobs using public dollars. In 2012, the state banned the use of project labor agreements on construction projects.17 In 2013, in addition to banning prevailing wages, Kansas prohibited local governments from requiring employers and contractors to give paid leave or any other employee benefit to their employees.18

This is part of a larger trend of workers’ rights preemption in Kansas, with the effects reaching well beyond public employees and contractors. The 2013 bill also prohibited local governments from increasing the minimum wage beyond the state minimum—which has remained stuck at the federal minimum wage of $7.25 per hour since 2009. Since 2013, state lawmakers have continued to interfere with local decision-making by passing a law in 2015 to preempt localities from regulating the gig economy and another law in 2016 to stop local fair scheduling measures.19

By banning cities and counties from enacting any prevailing wage ordinances, Kansas is suppressing pay for construction workers throughout the state, not just on public projects. State lawmakers are tying the hands of local leaders, preventing them from enacting policies that would strengthen pay for workers of all races and ethnicities. And with white construction workers being paid considerably more than Black and Latinx construction workers—even in cities where white construction workers are in the minority—the inability to set local standards only further entrenches racial inequities.

Some Kansas state legislators are pushing back

Some state legislators have pushed back on this troubling trend by introducing a bill during the 2021 session that would restore local government’s power to raise the minimum wage.20

Labor peace agreements: Milwaukee, Wisconsin

In 2018, the Wisconsin State Legislature passed a bill forbidding local governments from requiring labor peace agreements for publicly funded projects. Through these agreements, private employers agree to remain neutral if their workers decide to organize a union.

Prior to 2018, municipalities in Wisconsin had the right to insist on labor peace agreements for public projects. Labor peace agreements (LPAs) require private employers working on projects or in facilities that a local government has a “proprietary interest” to reach a reciprocal agreement with unions, with the union typically foregoing the right to strike.

Governments may have a “proprietary interest” in projects funded by public dollars, projects they will receive loan repayments or rent from, or projects they have another large financial stake in. In particular, many LPA agreements apply to service-sector workers, including retail, janitorial, food service, and hospitality workers at airports, hotels, casinos, arenas, and convention centers (U.S. Chamber of Commerce 2016).

In exchange for unions giving up the bargaining power that the threat of a work stoppage affords them, employers may make a range of concessions about how they would respond if and when the workers organize a union, including agreeing to a simple card check rather than forcing an election, remaining neutral rather than publicly opposing the union effort, allowing organizers to access the workplace, and providing organizers with employee contact information.

Why Wisconsin workers need labor peace agreements

Unions are good for workers. Union workers in food preparation and related occupations, for example, had higher weekly earnings than their nonunion peers nationwide, making $604 compared with $519 in 2019 (BLS 2021a). Similarly, union workers in building and grounds cleaning and maintenance occupations are typically paid $692 per week compared with $567 for their nonunion peers.

Unfortunately, unions in Wisconsin have been decimated thanks in no small part to anti-union legislation signed into law by Gov. Scott Walker after his election in 2010. As a result, workers in Wisconsin today have less bargaining power than ever to push for higher wages and better working conditions.

Until the 2010s, union density in Wisconsin was consistently higher than in the U.S. overall, but the anti-union measures severely undercut workers’ ability to form and maintain unions in Wisconsin. From 2010 to 2017, Wisconsin experienced the largest decline in unionization rates of any state in the country (Cooper 2018). By 2018, Wisconsin’s union coverage had already declined by 13.5 percentage points since 1989, as shown in Figure C.

Figure C

Workers seeking to unionize face additional challenges from employers. Under current federal labor law, it is perfectly legal for employers, who already inherently have more power than their workers, to engage in a variety of activities that unfairly undermine organizing campaigns. Employers subject employees to mandatory “captive audience meetings” and one-on-ones with supervisors where they promote anti-union messages. They ban union organizers from the workplace and, collectively, they spend about $340 million annually on union-avoidance consultants (McNicholas et al. 2019).

In addition to these legal tactics, employers also frequently engage in illegal anti-organizing activities, as enforcement against these activities is lax and penalties trivial.

LPAs create a more level playing field so that workers are able to make their own decisions about unionizing.

Wisconsin state legislators took away localities’ right to require labor peace agreements

However, the right to require LPAs was taken away from Wisconsin cities and counties with the passage of Assembly Bill 748 in 2018. Like the Michigan “Death Star Bill” discussed above, AB 748 was far-reaching. In addition to forbidding LPA requirements, AB 748 limited the authority of local jurisdictions to enact other labor standards—including fair scheduling and employee benefits requirements and bans on employers asking about salary history.

It is worth noting that the majority-white state legislature that acted to preempt LPAs is not representative of the population of Wisconsin’s largest city, Milwaukee (see Appendix Table 7). Two in five Milwaukee residents (40.9%) are Black and one in five (20.1%) are Latinx, compared with just 5% and 2%, respectively, of state legislators.

State Rep. Rob Hutton, one of the original co-sponsors of the senate corollary to AB 748, specifically referenced four counties in his testimony to the state senate—Milwaukee, Dane, Brown, and Eau Claire (Hutton 2018). The populations of the counties he chose to mention are among the youngest and most diverse in the state.

In Milwaukee County, 26.1% of the population identify as Black, more than twice any other county in the state. In Dane County, 5.9% identify as Asian, making it the county with the largest Asian population in the state (WI DSC 2021). All four counties are among the 10 youngest (by median age) of the state’s 55 counties. Now that AB 748 is in effect, it is reducing the tools available to raise labor standards for workers of color and younger workers.

Milwaukee workers could particularly benefit from LPAs

Few cities in Wisconsin are in greater need of the tools preempted by AB 748 than its largest, Milwaukee. Income inequality in Milwaukee County grew by more than 21.9% during the 2010s (U.S. Census Bureau 2020). The median income of a Black household in Milwaukee is only 42% of the median income of a white household, the biggest income gap in the country. The Black poverty rate—33.4%—tops all large metropolitan areas in the United States. Nearly three-quarters (72.2%) of Black schoolchildren in Milwaukee go to “hypersegregated” schools,21 the highest share in the country (Levine 2020).22 The situation is so dire that in 2019 Milwaukee County officials declared racism a public health crisis (Pierre 2019).

Given the tremendous inequity and concentrated poverty among communities of color in Milwaukee, city leaders should be able to use every tool at their disposal to boost the wages, working conditions, and bargaining power of local workers. Allowing the city to require labor peace agreements when the city has a financial interest in a project or facility would ensure taxpayer funds are supporting good jobs that strengthen the community and give workers a voice.

Requiring that public contractors and others negotiate LPAs in which they forego some amount of interference if their workers consider coming together in a union certainly does not seem to be an unreasonable or burdensome requirement for those benefiting from receiving public contracts. When local governments cannot set even minimal standards for the contractors with whom they do business and the facilities they are financially intertwined with, their ability to improve economic conditions for workers and communities is severely limited.

Collective bargaining over employment conditions: Chicago, Illinois

In 1995, the state legislature passed a law preventing the Chicago Teachers Union (CTU) from negotiating with Chicago Public Schools (CPS) over numerous conditions of employment, including class sizes and the length of the school day and year. In a rare reversal of preemption, in 2021, the CTU regained this long-preempted right. This represents an opportunity for collective bargaining to advance the common good in the Midwest’s largest city.

In 1995, the Republican-controlled Illinois legislature passed the Chicago School Reform Amendatory Act. In addition to transferring considerable control over Chicago Public Schools to then-Mayor Richard M. Daley, the law changed the allowable scope of negotiations between the Chicago Teachers Union (which at the time represented more than 30,000 teachers) and CPS (Haney 2011). The state law prohibited CPS and CTU from negotiating over nearly all noneconomic issues, including assignments, technology, class sizes, and outsourcing.

Illinois’s preemption law was yet another example of a majority-white state legislature limiting the rights of a community that is majority people of color

By targeting CPS in particular, Illinois lawmakers were interfering with a school system that serves communities of color and employs workers of color. In 2021, 36.0% of Chicago students were Black and 46.8% Latinx, compared with 16.6% and 26.6%, respectively, in the state as a whole, as shown in Figure D. Indeed, while Chicago Public Schools enroll just 17.8% of Illinois’s K–12 students, they serve 38.5% of Illinois’s Black students, 31.3% of the state’s Latinx students, 27.9% of English learners, 28.8% of students from low-income families, and 30.2% of homeless students (Illinois State Board of Education 2020).

Similarly, a Chicago teacher is more than three times as likely to be Black, and nearly three times as likely to be Latinx, as the state teacher workforce as a whole. By comparison, just 18% of Illinois state legislators are Black and only 8% are Latinx (see Appendix Table 8).

Figure D

Damage was done over the many years the law was in effect

The inability of CTU and CPS to negotiate over class sizes has had an impact; despite having a greater share of low-income students, homeless students, and English learners than Illinois schools overall, Chicago Public Schools have a student-to-teacher ratio 16% higher than the state average in elementary schools and 11% higher in secondary schools. With the exception of kindergarten, class sizes in the district are noticeably larger at every level: 18% larger in 3rd grade, 17% larger in 6th grade, and 19% larger in high school. As one would expect from a school district with higher-than-average class sizes and other challenging working conditions, the annual teacher retention rate in Chicago Public Schools is 6% below the state average (Illinois State Board of Education 2020).

The preempted rights of CPS and CTU to negotiate over so many important concerns also came into play during the COVID-19 pandemic. In December 2020, the Illinois Educational Labor Relations Board (IELRB, which oversees operation of collective bargaining in Illinois public schools) denied CTU’s request for an injunction to force CPS to negotiate over plans to reopen schools in 2021. The IELRB specifically cited the curtailed bargaining rights in Chicago as the reason it denied the request (Masterson 2020).

Nevertheless, the Chicago Teachers Union persisted in advocating for Chicago’s teachers and students

In response to decades of understaffing and a lack of CPS attention to the needs of its students, the Chicago Teachers Union over the past decade has revitalized itself and, in the process, helped to establish the concept known as “Bargaining for the Common Good,” a strategy of union action that emphasizes the union’s commitment to the welfare of everyone in a community, not just its own members (McCartin and Najimy 2020). As a consequence of a 2012 strike, for example, CTU managed to win a collective bargaining agreement that included the right of students to have textbooks at the beginning of the school year, a demand of no financial benefit to CTU members but one that demonstrated a real willingness to use worker power to support their communities (Kamper 2018). A short 2016 strike produced small gains on class size issues, and in a 2019 strike, the union demanded (but did not win) a commitment by the city and the school district to provide housing for all the district’s homeless students (Potter and Inouye 2021).

The Illinois Educational Labor Relations Act, which governs collective bargaining for teachers in Illinois, was created under the presumption that “[u]nresolved disputes between the educational employees and their employers are injurious to the public, and…adequate means must be established for minimizing them and providing for their resolution.”23 CTU’s strikes over the last decades have, at least in part, been the consequence of the 1995 law limiting their ability to negotiate over noneconomic matters; without the ability to compel the employer to negotiate in good faith at the bargaining table, CTU was forced to resort to strikes in order to address their legitimate concerns.

April 2021: The preemption law was reversed

On April 2, 2021, Illinois Gov. J.B. Pritzker signed House Bill 1559, which reversed the 1995 law and put Chicago teachers and CPS on the same footing as other educator unions and their negotiating partners across the state. In a statement, CTU President Jesse Sharkey said, “We now at last bargain from a level playing field—with the ability to at last reject the chronic classroom overcrowding, incompetent and wasteful third party contracting, and the desperate shortage of school nurses, social workers, counselors and other chronic staffing needs that have plagued our schools for years” (CTU 2021).

With their preempted rights restored, CTU is now in a stronger position to advocate for its members and the communities they serve, since their working conditions are also their students’ learning conditions. Full and fair collective bargaining is a proven means of improving working conditions, and CTU members have demonstrated their desire to advocate for the children and families they serve as well.

Rent control: Chicago, Illinois

In 1997, Illinois lawmakers passed a law prohibiting cities and counties from establishing local rent control policies. Rent control is one policy tool of many that should be available to local lawmakers aiming to improve affordable housing options in their communities, especially in cities facing a housing crisis like Chicago. In January 2021, Illinois lawmakers introduced a bill to repeal the rent control preemption policy.

In 1997, Illinois state lawmakers passed the Rent Control Preemption Act, prohibiting local rent control measures—policies designed to protect tenants from excessive rent increases. The preemption bill was enacted even though no advocates or local governments had made any serious effort to pass rent control at that point (Dukmasova 2017).24

The spread of rent control preemption across the states

The legislation was likely motivated by business interests in the American Legislative Exchange Council, which has widely promoted model legislation for rent control preemption to state lawmakers (Dukmasova 2017; ALEC 2013). In fact, rent control was one of ALEC’s earliest targets (Winig and deVuono-powell 2019).

Today, most states (including every state in the Midwest except Nebraska) prevent local governments from placing restrictions on excessive rent increases (LSSC 2021b). In contrast, only one state, Oregon, has a statewide rent control policy, and only four states—plus the District of Columbia—contain localities with rent control laws in place: New York, New Jersey, California, and Maryland (Rajasekaran, Treskon, and Greene 2019).25

Effects of Illinois’s 1997 rent control preemption bill

Although the bill did not immediately undermine any existing municipal laws, the effects of the 1997 Illinois bill have become more acute in recent months. In April 2021, Cook County’s First District Appellate Court struck down Chicago’s “Keep Chicago Renting Ordinance,” arguing it violated the Rent Control Preemption Act. The ordinance had been enacted in 2013 to protect tenants living in foreclosed properties from displacements, by requiring the new owners to offer them a lease extension with a rent increase of no more than 2% or help pay their moving costs (Dukmasova 2017).

In addition, the prohibition on local rent control measures has reduced the policy tools available to local governments during the COVID-19 pandemic. Nationwide in 2020, Black renters were twice as likely as white renters to report being behind on rent payments (31% compared with 14%, and 26% for Latinx renters) (Acosta, Bailey, and Bailey 2020). And the crisis is still ongoing. In early 2021, more than 20% of Illinois households still struggled to pay rent (JCHS 2021).

Housing policy and racial justice

As documented earlier in this report, racist housing policy in the Midwest has been used to promote segregation and concentrate wealth and public investment in white communities. While explicitly racist practices, such as redlining, have been outlawed, exclusionary housing policies continue to segregate communities while reducing the overall housing supply and raising costs (Gyourko and Molloy 2015; Rothwell and Massey 2009).

Exclusionary zoning is a particularly harmful practice, and it is unfortunately only one component of a multifaceted housing affordability crisis across the country, which affects renters especially acutely (JCHS 2021). In Illinois, more than a quarter (27%) of renters have extremely low incomes, with incomes that are either at or below the federal poverty line or less than 30% of their area’s median income (NLIHC 2020).26 Among these very-low-income individuals, over two-thirds spend more than half of their income on rent.

The federal government defines a household as being “cost-burdened” if they spend more than 30% of their income on housing. As shown in Figure E, nearly three in 10 low-income Illinois households (households whose income is 51–80% of the area median), and the vast majority of extremely-low-income households, are cost-burdened.

Figure E

High rents limit the housing options available to low- and moderate-income families, sometimes displacing them from the neighborhoods where they live and preventing them from moving to nearby or other preferred neighborhoods. This displacement can be related to gentrification, although the two phenomena can and do occur separately (NLIHC 2019).

As of 2017, the Urban Displacement Project (2021) categorized more than a fifth (22%) of Chicago’s low-income neighborhoods (those with median household incomes at or below 80% of the regional median) as being at risk of gentrifying. Even without gentrification, 16% of Chicago’s low-income neighborhoods were seeing low-income households displaced. At the same time, the majority (59%) of the city’s moderate- and high-income neighborhoods (those with incomes above 80% of the regional median) already had rents so high that many low-income families could not afford to move there.

How rent control policies can help

Rent control, combined with policies that increase the supply of affordable controlled units, can help alleviate the major financial burden of housing costs for some families, especially those who are already economically precarious. It offers tenants greater stability by ensuring that they can afford, or at least predict, their rent.

Rent control policies in place today are primarily aimed at rent stabilization—capping rent increases, often at a percentage tied to inflation. While the specifics of rent control policies differ, they generally do not establish a long-term price ceiling, and they typically allow for rent increases during vacancies or other circumstances (for example, following substantial upgrades to the property). Rent control often applies only to older buildings or buildings with higher numbers of tenants (Rajasekaran, Treskon, and Greene 2019). These policies also usually include provisions intended to ensure that landlords can still make a reasonable profit and to avoid decreasing the overall housing supply.

Research shows that existing rent control policies have decreased rents and that tenants of rent-controlled units are less likely to move out, although there have been conflicting findings as to whether rent control increases or decreases rents for noncontrolled units (Rajasekaran, Treskon, and Greene 2019). There is also evidence that by encouraging tenant stability, rent control helps curtail gentrification of communities (Autor, Palmer, and Pathak 2014).

Rent control works best when combined with other policies to promote equity

Still, more research is needed to determine how to best design rent control policies that promote racial and economic integration and equity. Past research suggests that by primarily generating benefits for existing residents, rent control does not adequately target low-income individuals (Sturtevant 2018). There also isn’t clear-cut evidence that people of color access and benefit from rent control enough to reduce inequality (Rajasekaran, Treskon, and Greene 2019).

This does not mean that local governments should not pursue rent control. Rather, they should also intentionally explore specifications that address racial and economic disparities head on and use rent control in tandem with other policies that can make housing more affordable.

Further, certain policies should be used in conjunction with rent control to mitigate some of the unintended side effects of rent control. For example, since there is evidence that landlords become worse at maintaining properties under rent control, local governments should also be empowered to incentivize maintenance and enforce housing code violations (Rajasekaran, Treskon, and Greene 2019).

Policymakers should prioritize eliminating exclusionary zoning practices and increasing the supply of affordable housing through inclusionary zoning policies that require or incentivize private developers to make some share of newly constructed housing affordable. Since the federal government has fallen short in addressing the housing crisis, it is particularly important that state governments not stand in the way of local governments working to increase and maintain affordable housing options and to stabilize local housing markets (LSSC 2021b). In fact, Chicago has taken steps in this direction with an ordinance requiring certain development projects to include some affordable housing units (Chicago DOH 2021).

Preemption repeal introduced

In January 2021, Illinois state lawmakers introduced a bill to repeal rent control preemption. The bill was championed by Lift the Ban, a Chicago-based coalition that includes community groups, tenants unions, and labor unions (Groeger 2019).27 While a similar bill was introduced first in 2017 and again in 2019, this time the Housing Committee voted to advance the preemption repeal bill. Advocates—including Rep. Will Guzzardi (D-Chicago), who introduced the bill—have attributed some of the bill’s recent momentum to the COVID-19 pandemic (McClelland 2021).

Eviction moratoriums and emergency rental assistance proved to be critical during the pandemic, shining a light on the importance of using policy to promote affordable and secure access to housing. Early in the pandemic, the Chicago City Council Latino Caucus called directly on Gov. Pritzker to use emergency powers to lift rent control preemption (Bloom 2020). Although the governor had campaigned on lifting the ban, he has not acted on the issue while in office (Bennett and Duncan 2020).

Repealing state preemption of rent control would give local governments one more tool to address the housing crisis that is acutely affecting low-income households and displacing Black Chicagoans. State lawmakers should heed the calls of advocates for preemption repeal and let local lawmakers decide whether rent control could be used to help maintain affordable housing in their communities.

Preemption and the pandemic

The COVID-19 pandemic deepened existing racial inequalities. The virus has taken the lives of Black, Indigenous, Pacific Islander, and Latinx people at higher rates than white people (APM 2021). This inequality of health outcomes is coupled with an economic crisis that is disproportionately affecting communities of color.

How the COVID crisis has disproportionately harmed communities of color

As a result of systemic racism, Black and Latinx workers have long endured economic conditions that left them particularly vulnerable to this crisis. They are paid less, are more likely to be living in poverty, and are less likely to have access to paid sick leave than white workers (Gould and Wilson 2020; Gould, Perez, and Wilson 2020). Black and Latinx workers are also less likely to be able to work from home—meaning they are more likely to have been laid off from in-person work or to be exposed to COVID-19 on the job (Gould and Kandra 2021).

Even as the economy improves, workers of color are experiencing a less rapid recovery than their white counterparts. The unemployment rates for Black and Latinx workers were still 9.2% and 7.4% in June 2021, compared with 5.2% for white workers (BLS 2021c). These inequalities were embedded in the economy long before the pandemic hit and they will persist unless policymakers at all levels government address the unique challenges these communities face.

The crisis also worsened America’s already stark economic inequality, irrespective of race. Nearly 8 million lower-wage workers lost their jobs between 2019 and 2020, while higher-wage workers actually gained 1 million jobs (Shierholz 2021).

Low-wage industries—leisure and hospitality in particular—experienced particularly sharp employment declines; however, there was inequality within industries as well. A recent Bureau of Labor Statistics working paper found that, in many industries, employment among the lowest-paid workers suffered the most between April 2020 and May 2021 (Dalton et al. 2021). Already vulnerable workers in low-wage jobs were also especially likely to become “part-time for economic reasons” during the pandemic—meaning they have been able to get only part-time hours although they would prefer to work full time.

Preemption made a bad situation worse for those who were suffering the most

During the COVID-19 pandemic, the existing policy landscape and subsequent policy response had important implications for the health and economic welfare of communities. However, all too often state lawmakers stepped in to foil local leaders’ efforts to keep their communities safe.

Misuse of preemption prevented localities in some states from enacting policies that would have made them better equipped to deal with the pandemic, such as paid sick leave laws, eviction moratoriums, and municipal broadband. As a result, many localities were unable to ensure that their residents had access to sick leave during the pandemic, secure housing during an economic crisis, and adequate internet access when needed for work and school (Haddow et al. 2020). We provide just a few examples below.

Lawmakers have restricted localities from providing public broadband access. Six states in the Midwest have put in place barriers to establishing municipal broadband services: Iowa, Michigan, Minnesota, Missouri, Nebraska, and Wisconsin (LSSC 2021a). Broadband access is one of the many policy areas in which the corporate-backed ALEC has promoted a model bill encouraging the abuse of preemption (ALEC 2017).

Nebraska has particularly restrictive laws. Despite inadequate broadband access in much of the state, state legislators rejected an amendment to a budget bill in April that would have repealed this preemption and allowed local governments to provide internet services (Stoddard 2021). Internet access is critical infrastructure worthy of public investment. This is undeniable in the aftermath of a public health crisis in which students were suddenly attending school on the internet and working from home became more common.

Lawmakers acted to give corporations immunity, restricting localities’ ability to hold them accountable. ALEC was also at the center of the push for legal immunity for corporations from being held accountable for endangering workers and consumers. ALEC made coronavirus-specific adjustments to model corporate immunity bills that had long been a priority for them (Lacy 2020).

On top of the inadequate workplace safety response from the Trump administration, corporations sought to avoid accountability from the standards that did exist, at all levels of government (Dixon 2020). State legislatures and governors across the country ushered in corporate immunity across the country, some as early as May 2020 (Haddow 2021). In the Midwest, Iowa, Kansas, Missouri, and Ohio all passed bills that limited local government’s ability to hold corporations accountable to health and safety standards.28

Lawmakers preempted local public health efforts. Across the country, state lawmakers intervened in local public health measures, stymieing efforts to protect communities and workers while creating unnecessary confusion.

While preempting public health measures is particularly abhorrent during a pandemic, this practice predates COVID-19. A 2019 survey of local health officials reported that more than 70% had delayed or abandoned their efforts to enact local public health policies because of the shadow of state preemption (Rutkow et al. 2019).

Below are some examples of states undermining local health measures in the Midwest.

Blocking mask mandates

• Nebraska’s governor threatened to withhold federal aid from local governments that imposed mask mandates and other public health standards (Haddow 2021).
• In August 2021, Missouri’s attorney general sued Columbia Public School and its board of education over the district’s mask mandate (McKinney 2021).
• Iowa’s state legislature also imposed a ban on school district mask mandates in May 2021.29

Divesting local public health authorities of their power

• In Missouri, state lawmakers have considered several bills that would restrict the ability of local public health authorities to call for business closures or states of emergency. Corporate interests representing Missouri’s retail and restaurant industries back these bills, while many health and environmental groups have come out in favor of preserving local authority (STLHRC 2021).
• In Kansas, the governor signed a bill in March 2021 limiting the power of local health authorities to enact measures including mask mandates and limits on gatherings.30
• In spring 2021, state legislatures in Ohio, North Dakota, and Indiana all overrode their governors’ vetoes to enact limits on local health authorities.31

With varying vaccination rates and localized outbreaks, targeted local responses will remain an important policy tool for containing the COVID-19 pandemic. If local officials are unable to enact response measures, it will only prolong the pandemic and exacerbate harm in future emergencies—particularly for already marginalized groups. The result will be that preemption, once again, reinforces the existing racial and economic inequalities that plague communities.

Conclusion

In the cases outlined here, Midwestern state lawmakers prevented local action that would have improved economic conditions for millions, particularly low-income workers, women, people of color, and immigrants. These are groups that American institutions have systemically harmed and that suffered disproportionately during the COVID-19 dual public health and economic crisis (Wilson 2020).

During this pandemic, preemption has too often stifled local responses, generated confusion, and kept cities and states from working together to respond appropriately. Now, as local governments are looking to invest in their communities using federal funds from the American Recovery Plan, preemption has limited the policy tools that local governments can use to tie public investment to good jobs, equality, and worker justice, such as local hire agreements, prevailing wage laws, and labor peace agreements.

As noted earlier, present-day efforts to preempt local measures to strengthen workers’ rights are rooted in historical policies and structures that limited the rights and freedoms of Black and Brown people and entrenched white supremacy. Segregation divides communities in the Midwest to this day. Preemption of local workers’ rights policies, underinvestment in public resources, and diminishing union coverage all reinforce the racial inequality promoted by segregation.

Countering the misuse of preemption to prevent local policies that promote racial and economic justice is a wide-reaching challenge that cuts across policy issues and geographies. Despite the strength of preemption’s hold on the local policy landscape, there is still much that can and should be done to better empower communities.

Local governments, even if they are not immediately successful, should use lawsuits and other tools at their disposal to challenge state preemption, as Cleveland did to try to protect their local hire law. The examples of efforts to overturn preemption of rent control and the Chicago Teachers Union’s bargaining rights in Illinois provide hope and should be replicated.

State lawmakers also have the power to repeal preemption, restore local authority, and allow localities to make the choices that best suit their needs. Over the last few years, bills have been introduced across the country to do just that, including a 2020 Indiana bill that would allow local governments to require landlords to participate in housing assistance programs, a 2019 Ohio bill repealing minimum wage preemption, and the 2020 Michigan bill repealing the “Death Star” preemption bill discussed above.32

Undoing harmful forms of preemption across the country, and especially in the Midwest and the South, is a critical step in promoting progress. By failing to do so, present-day Midwestern lawmakers are reinforcing the deep inequality that their predecessors’ racist actions incubated throughout the region.

Acknowledgments

The authors would like to thank Local Solutions Support Center for their continued partnership and generous support for this project. We thank Krista Faries for her contributions as lead editor for this project; and thank Kyle Moore, Naomi Walker, and Josh Bivens for their thoughtful comments. We also thank the research, grassroots, and labor organizations across the Midwest who served as thought partners on this report for their work advancing racial and economic justice in the region. Finally, we thank the workers and communities whose lives are impacted by these policies every day and who are leading organizing and advocacy efforts to promote shared prosperity.

Appendix tables

Appendix Table 1

Appendix Table 2

Appendix Table 3

Appendix Table 4

Appendix Table 5

Appendix Table 6

Appendix Table 7

Appendix Table 8

Notes

1. The “second Klan” was a new Ku Klux Klan organization, inspired by but not organizationally linked to the post–Civil War Klan.

2. There is voluminous scholarship on this practice. Sugrue 1996 is a good starting point to learn more. For discussion of the development of Black political institutions in segregated cities, see Lang 2009.

3. Gabriel Winant (2021) documents this effect in Midwest-adjacent Pittsburgh.

4. A number of the charges in the suit have since been dismissed by the court, but elements of the suit are still pending. For recent developments, see ABC 2021.

5. The six states above the average were Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. Iowa, Kansas, and Missouri were below the average.

6. According to the 2019 American Community Survey, from 2015–2019 the poverty rates in St. Louis, Kansas City, and Missouri overall averaged 20.5%, 16.9%, and 13.2%, respectively.

7. MCL 123.1381–123.1396.

8. 2020-SB-0960.

9. Ind. Code § 22-2-16-3.

10. Ind. Code § 22-2-2-10.5.

11. Ind. Code Ann. § 5-16-7.2-5; Ind. Code. § 8-2.1-19.1-4.

12. Ind. Code §§ 22-2-16-3.

13. Ordinance No. 2031-A-02 Chapter 188.

14. Ohio Rev. Code 9.75.

15. Ohio Rev. Code § 4113.85; Ohio Rev. Code § 4925.09.

16. Ohio Rev. Code § 4111.02.

17. K.S.A. § 16-2003.

18. K.S.A. § 12-16,130.

19. K.S.A. § 8-2702; K.S.A. § 12-16,130.

20. KS HB 2305.

21. Hypersegregated schools are schools “in which 90 percent or more of the students are minorities” (Levine 2020 citing education sociologist Gary Orfield).

22. Estimate based on 2014–2018 American Community Survey microdata.

23. 115 ILCS 5/.

24. 50 ILCS 825/.

25. OR SB 608.

26. Area Median Income (AMI) is used to determine income eligibility for affordable housing programs, reflecting geography and family size. In this analysis, the household income groups are based on metropolitan-area median family incomes and the aggregate statewide nonmetro median family income for households in nonmetropolitan areas.

27. IL HB 0116.

28. IA SF 2338; KS HB 2016; MO SB 56; OH HB 606.

29. IA HF 847.

30. KS SB 40.

31. OH SB 22; ND HB 1323; IN SB 0005.

32. IN HB 1012; OH HB 34; 2020-SB-0960.

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Introduction: Prosecutors are increasingly pursuing employer crimes against workers

Increasingly, district attorneys (DAs), state attorneys general (AGs), and other criminal prosecutors1 are bringing charges against employers for wage theft,2 misclassification and payroll fraud,3 workplace safety hazards, sexual assault, and human trafficking, among other crimes against workers. This development represents a shift, because historically, crimes against workers have not generally been prosecuted. More often, the criminal justice system has intervened to protect employers; for example, a worker stealing from an employer would likely face charges, while an employer committing wage theft likely would not. Yet state and local prosecutors have unique tools and an important role to play in protecting workers. Many are taking on this function as an enforcement priority, and more should get involved in this area.

The involvement of prosecutors is timely and has the potential for significant impact. As explained in this report, violations of workplace laws are widespread; state and federal labor agencies face serious limitations from a lack of resources, limited authority, and more; and private lawyers are often blocked from bringing cases because workers have been forced to sign arbitration provisions waiving their right to sue in court.

To familiarize prosecutors and worker advocates with this important work, this report provides:

• background on the increased involvement of criminal prosecutors in workers’ rights enforcement, the context in which such activity occurs, and a discussion of the rationale for such prosecutions
• descriptions and examples of the types of cases that have been brought
• discussions of several considerations related to such cases, including applicable statutes, sources of case referrals, criminal justice concerns, and funding sources
• appendices that include sample pleadings from recent cases, compilations of case reports, more detailed information about two state funding mechanisms, and tips for prosecutors and worker advocates on getting started in this work

Background: The growing involvement of prosecutors in addressing employer misconduct emerges in the context of widespread violations of workers’ rights and fits squarely within a prosecutor’s function

Increased involvement of prosecutors in workers’ rights violations has taken form in several ways. Offices have brought various types of cases. Some offices have created dedicated units or subunits to do this work, while others have handled individual cases as they have arisen. Increased prosecutor activity has emerged within a landscape in which violations of workers’ rights are widespread and avenues for redress are inadequate. In this context, there are numerous reasons for prosecutors to actively pursue employer crimes against workers.

Criminal prosecutors across the country are addressing a wide range of employer crimes against workers

A set of federal and state laws extend to most employees in the United States a bundle of protections covering wages paid and hours worked (wage and hour laws), safety hazards in the workplace (safety and health laws), economic security in the event of injury or unemployment (workers’ compensation and unemployment insurance laws), discrimination and harassment (equal opportunity laws), and other workplace conditions. In recent years, a powerful new enforcer has entered the picture in numerous jurisdictions: District attorneys and other prosecutors have brought cases involving employer-committed crimes against workers4—crimes including wage theft; labor trafficking; creating conditions causing predictable, preventable workplace fatalities and serious injuries; payroll fraud, including failure to pay unemployment insurance (UI) taxes and/or to procure workers’ compensation insurance, and/or misclassification of workers; prevailing wage violations;5 retaliation and witness intimidation; and workplace sexual assault (CPR n.d.; HPM Digital Team 2018; Graves 2020; Kashinsky 2019; Wash. AG 2018; Reyes 2021; Vosseller 2019; Mass. AG 2019; Byars 2017).

These cases have been brought in a range of jurisdictions, including in California, Colorado, Maine, Massachusetts, Michigan, Minnesota, Montana, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Texas, Virginia, and Washington (Intarasuwan 2018; Pace 2019a, 2019b; Byars 2017; Kashinsky 2019; Byrne 2019; Mass AG 2019; AP 2019; Graves 2020; Christian 2019; N.J. AG 2019; Byfield 2019; Warsmith 2019; Pa. AG 2019; R.I. AG 2019; R.I. AG 2020; HPM Digital Team 2018; Haynes 2019; Wash. AG 2018).

Several district attorneys have created dedicated units or subunits specifically for this function, including San Diego DA Summer Stephan in 2021; Queens (N.Y.) DA Melinda Katz and San Francisco DA Chesa Boudin in 2020; Philadelphia DA Larry Krasner in 2019; and more. (Christian 2020; S.D. DA 2021; S.F. DA 2020; Reyes 2019).

In Nassau County (N.Y.), the Labor Unit is located within the Rackets and Enterprise Crime Bureau (Nassau DA n.d.) and in Brooklyn (N.Y.) the Labor Fraud Unit is located within the Frauds Bureau. (Brooklyn DA n.d.). In the New York State AG’s office, the Labor Bureau has a dedicated criminal section (N.Y. AG n.d. ). Staff in these units include lawyers with labor law and/or criminal prosecution experience; some also have access to investigators and forensic auditors.

By creating a dedicated unit, DAs and AGs enable assigned lawyers to develop expertise in the subject matter and handling of these cases, which require a different approach than many other criminal cases. These cases often entail building relationships with worker organizations, conducting extensive interviews with workers who may be reluctant witnesses for a variety of reasons (including fear of retaliation or potential immigration consequences for themselves or family members), and thoroughly reviewing and auditing payroll and other employer records. Creation of a dedicated unit also allows for lawyers to build relationships with other government agencies (for example, state and local labor departments) and stakeholders (such as unions and other worker organizations) that are potential sources of cases. Finally, lawyers in a dedicated unit are able to develop legal expertise in the overlap between labor and criminal law, as well as knowledge regarding common violations and problematic industries. A dedicated unit also institutionalizes the work within an office, thus promoting the likely longevity of a DA’s office involvement in such prosecutions (Gerstein 2020). Professor Cesar Rosado Marzán examined the topic and specifically recommended specialized prosecutors for this work, given “the vulnerable nature of the workers who seek their aid” and potential immigration and other consequences that could result from nonspecialized prosecutors handling such cases (Rosado Marzán 2020).

Even without a dedicated unit, prosecutions of employer crimes can be added to existing divisions or bureaus, such as those handling economic or financial crimes. In Boulder, Colorado, for example, wage theft cases are handled within the Community Protection Division, which handles the office’s economic crimes cases. Indeed, offices without a dedicated unit have played a leadership role on this topic within their states. Within the last few years, Boulder County DA Michael Dougherty, along with the Colorado District Attorneys’ Council, co-hosted a training on prosecution of wage theft and human trafficking;6 he also played an instrumental role in promoting stronger anti-wage theft legislation in his state (Boyd 2019).

Similarly, Orange County (New YOrk) DA David Hoovler announced a new focus on labor crimes by his office, and held a training for fellow prosecutors on the topic (Yakin 2019; Mid Hudson News 2020). The Alameda (California) District Attorney’s Office started a labor trafficking task force in 2015 (H.E.A.T. Watch n.d.). The Westchester (New York) district attorney’s office has a multilingual hotline for the public to report a number of crimes typically affecting immigrants, including wage theft (Westchester DA 2021). The Manhattan District Attorney’s Office in 2017 used criminal forfeiture funds obtained through settlements with international banks to make grants to several organizations serving underserved communities, including over $1.5 million to the New York Committee for Occupational Safety and Health to provide outreach and training regarding wage theft, health and safety, and more (NY Cty. DA 2017).

In several jurisdictions, state attorneys general have used their criminal prosecution authority to pursue employers for wage theft and other crimes against workers (Gerstein 2020). In Rhode Island, for example, where the attorney general is the sole criminal prosecutor for the state, AG Peter Neronha proposed stronger anti-wage-theft and misclassification legislation during the 2021 legislative session; his office brought three wage theft criminal prosecutions in 2020, apparently the first ever brought within the state (R.I. AG 2021).

The increased involvement occurs in the context of high rates of violations of workplace laws and inadequate enforcement resources

Although violations of workplace law are widespread, resources to address such violations are grossly insufficient. Familiarity with this landscape—extensive, largely civil workplace violations with inadequate deterrence—helps one understand the scope of the enforcement chasm. The statistics below demonstrate the overall context in which employer crimes occur. Simply put, routine and widespread violations, inadequate enforcement resources, low union density, and other factors allow too many exploitative employers to operate with impunity. The statistics below do not suggest that all cases should be handled criminally, of course; criminal prosecutions should be reserved for the most serious violations and, of course, brought in situations in which intent and acts can be proven beyond a reasonable doubt.

• Wage theft. A 2017 study on minimum wage violations in the 10 most populous state found that each year, 2.4 million workers, or 17% of the low-wage workforce in these states, reported being paid less than the applicable minimum wage, losing an average of $3,300 per year (nearly a quarter of their earned wages) (Cooper and Kroeger 2017). State-specific studies of wage theft in Colorado, Iowa, New Mexico, New York, and Ohio have found similarly high rates of violations while examining a broader range of workplace infractions (Gordon et al. 2012; Schrank and Garrick 2013; Shields 2019; Sen 2016; Stiffler 2019). According to a 2020 Washington Center for Equitable Growth study, Black, Latinx, noncitizen, and women workers experience higher rates of wage theft (Fine et al. 2020).

• Workplace safety and health. The Occupational Safety and Health Act (OSH Act) was enacted in 1970 to ensure that workplaces are free of hazards that kill or injure workers. Even before the COVID-19 pandemic, workplace fatalities, many of them preventable, were common. In 2019, 5,333 workers were killed on the job, and hundreds of thousands experienced nonfatal injuries and illness (BLS-IFF 2019a and 2019b). A 2017 study by the National Employment Law Project reviewing U.S. Occupational Safety and Health Administration (OSHA) severe injury data from 29 states reported that 27 workers per day suffer amputation or hospitalization (Berkowitz 2017). As with the other workplace harms discussed in this report, there are racial disparities: the overall fatality rate of Black and Latino workers is higher than that of white workers (AFL-CIO 2020). Occupational safety and health risks and violations are even more stark in light of widespread workplace outbreaks during COVID-19.

• Misclassification and payroll fraud. A 2019 study of Washington state found that the proportion of employers that misclassify their workers as independent contractors (not including those who paid “off the books”) averaged 16% from 2013 to 2017 (Xu and Erlich 2019). An earlier analysis of state-level research found that between 10% and 20% of employers have misclassified at least one worker as an independent contractor, noting that employers who misclassify their workers avoid paying payroll taxes and workers’ compensation insurance, and often fail to comply with minimum wage and overtime pay requirements in the Fair Labor Standards Act (FLSA) (Carré
  2015). Misclassification is costly for workers, who lose significant money each year because of it (Shierholz 2020). Misclassification also costs the public. The Washington state study conservatively estimated that from 2013 to 2017, the state annually lost over $30 million in unemployment insurance taxes and more than $53 million in unpaid workers’ compensation premiums; losses are even greater when federal taxes are considered (Xu and Erlich 2019).Misclassification is a particularly acute problem in certain industries. A recent study found that in an average month of 2017, between 12.4% and 20.5% of the construction industry workforce nationwide was either misclassified as independent contractors or working “off the books,” and a report issued by the District of Columbia Attorney General’s Office found that construction contractors save between 17% and 40% by misclassifying workers (Ormiston, Belman, and Erlich 2020; D.C. AG 2019). Another study found extensive wage theft and misclassification in the construction industry in several midwestern states (Goodell and Manzo 2021).

• Workplace harassment, including sexual harassment. Data suggest that workplace harassment is extensive, despite federal, state, and often local equal employment opportunity (EEO) laws prohibiting employment discrimination (including harassment) on the basis of race, color, religion, sex, national origin, disability, age, and more. A 2016 report by the U.S. Equal Employment Opportunity Commission (EEOC)—the agency that enforces these laws at the federal level—noted that one-third of the approximately 90,000 charges the agency received in the prior year included allegations of workplace harassment. The report also suggested that harassment statistics of worker complaints likely seriously understate the extent of the problem, because “the least common response to harassment is to take some formal action—either to report the harassment internally or file a formal legal complaint” (Feldblum and Lipnic 2016). A number of surveys and reports, usually based in specific industries, have found extensive incidence of sexual harassment (ROC United and Forward Together 2014; Covert 2020; NASEM 2020; Chatterjee 2018). However, the U.S. Government Accountability Office in 2020 noted the scarcity of data on this issue and recommended further surveys (U.S. GAO 2020).

• Labor trafficking. Labor trafficking occurs when a person is compelled or coerced to provide labor or services, and often afflicts people who are vulnerable because of life circumstances and economic hardship (U.S. DOJ n.d.). The National Human Trafficking Hotline identified nearly 5,000 labor trafficking cases in 2019 based on its complaint line alone (NHTH 2019). Despite its frequency and severity, labor trafficking often goes undetected and is rarely prosecuted (Smith 2021).

• Employer retaliation against workers for exercising their rights. Although retaliation is illegal, employers commonly retaliate against workers for exercising their workplace rights. Illegal retaliation has been identified in a wide range of circumstances, including when workers report or file lawsuits challenging labor violations, and when workers join together to organize a union or engage in collective action (a right guaranteed under the National Labor Relations Act or NLRA). One study revealed that employers were charged with illegally firing workers or other retaliatory conduct (discipline, threats) in one-fifth to nearly one-third of union elections (McNicholas et al. 2019). A seminal 2009 study of working conditions in three major cities found that of workers who had complained to their employers about violations or tried to form a union in the prior year, 43% experienced retaliation (Bernhardt, Milkman, and Theodore 2009). In workplaces or communities with undocumented workers, a common form of retaliation for asserting workplace rights involves threats or acts related to immigration status. In many cases, laws are insufficient to adequately address or deter forms of employer retaliation (Huizar 2019; Rhinehart and McNicholas 2021).

Several factors play a role in enabling these widespread violations:

• Federal and state enforcement resources are inadequate. The shortcomings in enforcement occur at all levels, starting at the top. Federal resources for the enforcement of worker protections have declined while the U.S. workforce has grown. The U.S. Department of Labor’s Wage and Hour Division (WHD) enforces federal wage and hour laws. In 1978, WHD had one investigator for approximately every 69,000 workers; by 2018, that figure was one investigator per 175,000 workers. In many states, the federal WHD may be the primary or only government agency enforcing wage and hour laws (Costa, Martin, and Rutledge 2020). Similarly, in 1978, OSHA—the federal agency charged with protecting and enforcing workers’ rights to a safe workplace—had one compliance officer for approximately every 60,000 workers; by 2018 that number had almost tripled to nearly 180,000 (Hamaji et al. 2019).7 Meanwhile, at the state level, in 2018, seven states had no investigators at all whose responsibilities included enforcement of minimum wage and overtime laws, while most states had fewer than 10 on staff (Levine 2018). In addition to the low frequency with which penalties are imposed on violators as a result of inadequate resources, the amounts employers must pay are frequently modest, often limited to paying back what they should have paid in the first place. In addition, back wages and penalties are also often difficult to collect, even by civil labor enforcement agencies (Cho, Koonse, and Mischel 2013).

• Low union density leaves workers unprotected. Unions have traditionally helped ensure compliance with workplace laws, by serving as an on-site monitor in unionized workplaces, and by creating pressure on nonunionized workplaces to improve conditions (in order to compete for employees). However, as a result of several factors, including unfavorable federal labor laws and common employer retaliation for organizing, union density (meaning union membership as a share of employment) has diminished greatly over the past several decades (Rhinehart, Windham, and Mishel 2020). The national union membership rate of private-sector workers was only 6.3% in 2020 (BLS-CPS 2021).

• Forced arbitration blocks an increasing number of workers from suing in court, and hides misconduct from public view. Historically, attorneys in the private bar and public interest organizations have played a significant role in addressing wage theft, discrimination, and other workplace violations. As experts have noted, often underfunded public enforcement agencies are unable to address all violations of workers’ rights in the workplace. That is why the ability of workers to take their employers to court—and join together in doing so—to fight wage theft, discrimination, harassment, and other violations has been crucial to enforcing workplace protections (Hamaji et al 2019). However, private attorneys are increasingly unable to address workplace protections. As of 2017, more than half (56.2%) of all private-sector nonunion employees were required by their employer, as a condition of employment, to sign a forced arbitration agreement (Colvin 2018). Under these agreements, workers waive their right to take their employer to court and consent instead to resolving disputes in private arbitration—a secretive process heavily tilted toward the employer. These agreements often include class- and collective-action waivers, under which employees give up their right to sue on a collective basis. In 2017, 41.1% of private-sector nonunion employees covered by mandatory arbitration procedures were also subject to class action waivers (Colvin 2018). The share of private-sector nonunion workers blocked from going to court by forced arbitration clauses with class- and collective-action waivers is projected to exceed 80% by 2024. (Hamaji et al. 2019). Workers win less often in forced arbitration than in court, and when they do win in arbitration, they win less money than in court (Stone and Colvin 2015). Importantly, when workers are required to give up their right to bring a class action, it becomes extremely difficult for them to find a private attorney to bring their case, since bringing a solo arbitration case eliminates the economies of scale that make wage theft and discrimination cases economically feasible for private lawyers. Most often, when there are forced arbitration and class waiver provisions, workers never bring cases at all: one scholar estimated that hundreds of thousands of claims are not even brought each year because workers are subject to forced arbitration and never file cases; she referred to the “black hole” of forced arbitration (Estlund 2018). The secrecy of arbitration proceedings also allows violations to persist unabated, by preventing wrongdoing from coming to light as would occur in a court case.

• The growth of the “fissured workplace” leads to increased violations and creates challenges for effective enforcement. The “fissured workplace” refers to companies that subcontract, use temporary agencies, use a franchise model, or otherwise use business models in which they avoid bearing the legal responsibilities of an employer (Weil 2014). According to Weil, growth of fissured workplaces over the past several decades contributes to workplace law violations. Lower-level contractors are often less capitalized and may exist within the underground economy. Also, mid-level firms, such as temp agencies, must make a profit themselves, leaving smaller margins and pressure to cut corners to make a profit by paying less money to workers at the bottom level. In addition, effective enforcement of minimum wage requirements, overtime pay obligations, and other workplace standards is often more difficult in a fissured workplace, because it can be difficult for enforcers to impose liability on higher-level “up-chain” entities that drive working conditions and have the ability to bring about lasting compliance.8

The rationale for prosecution of wage theft and other employer crimes against workers is sound

Several reasons have been offered to support the position that violations of workers’ rights are an appropriate subject for criminal prosecution.

Employer crimes against workers cause significant harm

Although wage theft and other crimes against workers are—like most white collar and property crimes—typically nonviolent, they nonetheless cause significant harm to workers, to honest employers, and to neighborhoods and communities. The amount of money denied to workers because of wage theft dwarfs the amount stolen through many other forms of theft: One study found that in 2012, the total value of property taken in robberies reported to police across the United States was $341 million, compared with $933 million in wages recovered for known victims of wage theft. (Meixell and Eisenbrey 2014). Note that the wage theft figure includes actually recovered back wages, which is likely a significant undercount, given underreporting of wage theft for various reasons.

• Persistent wage theft impacts workers, their families, and neighborhood businesses (since underpaid workers have less money to spend), and it can affect the economic stability of neighborhoods and communities. As the cases in Section 3 demonstrate, employers’ crimes in wage theft or workplace safety cases often impact numerous victims. Moreover, given the social determinants of health, some public health experts have noted that wage theft may exacerbate adverse health impacts of low wages and low-income status by generating income insecurity. Individuals not paid for hours worked, or paid less than what they earned, may not reliably be able to pay rent or heating, buy groceries, or access transit. This in turn may result in increased crowding or homelessness, hunger, decreased mobility, and decreased ability to pay for child care or medical care—all having an adverse impact on health. Wage theft may also increase the number of hours or jobs worked, which may in turn decrease time spent with family, leisure time for physical activity, and sleep or rest (Minkler et al. 2014).
• Workers who are sexually harassed or assaulted in the workplace experience serious effects, including harm to mental and physical health, reduced opportunities for on-the-job learning and advancement, forced job change, unemployment, and abandonment of careers. Sexual harassment and assault in the workplace also harm employers, causing absences, turnover, reduced productivity, and litigation (Shaw, Hegewisch, and Hess 2018).
• Other crimes, like human trafficking and workplace fatalities, have clear and devastating lifelong impacts on victims and their families.
• Wage theft, payroll fraud, and related crimes also harm lawful businesses that comply with the law, since they must operate at a disadvantage relative to competitors that save money through breaking the law. When a business offers lower prices because it underpays employees, or when a company wins a contract because it cheats on unemployment insurance and other taxes, these acts create unfair competition for law-abiding employers (D.C. AG 2019). Widespread unaddressed violations by employers and corporations also undermine respect for the rule of law.
• Employer crimes harm the general public. Employers who evade unemployment insurance taxes deprive the system of resources needed to provide this critical safety net; those who lie in relation to their workers’ compensation insurance burden public health care resources and increase insurance costs for all employers. In addition, given that very low wages in certain sectors require full-time workers to rely on government assistance to survive (Cooper 2016), persistent underpayment of workers’ wages likely exacerbates reliance on public benefit programs.

The crimes are intentional

As many of the case examples provided in Section 3 demonstrate, crimes against workers generally result from conscious decision-making. Creating false payroll records; underreporting workers on unemployment insurance or workers’ compensation documents; shaving employee work hours or stealing tips; retaliating against employees who speak up when their rights are violated; paying no wages for an entire month or longer; assaulting minors or undocumented women workers; and eschewing critical and obvious workplace safety requirements are not inadvertent mistakes. Some employers are repeat violators (N.Y. AG 2014a). In addition, employer crimes often occur in clusters: The same employer who fails to pay workers is also evading UI and other taxes and violating workers’ compensation laws (Piore and Schrank 2018, 37–39). The Colorado legislature, in a recent statute targeting labor trafficking and wage theft, noted, “Persons who commit the crime of human trafficking often commit other crimes such as wage theft, tax evasion, and workers’ compensation fraud, which drains local and state resources, as well as denies the state its right to revenue.”9 Further, certain predatory employers specifically take advantage of young people, immigrants, or other particularly vulnerable worker populations.

Criminal prosecution of employer crimes against workers is likely to deter similar violations by other employers

Inefficacies in and weaknesses of our regulatory systems have been cited as necessitating criminal prosecutions against companies for workplace and other abuses (Steinzor 2015, 15–39). As described in Section 2B, civil labor enforcement agency resources are inadequate, limiting their effectiveness. DA involvement could have a particularly decisive effect in jurisdictions where state labor department enforcement is minimal or nonexistent. Elsewhere, too, criminal prosecutions are likely to have a significant deterrent impact on employer misconduct.

Prosecution of an employer can result in specific deterrence, meaning prevention of violations by the prosecuted employer through, for example, a plea agreement requiring ongoing compliance as a condition of probation or incorporating independent monitoring. While it requires further study (see Section 5 below), criminal prosecution of employers also appears likely to have a meaningful general deterrent impact on exploitative business models that treat civil enforcement as unlikely to occur and civil penalties as a modest “cost of doing business.”

Noncompliance with wage and hour laws (for example) has been described as a “rational” profit-maximizing decision made by unethical employers in response to low enforcement rates and deficient penalties. Scholars who have analyzed employer costs and benefits of noncompliance find that “employers will not comply with the law if the expected penalties are small either because it is easy to escape detection or because assessed penalties are small” (Ashenfelter and Smith 1979). Currently, as described in Section 2B, the likelihood of detection is low. The cost of detection is generally modest: Civil enforcement frequently recovers only back wages owed to employees, essentially converting workers’ wages into an interest-free loan to the employer. In this context, criminal prosecution could change an employer’s equation, by increasing the likelihood of detection through adding a visible and powerful new enforcer to the picture, as well as increasing the cost of detection (in the form of individual financial, reputational, and other costs). Media coverage of criminal prosecutions should also increase the perceived likelihood and cost of detection. Such publicity serves an additional deterrent purpose: A recent study showed that press releases about OSHA enforcement of workplace safety violations deterred other workplace safety violations (Johnson 2020), a conclusion likely applicable to other aspects of workplace compliance as well.

Prosecutions related to workplace conduct already routinely occur, indicating that workplace matters are not currently treated as solely civil in nature

Prosecutors routinely bring charges against employees who embezzle or otherwise steal from their employers. In addition, many prosecutors routinely pursue claimants who have fraudulently received workers’ compensation or unemployment insurance benefits.10 Given that the criminal justice system already addresses workplace matters when employers are harmed, it is appropriate to use the same jurisdiction and power when workers are harmed. Fairness in administration of justice would seem to require examination of employer misconduct, perhaps particularly urgently so during a time when workers deemed essential often experience serious workplace dangers and violations of law. (Rosenthal 2021). Moreover, fraud or wage theft by one employer will often cause a greater magnitude of harm than fraud perpetrated by an individual worker; for example, one employer that evades UI taxes year after year will generally cheat the UI program of significantly more money than one individual fraudulent UI claimant. In addition, criminal prosecution of a single employer who is a serial violator is likely to result in justice for many workers, past and future.

More resources are needed to enforce workplace protections

It is insufficient to rely on civil enforcement agencies or workers themselves to enforce labor standards protections on their own. Public enforcement resources dedicated to civil enforcement agencies are too limited, and there are too many impediments to private enforcement, including forced arbitration and workers’ realistic fears of retaliation. Such challenges are more acute in cases involving particularly egregious employer conduct, where fraudulent behaviors may impede or prevent civil enforcement agencies from readily identifying violations. Dedicating criminal enforcement resources to enforcing workplace protections would fill a significant currently unmet need.

Prosecution of employers for crimes against workers is consistent with a reform-oriented approach to criminal justice

Along with a number of more traditional prosecutors, several prosecutors associated with the “progressive prosecutor” movement have taken on this work, and they have articulated how they believe it fits within a criminal justice reform framework.11 For example, Philadelphia District Attorney Larry Krasner and San Francisco District Attorney Chesa Boudin both appointed labor liaisons within their offices for this purpose, and Minnesota Attorney General Keith Ellison created a Wage Theft Unit. These officials have cited the power employers wield over workers, and the vulnerability of workers, as a basis for committing to these prosecutions (Reyes 2019; S.F. DA 2020; Minn. AG 2019). Attorney General Ellison and Boulder County District Attorney Michael Dougherty both noted the inequity of pursuing other kinds of theft but not wage theft (Minn. AG 2019, Boyd 2019). Moreover, prosecuting extreme employer abuses aligns with the work of advocates and worker organizations on the ground (CTUL 2019; Svoboda 2011; Colorado General Assembly 2019). Relationships between prosecutors and organizations that are accountable to workers can also help the criminal justice system become more accountable to marginalized communities more broadly. As Professor César Rosado Marzán has noted, “The value of criminalization lies in its unambiguous moral condemnation of wage theft, in its capacity to shame employers who abuse their power, and in the real threat of imprisonment. Criminalization will help activists to co-enforce wage and hours laws, likely deter wage theft, and better resolve a dire problem affecting some of the most powerless individuals in U.S. society” (Rosado Marzán 2020). Prosecution of wage theft also involves reorienting enforcement resources “toward aggressive enforcement of the predations of powerful economic entities” (Bhargava and Hertel-Fernandez 2020).

Case types and examples cover a range of worker abuses and span the country

Prosecutors have brought charges to address numerous different types of employer crimes against workers. The following are descriptions and examples of some common types of cases, pulled primarily from publicly available news media articles and agency communications.12 Often, infractions occur in clusters: the same employer commits wage theft and evades UI taxes, commits workers’ compensation insurance fraud, has unsafe working conditions, and retaliates against workers who complain about any of these problems. The discussion below is organized by violation type in the interest of clarity, but many cases involve multiple violations. In addition to the discussion below, Appendix A contains links to a number of court-filed documents such as indictments, plea agreements, and more. Appendix B links to resources including a database and spreadsheet containing information and news reports of additional cases.

Prosecutors have used various statutes and charges to pursue wage theft

Wage theft takes many forms but essentially involves not paying workers what they are owed, whether it is for hours worked, or at levels required under the statutes that govern required minimum wages and overtime pay.13 Employers may avoid paying a worker for all hours worked, or avoid paying overtime, through a variety of methods: altering time cards, maintaining two sets of payroll records (one real and one false), or requiring people to work before clocking in or after clocking out. Some employers pay workers in cash, to avoid creating a record of underpayments (as well as to avoid paying unemployment insurance taxes and workers’ compensation premiums). In certain instances, including in the restaurant, construction, and home health care industries, prosecuted employers have failed to pay any wages at all for a period of time, including up to one or two months. There have been cases of employers taking permissible deductions from workers’ pay for health insurance, union dues, or other benefits—but then simply keeping the money for themselves. While the majority of wage underpayment situations that are reported are handled by the civil legal system, a growing number of prosecutors have brought criminal charges in appropriate situations.

DAs and AGs bring criminal prosecutions under state laws. The relevant state statutes, and therefore the charges brought in these cases, vary. Some state statutes explicitly address workplace conduct and may even use the term “wage theft.” Other prosecutors have brought these cases using theft of services, theft by swindle, larceny, scheme to defraud, or similar statutes. Prosecution of wage theft, prevailing wage and payroll fraud cases typically requires not only witness testimony, but also audits of employer documents—evidence similar to that needed to pursue other types of economic crimes.

Sample wage theft cases

• Nonpayment of overtime. In 2021, the Santa Clara County Office of the District Attorney brought charges against a flooring company owner who was accused of owing workers nearly $1 million of overtime wages, and also accused of workers’ compensation premium fraud (Green 2021).
• Keeping payroll deductions intended for specific purposes. In 2021, the Worker Protection Unit of the Philadelphia Office of the District Attorney charged a plumbing company’s owner with multiple counts of theft for deducting union dues from workers’ pay and keeping the money instead of remitting the dues to the union as required (Phil. DA 2021). In a similar case, Michigan’s attorney general brought criminal charges against an employer who allegedly withheld more than $52,000 from workers’ paychecks for deferred retirement contributions but failed to deposit the funds into their accounts or pay the employer match (Mich. AG 2019).
• Failing to pay wages. In 2020, Colorado’s 5th Judicial District Attorney’s Office charged a contractor with tax evasion and theft from a person; the contractor ultimately pleaded guilty to one count of each. The investigation, which began in late 2019, was conducted by the DA’s office in collaboration with the Colorado Department of Revenue Criminal Tax Enforcement Division after past employees of the defendant complained about not having been paid (Colo. 5th DA 2020, Lotshaw 2021).
• Writing bad checks to undocumented workers. In 2019, Colorado’s 20th Judicial District Attorney’s Office (in Boulder County) brought charges against an employer accused of giving undocumented workers bad checks for various projects and threatening to report them to immigration when they asked for payment (Byars 2019a, 2019b). The employer was sentenced to four years of probation and ordered to pay restitution (Oravetz 2019).
• Failing to pay for work performed. In 2018, the Harris County (Texas) district attorney charged the owner of a high-value home with theft of service for failing to pay a painter for repair work completed after a hurricane (McPherson 2018).
• Wage theft of elder care employees. Numerous DAs in California have brought charges against elder care homes for wage theft, tax fraud, and other criminal violations (Gartrell 2016).
• Not paying wages to immigrant workers. In 2016, the San Diego district attorney, partnering with the California labor commissioner, secured a criminal jury trial conviction for felony grand wage theft by false pretenses. A San Diego restaurant owner was sentenced in 2016 to two years in jail for paying immigrant workers only in tips. The San Diego County Superior Court also ordered the employer to repay $20,000 in stolen wages and tips to six of the restaurant workers (CSLEA 2016).
• Failing to pay overtime and other wages. The New York attorney general’s office has brought wage theft-related cases in several industries. For example, in 2015, the office charged a Papa John’s franchisee who was accused of continuing to underpay workers even after being investigated for wage theft by the U.S. Department of Labor. The charges included creating fictitious worker names to conceal overtime hours worked and filing fraudulent quarterly state tax returns. The employer pleaded guilty to failure to pay wages and falsifying business records (NY AG 2015a, 2015b). In 2012, the New York AG’s office announced a guilty plea by the owner of a home health agency in a case that involved failing to pay workers $300,000 in wages (NY AG 2012b).

Crimes related to prevailing wage laws involve cheating employees, government agencies, and the public

Prevailing wage laws require contractors on government-funded public works projects (typically government construction contracts) to pay their workers at least the locally prevailing wages and fringe benefits paid on similar projects in the area (Mahalia 2008). In addition to the federal prevailing wage law (the Davis-Bacon Act of 1931), many states have enacted state-level prevailing wage laws. Prevailing wages are set based on a worker’s location and occupation, and they are often considerably higher than the applicable minimum wage in a given jurisdiction. To allow government contracting agencies to ensure compliance, prevailing wage laws generally require public contractors to routinely submit “certified payroll records” of hours worked and wages and benefits paid on a given contract. When employers violate these laws, they are not only underpaying workers, but also cheating the government agency and taxpayers, since the agency awarded the contract based on the premise that workers would be paid prevailing wages. As a method of violating prevailing wage laws, employers may, for example, create and submit false certified payroll records that fraudulently demonstrate compliance by showing artificially inflated pay amounts, artificially deflated hours, or even listing as employees individuals who were not on the job at all.

Some prevailing wage laws directly include criminal sanctions for violations. Violations such as submitting false payroll records may also result in other charges, such as filing a false instrument or maintaining false business records.

Sample prevailing wage cases

• Cheating on fringe benefit requirements. In 2021, the Pennsylvania attorney general’s office charged a contractor with extensive and complex violations of prevailing wage laws in what the AG described as “the largest prevailing wage criminal case on record.” The contractor was charged with appropriating retirement benefits owed under the law, and falsely inflating the amount of money paid for health benefits in order to pay workers less. These charges came on the heels of another separate criminal prevailing wage case by the Pennsylvania AG’s office that resulted in a guilty plea. (Pa. AG 2021, Rushton 2021).
• Failing to pay required prevailing wages. In 2020, the Queens (New York) district attorney announced the guilty plea to a prevailing wage labor law violation by a contractor for the New York City School Construction Authority and the New York City Department of Education, who “pocketed more than $1.5 million that should have gone to employees.” (Queens DA 2020).
• Falsifying records and underpaying workers. In 2019, New Jersey’s attorney general announced the guilty plea of a construction contractor for falsifying payroll records to conceal his underpayment, and in some cases nonpayment, of wages to workers, many of whom were immigrants (N.J. AG 2019).
• Underpayment, falsifying records, and demanding kickbacks of money back from workers. In 2013, New York’s attorney general charged a contractor for the Port Authority with prevailing wage violations. The contractor, who ultimately pleaded guilty to grand larceny and prevailing wage violations, created false business records demonstrating compliance with the law and issued checks to workers which would demonstrate compliance; he then made his workers cash the checks at his bank and kick back, or return, most of the cash to him. Under the plea agreement, the contractor was sentenced to five years of probation, was banned for five years from working on public projects in New York, and was ordered to pay $200,000 in restitution to workers (N.Y. AG 2013, 2014b).

Payroll fraud cases include worker misclassification, workers’ compensation fraud, and nonpayment of unemployment insurance taxes

Numerous employers have been criminally prosecuted for payroll fraud, including crimes resulting from misclassifying workers as independent contractors, or from paying workers in unreported cash “off the books.” In such cases, employers often falsely underreport the number of workers on unemployment insurance (UI) tax returns filed with the state or on workers’ compensation insurance applications. These actions can lead to charges of filing a false document or maintaining false business records, or specific workers’ compensation- or insurance-related charges. Additional charges may stem from an employer’s failure to pay UI taxes or to procure required workers’ compensation insurance, acts which themselves have criminal consequences in some states. In addition, as noted above, often employers committing these offenses engage in wage theft as well.

Sample payroll fraud cases

• Underreporting employees on workers’ compensation forms. In 2020, the Hennepin County Attorney (Minnesota) won convictions against the owners of a drywall company for insurance fraud and theft by swindle, based on allegations that the company underreported employees on workers’ compensation documents and wrongly treated workers as independent contractors. As part of a guilty plea, both owners of the Minnesota drywall company received five years of probation, 180 days of home monitoring, and 30 days of community service, along with a $30,000 fine and an order to pay $309,000 in restitution (Hennepin CA 2020a, 2020b).
• Failure to pay wages, UI taxes, and workers’ compensation insurance. In 2020, the Suffolk County (New York) DA’s office announced that eight people and nine businesses had been charged in a labor-related crackdown in Suffolk County. The alleged crimes collectively involved the theft of more than $250,000 in employees’ wages and benefits, nonpayment of more than $58,000 to the New York State Department of Labor for unemployment insurance fund contributions, and failure to pay more than $133,000 to the state insurance fund for workers’ compensation insurance premiums (Suffolk Cty. DA 2020b).
• Wage theft and workers’ compensation insurance crimes, related in part to underreporting payroll. In 2020, the Rhode Island attorney general brought charges against the former owner of a cleaning company (a contractor for the Community College of Rhode Island) for wage theft, failure to maintain workers’ compensation insurance coverage, and workers’ compensation insurance premium fraud. Among other things, the defendant allegedly falsely reported only $10,000 of payroll, instead of almost $400,000, lowering business expenses and gaining a competitive advantage in bidding (R.I. AG 2020).
• Workers’ compensation insurance fraud. In 2019, the Stanislaus County (California) DA’s office announced that a former temp agency owner had been convicted of workers’ compensation insurance premium fraud and ordered to pay close to $1 million in restitution. An insurance audit revealed that the agency owner had underreported payroll and the number of employees to obtain a lower premium (CSLEA 2019).
• Misclassifying workers to avoid paying overtime and UI taxes. In 2018, the New York state attorney general obtained guilty pleas (to grand larceny and falsifying business records) from three construction companies that had misclassified their workers as independent contractors to avoid paying overtime and unemployment insurance taxes (N.Y. AG 2018).

• Hiding the existence of workers to avoid workers’ compensation costs and payroll taxes. In 2017, the San Diego district attorney obtained a guilty plea from a married couple accused hiding the existence of at least 800 housekeeping and janitorial workers to avoid paying millions in workers’ compensation insurance rates and payroll taxes (Littlefield 2017).

Workplace safety and health cases target highly predictable, avoidable, and sometimes fatal workplace hazards

While most violations of workplace safety and health laws are addressed through civil enforcement by OSHA or an OSHA-approved state plan (U.S. DOL-OSHA n.d.a, n.d.b), prosecutors have brought various charges in several cases of highly predictable, easily avoidable workplace fatalities or serious injuries, such as unsecured roofers who fell to their deaths or workers killed when trenches that had not been shored up collapsed. State exercise of traditional police powers, such as criminal prosecutions of such cases, is generally not preempted by the OSH Act (Flanagan, Gerstein, and Smith 2020). Charges have included workplace or involuntary manslaughter, criminally negligent homicide, reckless endangerment, and assault. There is long-standing precedent for prosecution in this area; for example, in the 1980s, a program was established in Los Angeles involving collaboration between the district attorney and the state OSHA plan (McCluskey et al. 2016).

Sample workplace safety and health cases

• Roofing fatalities. In 2019, the Office of the Maine Attorney General charged a contractor with workplace manslaughter when a roofing worker without required protection against falls fell to his death (Flaherty 2019). In a similar case that year, the prosecutor from Summit County, Ohio, obtained an involuntary manslaughter guilty plea from a contractor in a roofing fatality case (Warsmith 2019).

• Trench collapses. Several employers have been prosecuted following workplace fatalities resulting from trench collapses, including in Boston; Brooklyn, New York; Fairfax County, Virginia; Granby, Colorado; Manhattan, New York; and Seattle. In all cases, the employers were charged with manslaughter, except in the Seattle case; there the charge was criminal negligence (NBC10 Boston 2019; Brooklyn DA 2019; Haynes 2019; Pace 2019a, 2019b; Chen 2016; Green 2016)
• Forklift fatality. In 2018, the San Francisco district attorney brought involuntary manslaughter charges against the employer of a worker crushed to death by a forklift; the victim was assigned to use the forklift, despite not being certified to do so, and a ramp at the worksite lacked a required curb to prevent the forklift from falling (Sernoffsky 2018).
• Crane-related injuries. In 2018, the Manhattan district attorney brought assault charges against a contractor on a construction site where two workers were gravely injured by the fall of a mini crane (NY Cty. DA 2018).
• Child labor. In the last decade, child labor charges were brought in two New York cases, both involving teenagers assigned to operate machinery prohibited at their age. A 14-year-old was killed on the job at a farm (Harris 2014; N.Y. AG 2019) and a 17-year-old’s arm was severed at a restaurant (N.Y. AG 2014c). Both employers pleaded guilty.

Labor trafficking cases involve extreme worker exploitation

Labor trafficking occurs when a person uses force, fraud, or coercion to obtain labor or services of another person (U.S. Department of State 2021). State statutes defining labor trafficking vary in their precise language, and some encompass a wider range of conduct than federal trafficking statutes (NCSL 2018). Although labor trafficking has been less commonly prosecuted than sex trafficking (Smith 2021), state or local criminal prosecutors have brought labor trafficking charges in a few notable cases. In some instances, a focus on trafficking has served as a pathway for prosecutors’ offices to get involved in broader worker exploitation issues.14

Sample labor trafficking cases

• Paying grossly subminimum wages and threatening workers. In 2020, the Suffolk County (New York) district attorney arrested a gas station owner for several charges, including labor trafficking, scheme to defraud, grand larceny, and retaliation. The employer was accused of paying grossly subminimum wages and no overtime for workweeks of 70 to 100 hours; he was also alleged to have threatened to file false police reports or call immigration authorities regarding any employees who complained about working conditions or cooperated in state labor department investigations. The case was referred to the DA’s office by the New York State Department of Labor (Suffolk Cty. DA 2020a).
• Coercing, underpaying, and threatening undocumented workers in unsafe conditions. In 2019, a contractor in the Twin Cities, Minnesota, region was sentenced to 270 days in jail and five years of probation for labor trafficking and insurance fraud, after pleading guilty on the eve of trial in a case brought by the Hennepin County Attorney. According to the criminal complaint, the contractor recruited workers for construction work, knowing that they were undocumented, and used that leverage to force them to work long hours at low pay and without adequate safety protection, allegedly also telling workers they would be fired and deported if they went to a doctor for injuries suffered on the job (Hennepin CA 2019, 2020c). The investigation was conducted by a state law enforcement agency after reports were made to the Hennepin County Attorney’s Office by a trade union and a local workers’ rights organization, Centro de Trabajadores Unidos en la Lucha (CTUL) (Feshir 2019).

• Underpaying, keeping passport, and threatening immigrant cleaning worker with deportation. In 2018, the Massachusetts attorney general’s office charged an employer with labor trafficking, among other offenses, in a case in which the defendant was accused of recruiting a worker from abroad and requiring her to perform cleaning work, for which she was paid subminimum wages; he allegedly retained the worker’s passport and threatened that if she tried to return to her home country of origin, she would be arrested by immigration authorities (Mass. AG 2018).
• Subjecting care workers to brutal conditions. In 2018, the California attorney general’s office brought human trafficking and other charges against four individuals who ran an adult residential and child care company. The complaint alleged that workers were forced to work around the clock, seven days a week, and sleep on floors and in garages, and that defendants also confiscated some workers’ passports and threatened to report workers to immigration authorities (Calif. AG 2018).
• Taking visas and passports from farmworkers and threatening harm. In 2018, a jury in Fresno County, California, found an individual guilty of human trafficking and extortion in relation to farmworkers. The defendant was accused of taking victims’ visas and passports, and of threatening to harm them and report them to immigration if they stopped working for him (Lopez 2018a, 2018b).

Sexual assault cases target extreme harms of harassment

The #MeToo movement, which gained momentum in 2017, has led to an increase in awareness and exposure of workplace sexual harassment. In certain instances, this conduct has risen to a level resulting in assault and even rape charges.15

Sample workplace sexual assault cases case summaries

• In a nationally high-profile case, the Manhattan DA office brought criminal charges against former Hollywood producer Harvey Weinstein, who in 2020 was found guilty of criminal sexual assault and rape, and sentenced to 23 years in prison (Ransom 2020a, 2020b).
• The owner of a Boulder, Colorado, ice cream company pleaded guilty to two counts of misdemeanor unlawful sexual conduct based on allegations that he sexually abused female employees, including two undocumented immigrants. In 2018, he was sentenced to six months in the Boulder County Jail followed by a year of work release, among other conditions of probation (Bear 2018).
• The owner of the country’s last Howard Johnson’s restaurant (located in Lake George, New York) was sentenced to six months in jail and six years’ probation  after being charged in 2017 with sexual abuse, unlawful imprisonment, and endangering the welfare of a child based on allegations that he sexually harassed about 15 female employees, including minors (AP 2017, 2018).

Retaliation and witness intimidation cases target actions that hamper investigations

Retaliation against workers who report violations can consist of termination, demotion, pay reduction, assignment to less desirable schedule or job assignment, threats of any kind (including calling immigration), or advising other employers not to hire a person. Retaliation is particularly harmful because of its potential to deter other workers from reporting violations or cooperating with an investigation. In some cases pursued by prosecutors, employers pressured workers to withdraw complaints or provide inaccurate testimony in wage-related proceedings. Other cases involved retaliation or conduct similar to witness tampering.

Sample retaliation and witness intimidation cases

• Retaliating against gas station workers who reported violations. In 2020, the Suffolk County (New York) District Attorney charged a gas station owner with, among other things, retaliation against workers who reported violations (Suffolk Cty. DA 2020a). (This case is also described in the labor trafficking case section above) (Suffolk Cty. DA 2020a).
• Intimidating laundry temp workers serving as witnesses in a wage theft case. In 2019, the Massachusetts attorney general’s office announced guilty pleas of owners of a temp agency for, among other things, witness intimidation and retaliation against workers placed at an industrial laundry facility. Workers placed by the temp agency in the warehouse were paid subminimum wages and no overtime for workweeks of 60 to 70 hours. The temp company owners were accused of threatening to terminate witnesses cooperating with the AG’s investigation, directing employees not to cooperate with investigators, and reducing the hours of workers who spoke with investigators during an on-site inspection. The investigation began when a local branch of the United Food and Commercial Workers International Union contacted the AG’s office (Mass. AG 2019).
• Dissuading witnesses of crimes related to a state construction subcontract. In 2014, the Orange County, California, district attorney’s office obtained a guilty plea from a construction subcontractor for taking workers’ wages on a public work project and dissuading witnesses from prosecuting a crime. Hired by the general contractor refurbishing a state hospital, the subcontractor required workers to turn over a portion of their paychecks to him. When workers contacted the DA’s office about their wages, leading to an investigation, the subcontractor invited workers to his house to receive their final paychecks, but instead attempted to dissuade them from acting as witnesses against him (Dobruck 2014).
• Witness tampering. In 2012, the New York attorney general’s office brought witness tampering charges against a garment factory owner accused of instructing a former employee to falsely testify that her work tenure was shorter than it was. The case was referred to the AG’s office by staff from the New York State Department of Labor and Industrial Board of Appeals (administrative hearing body) when they learned of the tampering before a hearing (N.Y. AG 2012a).
• Intimidating immigrant car wash workers. In 2010, the Los Angeles city attorney obtained a protective order against two car wash owners after they made immigration-related threats to workers amid an ongoing wage theft case. The protective order directed the employers not to “harass, intimidate or retaliate” against workers, and also not to “attempt to prevent or discourage any employee or named victim…from participating or cooperating” in the investigation, prosecution, or enforcement of the case (CA Superior Court 2010).

Past prosecutions of crimes against workers provide some guidance on common questions about bringing such cases

Although providing prosecutors with a road map on how to bring such cases is beyond the scope of this report,16 past prosecutions provide some initial guidance regarding several common questions:

• What statutes may be used to bring such cases?
• How can prosecutors learn about cases? What sources of potential referrals exist?
• How can prosecutors engage in this work in a manner that responds to racial equity, social justice, and similar concerns?
• What funding sources may be available to support this work?

A range of applicable statutes can provide prosecutors with authority to take on various workplace-related crimes

In some states, there may be labor or wage-specific criminal provisions. But as noted in the case studies section, many prosecutors have brought workplace-related crimes cases using a variety of generally applicable state statutes. Often, prosecutors may be able to use existing law to bring such cases, including statutes addressing the following conduct:

• Theft (including theft of services or theft by swindle)
• Larceny
• Scheme to defraud
• Check fraud or passing bad checks
• Filing false documents with government agencies
• Creating and maintaining false business records to conceal wage theft and other violations
• Witness tampering and retaliation
• Insurance fraud
• Unlawful activity related to unemployment insurance, workers’ compensation, and prevailing wage requirements
• Manslaughter and homicide
• Labor trafficking
• Criminal sexual assault
• Endangering the welfare of a minor
• Child labor

Examples of state statutes governing workplace crimes

Some states, such as New York, have relatively long-standing statutes specifically addressing workplace-related employer crimes. Other states, such as Colorado, Minnesota, and Texas, have passed specific statutes on wage theft in recent years. Colorado and Minnesota passed laws that would define wage theft beyond a certain monetary threshold as a felony. This designation makes such cases more appealing to prosecutors for various reasons, including that it affords them more options in plea bargaining situations. Also, in some states, such as California, prosecutors have a more robust set of tools to address felonies (as compared with misdemeanors), including search warrants and use of a grand jury.

• New York. Under New York Workers’ Compensation Law § 52(1)(a), failure to secure workers’ compensation for more than five employees is a Class E felony; under Labor Law 220(3)(d)(i), willful failure to pay prevailing wages totaling more than $25,000 is a Class E felony (with higher level felonies for larger underpayments).
• Colorado. Legislation passed in 2019 explicitly included within its statutory definition of theft an employer who “being able to pay wages or compensation and being under a duty to pay, willfully refuses to pay wages or compensation.” In Colorado, theft is a felony if the dollar amount involved is at least $2,000.
• Texas. In 2011, Texas enacted a wage theft law specifying that within the existing “theft of services” law, partial payment of wages is not sufficient to negate the intent to avoid payment by an actor (in this case, an employer). (Contemporaneous news articles noted that this was a common employer defense, see for example McPherson 2011.) Tex. Penal Code Section 31.04(d-3)(1, 2)(1994).
• Minnesota. Minnesota’s theft statute includes “wage theft” as a type of theft, and defines the term “wage theft” as occurring, among other things, “when an employer with intent to defraud: (i) fails to pay an employee all wages, salary, gratuities, earnings, or commissions at the employee’s rate or rates of pay or at the rate or rates required by law.” MN Statutes 2020 Section 609.52 subdivision (1)(13).

Proposed legislation

• Rhode Island. A bill proposed in Rhode Island in 2021 (Rhode Island Legislature 2021 Regular Session Senate Bill 195) would increase penalties for wage theft, making nonpayment of wages a felony if the value of the wages owed to an employee is at least $1,500, or if the violation was a knowing or repeat violation (R.I. AG 2021)
• California. A bill proposed in California in 2021 would increase criminal penalties for wage theft (Alvarez 2021).

Prosecutors may receive workers’ rights case referrals from a variety of sources

State and local prosecutors who have brought cases against employers for violating workers’ rights have received case referrals through a variety of sources. Accordingly, prosecutors wishing to receive referrals should build relationships with a number of organizations and offices. These relationships should be ongoing and systematic; referrals and successful collaborations are unlikely to result from one-off conversations or one-sided presentations.

Organizations and agencies representing or assisting workers are the most common case referral sources

• Worker advocacy groups. Worker centers, workplace safety and health advocates, and other worker advocacy groups regularly speak with and hear from workers seeking help for a range of workplace violations.
• Labor unions. In addition to representing their members, many unions are actively organizing in a range of workplaces and industries, and routinely speak with workers experiencing violations. Unions might bring forward cases involving employers that are violating workers’ rights, or winning government contracts and cheating on taxes owed and worker pay.
• State labor departments. As the state’s primary regulators and civil enforcers of workplace laws, many state labor departments receive a considerable volume of incoming complaints. While most do not have a systematic method for referring cases to prosecutors, labor departments of both California and New York have regular methods of ongoing referrals, which could readily be replicated elsewhere. In fact, in 2014, the California Labor Commissioner’s Office (the equivalent of the state labor department) created a “Wage Theft is a Crime” campaign, with materials including posters and radio spots (CA Lab. Com. 2021); the office also offered training to district attorney offices on how to develop and bring these cases (Ramirez 2018).17
• Labor advisory boards or councils. A noteworthy model is provided by the labor advisory boards or councils established by both the Queens and Suffolk County district attorneys in New York. The councils consist of unions, worker centers, worker advocacy groups, and others within their jurisdiction. The office holds quarterly meetings (in person prior to the COVID-19 pandemic), which allow for formal discussions as well as informal conversations, relationship-building, and case referrals. These formalized groups create a way for DA offices to engage systematically and regularly with the community. (Suffolk Cty. DA 2020b).

Government agencies and officials outside of labor agencies are additional potential sources for case referrals

• State agencies such as those overseeing workers’ compensation insurance are sources of referrals, as are any state inspectors general
• City or municipal labor standards offices, where they exist, or city departments of investigation may refer cases. Many cities, including Chicago, Denver, Minneapolis, New York, Philadelphia, San Francisco, Seattle, and more, have city-level labor offices devoted to protecting workers’ rights. Also, for example, the New York City Department of Investigation hosts inspectors general for the School Construction Authority, the New York City Housing Authority, and more; these inspector general offices have been an active source of cases for prosecutors in New York City.
• Elected officials may be sources of referrals, particularly those representing immigrant or low-income communities.
• The U.S. Department of Labor, especially the Wage and Hour Division and OSHA, may be a source of referrals, although generally they first refer cases to U.S. attorney offices.
• DAs, AGs, and labor enforcers in other states can refer cases in situations involving employers operating in multiple jurisdictions.

Nongovernmental organizations are another important source of potential case referrals. They include:

• legal services and other public interest law offices
• plaintiffs’ wage and hour lawyers, such as members of the National Employment Lawyers Association or its state or local affiliate
• organizations that serve victims of human trafficking
• immigrants’ rights organizations and lawyers/nonprofits representing immigrants
• media, including social media and foreign language media, whose coverage can provide leads on cases
• law school clinics
• companies that compete with employers who are violating the law

Traditional law enforcement sources, like police departments or sheriffs’ offices, may also be helpful, but may presently be more useful as supplements to referrals from and collaboration with worker-focused organizations and agencies described above

• Workers face barriers to reporting violations directly to law enforcement for a variety of reasons, including fear of retaliation, agency language access limitations, unfamiliarity with legal rights or avenues for complaints, and fear of potential immigration consequences, among others (Grittner and Johnson 2021). One study estimated that there are about 130 violations for every one complaint lodged overall, and that this ratio varies tremendously across industries (Weil and Pyles 2007). Thus, a lack of worker complaints does not indicate employer compliance.18
• Still, a prosecutor’s own intake phone number, hotlines, or other avenues for receiving calls and tips from the public can sometimes lead to cases, especially after an office has publicly communicated its involvement in worker issues. These public engagement resources may receive more intakes and calls from workers after media or other announcements about workers’ rights cases. However, based on the barriers to worker complaints, relying solely on already-existing passive intake systems is unlikely to lead to information about the most egregious violations, especially during an office’s initial stages of involvement on these issues.
• To date, few prosecutions appear to have been initiated by law enforcement, such as sheriffs’ offices or the police. Prosecutors may wish to consider offering trainings to such agencies on workers’ rights issues.
• In a recent development, the Los Angeles County Sheriff in February 2021 launched a wage theft task force “to protect undocumented and documented workers in Southern California.” The task force is a collaboration of the sheriff’s department with the state labor commissioner, the Los Angeles County Office of Immigrant Affairs, the Los Angeles County District Attorney’s Office, the Los Angeles County Federation of Labor, and several community groups (LACSD 2021a). The sheriff’s department will be receiving complaints and referring them for criminal prosecution, civil enforcement, or other handling, as well as playing a direct role in enforcement and collections (LACSD 2021b). The sheriff also authored a Washington Post op-ed about the task force (Villanueva 2021). In addition, the Travis County (Texas) Sheriff’s Office added “wage theft” to a form allowing for online reporting of certain crimes (Travis CSO 2021).

Criminal justice concerns should be considered when prosecuting workplace violations

Racial and economic inequities in the criminal justice system and vulnerabilities of immigrant workers raise important concerns about these criminal prosecutions, including the following:

• Charging only low-level supervisors may fail to punish those with real responsibility for and authority over workers’ conditions. Some prosecutors may lean toward pursuing low-level supervisors with limited authority, while taking no action regarding higher-level officials with greater decision-making power. Prosecutions should seek to avoid this focus only on the “low-hanging fruit,” and instead attempt to target those with greatest responsibility for causing violations and with genuine ability to stop or prevent the violations. Prosecuting actors higher up the hierarchy is likely to prove challenging at times, because it is necessary to demonstrate that the defendant had mens rea, or the requisite criminal intent, and also because the standard of proof in criminal cases—“beyond a reasonable doubt”—is higher than the standard in civil cases. Prosecuting higher-level officials is important, however, to place responsibility on those who truly can change workers’ conditions, and to more effectively deter violations. As University of Maryland School of Law Professor Rena Steinzor observes, “the law must authorize prosecutors to climb the managerial ladder to find those responsible for making such incidents inevitable” (Steinzor 2015, 92.) In addition, prosecutors should be aware of racial disparities that may exist in pursuing only lower-level actors.
• Certain convictions have collateral immigration consequences for defendants. Under current immigration laws, certain criminal convictions can have immigration consequences, including threat of deportation. Prosecutors may wish to seek to avoid such consequences in considering charges for these cases. In 2017, for example, Brooklyn District Attorney Eric Gonzalez hired immigration attorneys to help prosecutors in his office “tailor criminal charges and plea bargains to avoid placing immigrant defendants in jeopardy of deportation” (Ryan 2017).
• Prosecutors should consider certifying victims and witnesses or U visas, where appropriate. Immigration issues also arise in relation to victims and witnesses, who may fear coming forward because of perceived potential consequences. The U visa is an immigration benefit for victims of certain crimes who are currently assisting, have assisted, or are likely to be helpful in assisting law enforcement in the investigation or prosecution of a qualifying crime. The U visa provides eligible victims with temporary immigration status to remain in the United States while assisting law enforcement, and if certain conditions are met, the U visa holder can ultimately obtain lawful permanent resident status. Individuals seeking U visas must be certified by a qualifying law enforcement agency, a category that includes prosecutors, and the certification process is relatively uncomplicated. Qualifying crimes include, among other things, human trafficking, involuntary servitude, manslaughter, obstruction of justice, peonage (holding someone in debt in servitude), sexual assault, and witness tampering (U.S. DHS 2019; NILC 2010).
• Alternatives to incarceration may be appropriate. Our country is undergoing an extensive national conversation about systemic racial inequities involved in mass incarceration. While a discussion of the problem of mass incarceration is beyond the scope of this report, prosecutors may want to consider alternatives to incarceration in resolving these cases. They may also want to consider whether innovative approaches to sentencing might be more effective. Finally, some criminal prosecutions of workers’ rights violations have been brought against corporations, not individuals; while such prosecutions are often seen as having less of an impact, they obviously raise no concerns about incarceration.
• Case resolution should include measures to ensure future compliance. In cases involving employers that continue to operate, prosecutors should seek terms that include monitoring or other measures to ensure future compliance. Monitoring could be performed by third-party monitors paid by the employer, or in partnership with administrative enforcement agencies. Prosecutors should also seek asset forfeiture where appropriate. A powerful tool in prevailing wage cases is debarment, which prevents a company from bidding on public works contracts in a given jurisdiction for a set period, sometimes up to five years. In addition, prosecutors may want to consider whether a restorative justice approach may be warranted or appropriate in these cases.19
• Workers who are victims should be provided with the opportunity to submit victim impact statements. Victims are often permitted or encouraged to submit victim statements (in writing or orally) regarding the impact of the crime on their lives. This opportunity should be provided to workers, because it enables their voices to be included in the process. Having the opportunity to address the court orally or in writing can be meaningful for workers, educates employers about the human consequences of their actions, and helps fully inform courts about the impact of wage theft and other employer crimes against workers.
• Civil enforcement may be a good option for prosecutors in some states. In some states, district attorneys have the authority to bring not only criminal prosecutions, but also civil lawsuits. For example, the Los Angeles and San Francisco district attorneys recently filed a civil lawsuit against the platform cleaning company Handy (L.A. DA 2021). To the extent that district attorneys have civil authority, they can consider exercising it to enforce workers’ rights.

While most prosecutors have brought workers’ rights cases without dedicated funding, limited dedicated funding mechanisms exist in some jurisdictions

Most DAs and state AGs who have brought workers’ rights cases have done so without any specific or dedicated funding. Just as they regularly prosecute theft, larceny, fraud, manslaughter, and other cases without dedicated funding, they simply add labor-related cases to their caseload when they emerge. However, there are a few examples of dedicated funding mechanisms.

• Funding to combat human trafficking. The U.S. Department of Justice has awarded funding to combat human trafficking; a 2020 press release describes over $101 million in grants for, among other things, “enhancing the capacity of law enforcement and other stakeholders to identify victims and provide justice for those victims through the investigation and prosecution of their traffickers” (U.S. DOJ 2020).

• Examples of state funding programs that may be used to pursue employer crimes. California and New York both have unique programs that are not specifically devoted to prosecution of employer crimes, but that have routinely been used to prosecute them. The infractions that qualify for the funding include those related to payroll fraud (such as failure to carry workers’ compensation), workers’ compensation fraud, and failure to pay or accurately report unemployment insurance taxes. Prosecutors have often also brought wage theft charges as part of those cases, given that these offenses often occur in clusters by the same employers.

• • Funding created by state legislation in California. California’s Workers’ Compensation Insurance Fraud Program, established in 1991, came about as part of a legislative package making workers’ compensation fraud a felony, requiring insurers to report suspected fraud, and establishing a mechanism for funding enforcement and prosecution activities. The funding comes from an assessment on employers. The aggregate assessment in the 2017–2018 fiscal year was more than $62 million. The legislation also established a commission, with representatives from labor, employers, and insurers, to determine the level of assessments and award grants to prosecutors. (Calif. DOI n.d.a, n.d.b).

• • State funding without legislation in New York. New York’s Crimes Against Revenue Program (CARP) was established in 2004 as a program funded by the state’s Division of Criminal Justice Services. It provides grants to district attorneys’ offices across the state to fund investigations and prosecutions of tax crimes as well as Medicaid, public assistance, and workers’ compensation fraud. Under the program, local district attorneys’ offices partner with various state agencies in bringing prosecutions. CARP funds have been used to support prosecutions of cases involving violations of prevailing wage, unemployment insurance, and workers’ compensation laws. Successful cases under CARP allow the state to recoup the costs of the program through restitution, fines, and penalties. The program has been revenue-generating for the state (NYS DCJS 2015, 2020, 2021; DAASNY 2019).

Areas for further exploration include research on deterrence and questions about implementation

The incidence and impact of state and local criminal prosecutions of employers have not been extensively studied to date, leaving a number of questions for researchers, prosecutors, worker advocates, legal scholars, and others.

One set of key research questions relates to the impact of criminal prosecution. Does prosecution of one employer deter violations by others? If so, how can such deterrence be measured, and how does it compare with that of civil enforcement? Does deterrence stem from the greater likelihood of detection resulting from more enforcers addressing labor issues, from publicity and reputational harm, from the gravity of potential consequences, or from all of the above?

Questions related to implementation include: What is the capacity of district attorneys and state attorneys general to bring such cases and build practices in this area? What training needs do such offices have? How can current staff, including investigative staff or law enforcement, be trained to effectively handle cases that are often considerably different than many typical criminal prosecution cases?

There are also questions related to partnerships between prosecutors and other government and nongovernmental actors. What partnerships can and should be built with labor enforcement agencies, unions, or worker organizations? How should roles in partnerships with labor enforcement agencies be defined to ensure compliance with respective ethical obligations and agency priorities?

Conclusion and recommendations

Numerous DAs and state AGS have begun to prosecute wage theft, payroll fraud, and other crimes committed by employers. These state and local prosecutors are responding to egregious violations that harm workers and communities, make it difficult for honest employers to compete, and deprive public coffers of money needed for critical safety net programs. We recommend that state and local prosecutors, state legislatures, and worker advocates build on this valuable work by taking further action. More detailed tips for getting started are included in Appendix C. Some general recommendations are as follows.

Recommendations for state and local prosecutors

Become involved. If your office has not yet become engaged in protecting workers’ rights, begin to do so. Learn more about the issue, meet with relevant stakeholder groups, review your office’s authority and potentially applicable statutes, research pressing needs in your jurisdiction, and begin to map out a plan of action.

Increase involvement. Offices that have brought occasional prosecutions in this area should continue to develop and increase their involvement.

Establish dedicated units or build existing ones. DA and AG offices without dedicated workers’ rights units should consider creating such units, using existing staff and jurisdiction if necessary. District attorney offices may consider including such units within an economic crimes, white-collar crime, financial investigations, or community protection bureau, if such bureaus already exist within the office. Offices with dedicated units should continue and expand their work in this area.

Connect with other prosecutors involved in this area, to share best practices and learn from each other.

Recommendations for state legislatures: next steps

Review statutes to assess whether they adequately address wage theft, payroll fraud, retaliation, and other crimes against workers. If appropriate, states should strengthen laws protecting workers’ rights, including laws related to civil enforcement and criminal jurisdiction. They should also provide jurisdiction for labor enforcement, both civil and criminal, to state attorneys general.

Consider establishing funding mechanisms. California’s Workers’ Compensation Insurance Fraud Program and New York’s Crimes Against Revenues Program both provide funds for prosecutions that can include violations of workplace laws, and result in recoveries for the state. Prosecutions of workers’ rights cases can sometimes generate revenue, because employers who commit payroll fraud fail to pay unemployment and other taxes.

Recommendations for worker organizations and advocates

Engage with DA and state AG offices. Worker organizations and advocates—including unions, worker centers, advocacy groups, legal services providers, and others—should consider ways to engage with the local DA’s office as well as their state AG’s office, particularly where the DA or AG have expressed support for or concern about worker issues, low-income communities, or economic and/or racial justice.

Acknowledgments

The author thanks Mackenzie Bouverat, Daniel Perez, and Nikita Rumsey for research assistance, Lora Engdahl for editing assistance, and numerous worker advocates and DA and AG government lawyers for their insights. The author also thanks the Bernard and Anne Spitzer Charitable Trust and the Justice Catalyst for their support.

Endnotes

1. This report describes the role of criminal prosecutors at the state and local level, typically including district attorneys, county attorneys, and state attorneys general. They will collectively be referred to herein as “criminal prosecutors,” “prosecutors,” or “district attorneys.” This report does not include a discussion of federal prosecutions.

2. Wage theft is the practice of employers failing to pay workers the full wages to which they are legally entitled. It includes situations in which employers refuse to pay promised wages, pay less than legally mandated minimums, fail to pay for all hours worked, keep worker tips or deductions intended for worker benefits, or do not pay overtime. In some states, the term “wage theft” is defined in the law, but more commonly it is used as a colloquial and descriptive term to refer to a set of practices. See Rosado Marzán 2021 for a detailed description of wage theft.

3. When employers wrongly treat workers as independent contractors instead of as employees, this is known as misclassification. When employers pay workers in unreported cash “off the books,” this leads to payroll fraud. Both practices result in employer failure to pay unemployment insurance taxes or buy required workers’ compensation insurance; they are often also accompanied by various forms of wage theft. Misclassification and payroll fraud harm workers, deprive public coffers of revenue, and hurt honest employers who struggle to compete with lawbreakers.

4. See the “CPR’s Crimes Against Workers Database” (Center for Progressive Reform n.d.)

5. Prevailing wage laws exist in a number of states; they generally require contractors on government contracts to pay workers at least the locally prevailing wages and fringe benefits paid on similar projects in the area. This topic is discussed in greater detail in section Three B.

6. Training materials on file with author.

7. In about half of the states, workers’ OSH Act rights are enforced by state agencies that have state plans approved by OSHA (Rosenthal 2021, note 48).

8. The difficulty of holding companies accountable for complying with federal wage and hour requirements has been analyzed by EPI research on joint-employer standards (standards that guide when contractors and the firms that use them can be held jointly responsible for complying with the law). See, for example, Shierholz and Poydock 2021.

9. An Act Concerning Criminal Offenses for Failure to Pay Wages, and, In Connection Therewith, Implementing Recommendations from the Colorado Human Trafficking Council, CO H.B. 19-1267, sec. 1, § 3(a) (2019).

10. There are also many examples in U.S. history of arrests of workers who are striking or otherwise seeking better conditions, from striking garment workers in the early 1900s to striking janitors toward the close of the century. For example, when the owners of the Triangle Shirtwaist Factory in 1909 hired “thugs” to attack striking workers, the police ultimately arrested the strikers (Greenhouse 2019; Baker 1990).

11. One academic commentator, Professor Ben Levin, has raised concerns about prosecuting wage theft and other employer crimes; however, these objections are based on general critiques of the criminal justice system and opposition to incarceration, rather than anything specific about prosecution of employers for crimes against workers. A thorough discussion of such objections is beyond the scope of this report; for those who are particularly interested in more details regarding this critical appraisal, see Levin 2018a and 2018 b; Gerstein and Seligman 2018; and Migiel-Schwartz 2021.

12. This list of sample cases seeks to provide an overview of the types of cases pursued. Thus, some examples describe charges brought but not outcomes if, for instance, charges are announced when a case is started, but the agency does not issue a press release when the case is resolved.

13. See endnote 2 above for a discussion of the term “wage theft.”

14. In Colorado, a law strengthening penalties for wage theft stemmed in part from a report by the state’s human trafficking council; the bill’s legislative declaration notes that employers who commit human trafficking “often commit other crimes such as wage theft, tax evasion, and workers’ compensation fraud,” and also that “not all victims of wage theft are victims of human trafficking.” An Act Concerning Criminal Offenses for Failure to Pay Wages, and, In Connection Therewith, Implementing Recommendations from the Colorado Human Trafficking Council, H.B. 19-1267, sec. 1, § 3(a) (2019).

15. For information about workplace sexual assault in the agriculture and janitorial industries, see Frontline documentaries “Rape in the Fields” (Cediel and Bergman 2013) and “Rape on the Night Shift” (Altan, Cediel, and Bergman 2018).

16. For a manual with practical guidance on prosecuting occupational safety and health-related crimes against workers, see McCluskey et al. 2016.

17. Various legal ethics issues arise in relation to cases that may be either criminal, civil, or both. For example, ethical rules prohibit threatening criminal charges to gain advantage in a civil suit. Prosecutors and any civil agencies referring cases should carefully review and discuss these and other restrictions as part of the process of establishing any collaborations.

18. See “Strategic Complaint Response Matrix,” Figure 6.2, p. 84 (Weil 2010).

19. “Restorative justice is an approach that focuses on meeting the needs of those who have been harmed while inviting those who have caused harm into a process of active accountability” (CCI n.d.).

Appendix A: Sample legal documents from past prosecutions of employer crimes against workers

The following list contains samples of public record documents in a range of prosecutions of employers. For simplicity and ease of reference, the listing includes the name of the prosecuting office, the state (where not included in the office name), the type of document, and year the document was filed. Documents are organized according to the primary issue in a given case; however, as discussed throughout this report, the same case may often include a number of different charges and violations.

Child labor

New York State Attorney General, misdemeanor complaint, 2014

New York State Attorney General, supporting deposition, 2014

New York State Attorney General, appellate court decision, 2018

Fraudulent garment shop licensing

California Attorney General, felony complaint, 2018

California Attorney General, declaration in support of arrest warrants, 2019

Labor trafficking

California Attorney General, felony complaint, 2018

Minnesota, Hennepin County District Attorney, complaint, 2018

New York, Suffolk County District Attorney, Singh case. Four felony complaints were filed in this case: labor trafficking, labor trafficking, offering a false instrument for filing, and scheme to defraud, all 2020

Payroll fraud primarily

California Attorney General, amended felony complaint, 2010

California Attorney General, petition to preserve property and assets, 2011

California, Alameda County District Attorney, felony complaint, 2016

California, Contra Costa County District Attorney, felony complaint, 2020

California, Contra Costa County District Attorney, forfeiture and restitution order, 2020

California, Contra Costa County District Attorney, plea agreement, 2020

New York, Suffolk County District Attorney, felony complaint, 2020

New York, Suffolk County District Attorney, indictment, 2020

New York, Suffolk County District Attorney, information, 2020

[Wage theft and payroll fraud] New York State Attorney General, indictment, 2013

Prevailing wage violations

California, Yolo County District Attorney, preliminary hearing brief, 2014

California, Yolo County District Attorney, sentencing brief, 2019

Massachusetts Attorney General, joint proposed motion and order for agreed restitution amount, 2018

New York State Attorney General, felony complaint, 2017

New York State Attorney General, indictment, 2017

New York, Kings County District Attorney, debarment stipulation, 2017

New York, Kings County District Attorney, indictment, 2019

New York, Queens County District Attorney, indictment, 2019

New York, Suffolk County District Attorney, felony complaint, 2020

Pennsylvania Attorney General, complaint and affidavit of probable cause, 2021

Pennsylvania Attorney General, sentencing order, 2021

Pennsylvania Attorney General, complaint and affidavit of probable cause, 2019

Wage theft and payroll fraud

Wage theft

California, Contra Costa County District Attorney, TRO barring dissipation of assets, 2016

Minnesota, Hennepin County District Attorney, complaint, 2013

Washington State Attorney General, Sandoval case (multiple documents): defendant’s sentencing memorandum, judgment and sentence of corporate defendant, judgment and sentence of individual defendant, all 2018

Wage theft and payroll fraud

California, Alameda County District Attorney, complaint, 2016

California, Alameda County District Attorney, order barring dissipation of assets, 2017

California, Contra Costa County District Attorney, application for TRO barring dissipation of assets, 2015

California, Contra Costa County District Attorney, complaint, 2015

California, Contra Costa County District Attorney, felony complaint, 2014

California, Santa Monica City Attorney, complaint, discovery request, 2013

California, Santa Monica City Attorney, first amended complaint, 2013

California, Santa Monica City Attorney, terms and conditions of probation, 2013

Massachusetts Attorney General, memo to aid the court regarding sentencing, 2018

Massachusetts Attorney General, statement of the case, 2018

New York State Attorney General, complaint, 2015

New York State Attorney General, felony complaint, 2015

New York State Attorney General, indictment, 2018

Workplace safety and health

New York, Kings County District Attorney, corporate summons, 2019

New York, Kings County District Attorney, indictment, 2017

New York, Kings County District Attorney, indictment, 2018

New York, Kings County District Attorney, letter to court, 2020

Appendix B: Additional sources of information about cases

While no comprehensive list of all relevant cases has been compiled, the Center for Progressive Reform maintains a “Crimes Against Workers” database.

In addition, this informal spreadsheet contains information about numerous cases that have recently been the subjects of press releases or media coverage.

Appendix C: Getting started

While this report does not include a detailed roadmap for implementing a new criminal prosecution program in a jurisdiction, the following are some tips, mostly from front-line prosecutors engaged in this work, for district attorneys’ offices wanting to get started, as well as tips for worker advocates hoping to encourage their local DAs to begin prosecuting employer crimes against workers. Finally, there are some tips for both prosecutors and worker advocates about building their relationships.

Tips for prosecutors’ offices wanting to get started

Prepare to do the work

• Conduct initial research
  • Review your jurisdiction’s criminal, labor, and insurance fraud statutes and compile a list of all laws with criminal provisions that may apply in an employment setting (even if there is no precedent). Determine what elements need to be proven.
  • Think about what background information can inform the work: the shape of the local economy, which kinds of workers are most vulnerable, who handles these cases civilly, etc.
  • Connect with prosecutors from other jurisdictions to understand how they have brought cases (even under different laws).
  • Connect with labor-focused national organizations and think tanks (like the Economic Policy Institute, the National Employment Law Project, and others) that can provide background and orientation.
• Prepare the team
  • Identify lawyers who will staff the unit (if applicable) or handle the cases. Ideally, there would be at least two: one with labor background and one with a background in criminal prosecution, although this may be difficult. Another effective combination would be to identify an attorney from the state or local labor enforcement agency who can work in close partnership with the assistant DA handling cases.
  • Train lawyers on the team regarding finding and prosecuting cases.
  • Clarify who will be responsible for conducting your investigations—local police, DA investigators, attorneys, sworn or nonsworn investigative personnel from other agencies—and try to prepare some initial trainings or find other offices that can share training resources.

• Ask big picture questions
  • Consider setting some basic parameters for cases that you will consider for criminal prosecution (such as number of workers, amount of theft, evidence of discrimination). This will help set realistic expectations for worker advocates who refer cases and help maintain those relationships. If needed, you can make exceptions to the parameters for particularly egregious cases in which criminal charges are appropriate.
  • Consider the broad goals of the work. What would constitute a “success” for your office in this area: restitution to large numbers of workers? evidence of deterrence? How might you assess your office’s impact?
• Plan for implementation issues
  • Think about what it might take for your office to collaborate with vulnerable workers: language assistance? Certain kinds of investigators? Strategic collaborations? Be sure to ensure language accessibility by having interpreters on staff or on standby if needed for interviewing witnesses. Working closely with community-based and worker organizations can enhance trust with witnesses.
  • Set up a complaint form, phone line, and e-mail submission access.

Reach out to a wide range of stakeholders and partners

• Build relationships with organizations that engage with workers
  • Identify, reach out to, and build relationships with unions, worker centers, advocacy groups, and other community-based organizations that serve and advocate for workers, as well as private and nonprofit employment and labor lawyers. In addition to organizations focusing on workers, consider reaching out to social services, immigration services, or religious organizations; community or cultural centers; and consulates.
  • It is often helpful to meet in the offices of these partner organizations or attend events they hold, to learn about what they do and who they serve. Talk to their members and ask about their experiences.
  • Offer to do a presentation on wage theft and related crimes for their members, maybe highlighting cases in other jurisdictions that may have parallels in cases in your jurisdiction.
  • Keep in regular touch so that you are top of mind and staff at these organizations feel comfortable contacting you should a particularly egregious case come to their attention.
• Connect with other government agencies
  • Get to know state agency partners—and not just those in the labor department. Include insurance regulators, revenue departments, financial institution regulators, and others. Identify, reach out to, and build relationships with other law enforcement agencies that operate in the following workplace areas: wage and hour standards, employment tax issues, health and safety, and industry-specific areas (for example, public health departments may inspect nursing homes). Research which of the laws/regulations they enforce could constitute criminal violations.
  • Meet and greet and talk about what other jurisdictions have done, and explore how coordinated enforcement can make all your cases stronger. If you have investigative resources, offer them to support joint investigations. When a specific case is referred to you, reach out to them as experts for questions related to their agencies’ jurisdiction.
  • Connect with other law enforcers in your county/state from the offices of the attorney general, department of labor, human rights, etc.
• Reach out to the employer community
  • Reach out to business associations, the local Chamber of Commerce, and the management bar, and inform them of your office’s intention to start bringing cases in this area.
  • In some industries, law-abiding employers appreciate enforcement because they lose work and struggle to compete with businesses that gain a competitive advantage by violating laws.
  • This outreach also places the community that may face prosecution on notice. In fact, outreach itself can help drive legal compliance, as concerned employers may change practices.
• Consider a general outreach campaign
  • A general outreach campaign, along the lines of the California Labor Commissioner’s “Wage Theft is a Crime” media campaign, can be helpful for raising awareness.

Select and handle cases

• Choose initial cases carefully. While your office surely selects all cases carefully, it is wise to choose your first several cases in any new area extremely carefully, so that you begin by taking on cases with egregious facts and exceedingly strong evidence, as well as witnesses committed to the case, which can be facilitated through working with community-based and worker organizations.
• Set realistic expectations regarding outcomes. Set realistic expectations with workers who are victims and witnesses regarding case outcomes, including regarding restitution amounts and likelihood of incarceration.
• Plan your investigative steps
  • Visit and observe the place of employment if open to the public.
  • Conduct interviews with as many workers as possible. Learn the witnesses’ stories. Be sure to ask what they experienced on the job (pay rates, schedules, cash or check, type of work, etc.)
  • If applicable, work closely with the organization or advocates that referred the case to you, to help build a relationship of trust with the witnesses, facilitate a thorough investigation, and foster open communication throughout the course of the investigation.
  • If possible, work closely with an investigator and financial auditor. Try to enlist a forensic accountant, who can help follow the money and be able to explain how things went bad.
  • Serve grand jury subpoenas when warranted: recipients may include the employer, payroll services, banks, insurance companies that have issued liability or workers’ compensation policies, and unemployment insurance agencies.
  • Where appropriate, obtain a search warrant if needed when you have probable cause and reliable information as to the location of payroll and employee information.

Tips for worker advocates hoping to engage with their local DAs

Prepare to do the work

• Talk with workers or members about their needs and your organizational goals, and discuss the pros and cons of engaging with the criminal justice system for these cases.
• Reach out to advocates in jurisdictions where there have been successful criminal wage theft prosecutions. Talk to the community-based organization partners there to learn how they got started, what worked and didn’t work, what challenges they faced, what they would do differently. Ask for contact information for the prosecutors and administrative enforcement agencies they worked with.
• Reach out to the administrative enforcement agencies you already work with to ask whether they have ever considered referring cases for criminal prosecution. Offer to facilitate a conversation with their colleagues in other jurisdictions who have.
• Connect with labor-focused national organizations and think tanks (like the Economic Policy Institute, the National Employment Law Project, and others) that can provide background and orientation.

Meet with your local DA’s office

• Plan before the meeting: Consider how you might best educate prosecutors about what you see happening on the ground, including different kinds of sample cases you might share with them.
• Learn about the office’s structure, jurisdiction, and staffing. Are there economic crimes or consumer protection units, which might be a good fit? Does the prosecutor’s office also have civil jurisdiction in addition to criminal authority?
• Prepare to educate them about worker issues and workplace laws. These issues may be new to them, and they may not be familiar with the labor laws in your jurisdiction. Understand that what you are asking them to do may be different from the cases they have traditionally brought. Share information about cases brought in other jurisdictions, and share resources about the growing trend of criminal prosecution of employer crimes against workers.
• Ask prosecutors and investigators what information they need, and how and when they want it presented to them. Also try to learn where resources and the law are lacking. Ask how they work differently from civil attorneys or agencies.
• Share information about the working conditions you believe should be addressed by criminal prosecution. Share compelling, egregious stories, and also information about successful prosecutions in other jurisdictions. Explain why criminal prosecutions can be so powerful in terms of deterrence and compliance.
• Offer to connect them with prosecutors from other jurisdictions who have brought cases enforcing workplace rights.
• Consider inviting your local prosecutor to your space, so they can get to know your workers and vice versa. Or invite the prosecutor to one of your organization’s meetings or events, so they can hear firsthand about unlawful working conditions from the workers experiencing them. Offer them time at a meeting or event to speak about what their office does and how the office can help the community, beyond the specific issue of prosecution of work-related issues.

Make referrals

• Ask beforehand what kind of information the office would like to receive. Ask also when referrals should be made: Sometimes prompt referrals, such as when a construction project is still ongoing, can enable covert investigation.
• Remember sensitive aspects of criminal prosecution and government work. For example, emails may be subject to freedom of information laws, and witness statements must be provided to the defense in criminal cases. Ask if prosecutors would prefer an email or phone call to start a conversation about a referral.
• Understand constraints faced by the prosecutor such as statutes of limitation and the more stringent “beyond a reasonable doubt” burden of proof.
• Be mindful of relationships among different prosecutors, agencies, and regulators: they may prefer not to have the same issue referred to multiple government offices. If you are referring the same matter to more than one office, it’s helpful to alert them.
• One of the most useful things you can do in referring a case is to help an office connect with workers who can serve as witnesses, and to help keep track of worker witnesses as an investigation and case proceed. Other helpful steps include providing background information about an employer, and helping workers gather evidence such as pay stubs, paychecks, or photographs.

Tips for both prosecutors and worker advocates about building their relationships

Discuss priorities and concerns of advocates.

Discuss relevant aspects of the prosecutor’s office, including the following: investigative process, case selection criteria, enforcement priorities, and applicable statutes of limitation.

Share information about the prosecutor’s office and worker organization as a whole, beyond the potential for case referrals.

Learn about the full scope of each other’s functions and activities:

• What areas does the office or organization work in? What services does it provide, or for an organizing group, what activities does it engage in?
• What resource limitations or constraints exist? What is the staffing level and structure?
• What are current priorities? Recent innovations?
• Are there other issues on which there is potential for collaboration, such as fighting elder abuse, affinity group fraud, or fraudulent immigration service providers?

Discuss the process for case referrals

• What kinds of cases should be referred? Are there dollar or worker thresholds?
• When and how should cases be referred? What information should be included in a referral?
• To ensure that workers are willing to come forward and report violations, prosecutors’ offices should not ask workers about immigration status. This should be explicitly discussed so that everyone involved understands the office’s practices in this regard.
• Will there be a point person on both sides?
• What information can be shared with the worker organization referring the case? There is often a significant asymmetry in the information flow, as DA offices have significant limitations in what they can share with people outside of the DA’s office.
• What are the general steps in cases and what is the typical timeline?
• How will any media coverage be handled?
• What may be included in a resolution?
• Will there be an opportunity for workers to submit victim impact statements?
• What information must be kept confidential to avoid compromising the case?

Maintain regular contact

• Even though a DA office may not accept the first few case referrals, eventually there may be a referral that works.
• Remember that both offices share the goal of protecting workers.
• Stay in communication even if there’s no case yet, and explore opportunities for collaboration. For example, the worker organization could provide training about a specific industry with high rates of violation, or the prosecutor’s office could provide a know-your-rights presentation on an issue of interest to members.

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Weil, David. 2014. The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It. Cambridge, Mass.: Harvard University Press, 2014.

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Yakin, Heather. 2019. “Crackdown on Labor Crimes in Region Intensifies.” Times Herald-Record, October 17, 2019.

Key findings

Preemption is more prevalent in the South and is embedded in a racist history.

• “Preemption” in this context refers to a situation in which state lawmakers block a local ordinance from taking effect—or dismantle an existing ordinance.
• Southern states are more likely than states in other regions to use preemption to stop local governments from setting strong labor standards that would support people struggling to make ends meet, such as raising the minimum wage and guaranteeing paid sick leave.
• The use of preemption in the South is deeply intertwined with a long history of events and actions that have reinforced anti-Black racism and white supremacy.
• Preemption laws in the South are passed by majority-white legislatures and tend to create barriers to economic security in cities whose residents are majority people of color.
• The ordinances being preempted would disproportionately benefit Black workers and other workers of color, as well as women and low-income workers.

Preemption limits cities’ ability to protect their residents from the pandemic.

• Misuse of preemption has prevented localities in some Southern states from responding to the pandemic with local policies promoting public health, such as mask mandates and stay-at-home orders.
• In addition, misuse of preemption in the past prevented these same localities from enacting policies that would have made them better equipped to deal with the pandemic now.

Case studies. In this report, we use case studies to (1) document the practice, and establish a pattern of, misusing state preemption and (2) explore the adverse implications of this state interference on workers.

Introduction

Compelled by state and federal inaction, local governments throughout the country are tackling some of the most pressing issues of our time—from public health and safety, to climate change, to protecting workers’ rights and promoting broad-based economic security. And now, local governments in many states are leading the fight for stronger public health protections against COVID-19—through mask mandates, stay-at-home orders, and paid leave provisions, among other actions.

However, in every state in the South, conservative state lawmakers have long used preemption—state laws that block, override, or limit local ordinances—to stifle local government action, often under pressure from corporate interests and right-wing groups like the American Legislative Exchange Council (Cornejo, Chen, and Patel 2018). Through preemption, state lawmakers have obstructed local communities—often majority-Black-and-Brown communities—from responding to the expressed needs and values of their residents through policies strengthening workers’ rights. Even in the context of COVID-19, state governors have taken action to preempt local measures, like masking orders, that would do more to keep vulnerable people safe.

In this report, we first look at the historical context behind preemption in the South. We track current-day preemption of workers’ rights back to state-sanctioned policies and practices rooted in racism and designed to uphold white supremacy—practices begun in the post-Reconstruction era that disproportionately disadvantage not only Black and Brown workers but also women and low-income workers.

After establishing these historical foundations, we turn to specific case studies that illustrate the wide range of worker’s rights issues on which state policymakers are interfering with local democracy and—taken in the aggregate—have preempted progress throughout the South. To the extent that the data allow, we show the specific impacts state interference has on people of color as well as women and low-income workers. For each case study, we detail the demographics of the city or county compared with those of the state, illustrating how, across the former states of the Confederacy, the voices of people of color are being suppressed by disproportionately white state legislatures (see appendix tables).

In most of the case studies, state policymakers directly preempted a specific local ordinance that was passed or that was under consideration, stripping localities of the power to adopt the ordinance in question. In some cases, state policymakers acted proactively, passing laws to prevent local policymakers from enacting or considering certain types of ordinances. Again, we make the case that this disparate effort across states and issue silos are all connected, driven by the same goal of limiting the economic, political, and social power of people of color, women, and low-income workers.

Finally, we discuss how the current COVID-19 pandemic is disproportionately harming the same communities that have been preempted from taking local action, limiting their ability to effectively combat the public health crisis.

Preemption and the legacy of racism in Southern states

State governments interfere with local authority far more in the South than in any other region

Although state interference with local decision-making occurs in every region of the country, it is much more prevalent across the South. As seen in the interactive map (Figure A), local communities in Southern states have been prevented from enacting policies on a multitude of work-related issues. Southern communities have also been blocked from implementing various other social and economic policies that are increasingly common in other parts of the country, such as laws protecting LGBTQ communities from discrimination, immigrant rights measures, environmental protections, and ordinances to authorize removing Confederate monuments (PWF 2020; Schragger and Retzloff 2019).

^{FIGURE A}

This has also held true during the pandemic. There has been friction between local and state governments across the South, including in Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and West Virginia, as these states have blocked cities and counties from imposing stricter local public health measures. For example, in Georgia, Gov. Brian Kemp sued Atlanta Mayor Keisha Lance Bottoms for imposing mandatory mask ordinances and other measures to protect public health in her majority-Black city (Haddow et al. 2020). While he has since dropped the lawsuit, he is still insisting, by way of executive order, that localities can only require masks on public property, not at private businesses (LSSC 2020c). In another illustrative example, policymakers in the two most populous Southern states, Florida and Texas, pushed schools to reopen in person, challenging the authority of local school districts to make their own slower, online reopening plans (LSSC 2020c).

State interference in local democracy is rooted in Confederate history and white supremacy in the South

State interference in local democracy is embedded in a long history of events and actions that have sought to promote the interests of historically privileged property owners and perpetuate the South’s racist past. Across the region, the configuration of government, policies, and practices are rooted in earlier efforts to limit the rights and freedoms of Black people and entrench white supremacy during the dismantling of Reconstruction-era economic and political gains and the concurrent rise of Jim Crow–era state-sanctioned discrimination (Farbman 2017).

Beginning in 1867, a series of radical Reconstruction Acts were enacted and paved the way for the rise of Black elected officials in state and local government as well as in the U.S. Congress (Sigward 2015). The military was given authority over the state judiciary and politics, and states were required to rewrite their constitutions for approval by Congress, including provisions for voting rights for all men, regardless of race. The Freedman’s Bureau was also authorized to register newly eligible voters across the former states of the Confederacy. Additionally, all men, regardless of race, but excluding former leaders of the Confederacy, could participate in constitutional conventions to form new state governments. The former Confederate states were also required to ratify the 14th amendment, which defines citizenship rights and grants citizens equal protection under the law, in order to regain representation in Congress (Sigward 2015).

Legislative seats that were once held by white slaveholders just a decade earlier were held instead by the country’s first Black members of the United States Congress (Harper and Brady 2019). About 2,000 Black public officials were elected to state legislatures and to local offices—to roles such as sheriffs, school board officials, and justices of the peace (Foner 2019). Many of these leaders were viewed as representatives not only for their states or districts, but also for Black constituencies in the region and around the country, advocating for policies to support enfranchisement and equal rights, criminalize lynching, and suppress the Ku Klux Klan (Harper and Brady 2019). But even as they were rising to positions of power and influence, supporters of the former states of the Confederacy and white supremacists were already seeking to stem their power: Elections were often marked by violence against both voters and candidates. Black elected officials often had to fight to secure their seats after winning elections because their opponents contested the results. Once in office, their colleagues actively sought to undermine their influence in the legislature.

In 1866, violence led by white conservatives in the South culminated in particularly horrific massacres of Black people in Memphis, Tennessee, and New Orleans, Louisiana. It was also in 1866 that the Ku Klux Klan first formed in Tennessee. Between 1869 and 1877, electoral backlash marked by Ku Klux Klan voter intimidation allowed white conservatives to replace Black public officials in Tennessee, Georgia, North Carolina, Virginia, and Mississippi (Foner 2019).

In 1877, the year commonly marking the end of Reconstruction, President Rutherford B. Hayes withdrew federal troops providing protection for Black communities in the South. White Southern state lawmakers continued to disenfranchise Black voters and dismantle the reforms that had been instituted after the Civil War. In this way, they were able to essentially restore the racial hierarchy of the pre–Civil War political order (Sigward 2015).

A legacy of racist symbols in the South reinforces the supremacy of whiteness and depresses economic and political outcomes today

A large spike in the number of Confederate symbols, including monuments and place names, occurred following the end of Reconstruction, during the rise of Jim Crow and segregation in the early 20th century. A second wave of new Confederate symbols was prompted by opponents to the civil rights and desegregation movements of the 1950s and 1960s, as part of a concerted effort to reinforce a white supremacist worldview (Schragger and Retzloff 2019; SPLC 2019).

Confederate symbols are closely tied to violent oppression of Black people in both the past and the present. Lynchings were used to intimidate Black voters and suppress the political power of Black communities in the South; areas that had more lynchings historically have more streets named after Confederate generals today (Williams 2019). These areas also tend to have lower Black voter registration rates and more officer-involved killings (Williams 2020; Williams and Romer 2020).

Pride in this violent history, enshrined in symbols, asserts the political and economic supremacy of whiteness. Significantly, areas with large numbers of Confederate-named streets are also more problematic economically for Black people: These areas experience worse Black–white inequality in labor market outcomes including unemployment, employment in jobs paying low wages, and overall wage disparities (Williams 2019).

States have used preemption to restrict local governments’ authority to remove Confederate monuments

As calls to remove Confederate symbols have grown, so has the reactionary movement to protect these symbols. For those seeking to do the latter, their task is as simple as calling on historical preemption laws still on the books—laws passed over the years by legislators who have unabashedly sought to protect the legacy of the Confederacy.

While Virginia recently (in April 2020) gave localities back the authority to remove Confederate monuments, seven states—Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee—still have some form of “statue statute” interfering with local governments’ ability to take down Confederate monuments, as of August 2020 (Schragger and Retzloff 2019; Thrasher 2020). In some cases, these statutes include punitive measures against localities that attempt to remove Confederate symbols, including fines in Alabama and withholding of state grants in Tennessee. Tellingly, many of the same states that preempt local control over monuments also prohibit local action on raising the minimum wage and passing paid sick time—including Alabama, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee (EPI 2018).

As shown in Table 1, these statue-protection statutes have not completely halted efforts, either by local governments or activists, to remove these racist symbols. In the seven states with laws preempting local authority over monuments, 47 Confederate symbols have been removed—17 were removed in 2020 alone (as of August). While these actions represent meaningful progress, there are still nearly 1,000 Confederate symbols in these seven states alone. Of these states, North Carolina has removed the most symbols—18. However, this accounts for just 10.2% of the 176 Confederate symbols erected in North Carolina.

Table 1

At the same time, protesters across the country have successfully pushed state policymakers to call for the removal of statues. This was the case in North Carolina, where the governor ordered the removal of Confederate monuments from the grounds of the state Capitol building (Moshtaghian and Cullinane 2020). Local policymakers can also take strong public stands, as the mayor of Birmingham did recently by ordering the removal of a Confederate statue in defiance of the preemptive Alabama Monuments Preservation Act (Burch 2020).

Preemption interacts with other policies in the South to undermine public services and worker power

The abuse of preemption is just one tool that state policymakers in the South use to suppress the political power of Black communities, reinforce white supremacy, and undermine progressive policies that would benefit not only Black workers but also other workers of color, women, and low-income . When local governments have sought to improve public services or to strengthen worker bargaining power, state policymakers in the South have interfered at every opportunity. This section provides background on two overarching goals of these policymakers, which are common themes throughout the case studies explored in this paper: (1) keeping taxes low and regressive, and (2) undermining the power of workers to maintain the present political, racial, and economic power structure.

Tax policy and public investment

Tax and spending policy in the South emphasizes a minimalist form of government focused on privileging property holders. In their comprehensive report, Advancing Racial Equity with State Tax Policy, examining the interplay of state tax policy and racial equity, Leachman et al. (2018) describe how many of the state and local tax laws that preserve structural inequality by constraining public revenues had their origins in the post-Reconstruction and Jim Crow eras.

Fearful that their large Black populations might wield political power to restructure taxes, some Southern states enacted supermajority requirements for revenue changes, starting with Mississippi in 1890. This made it next to impossible for Black voters and their allies to meaningfully raise property taxes and secure public investments in education, health care, and other public goods.

The South was also home to the first modern sales tax, adopted by Mississippi in 1932 (Leachman et al. 2018). Sales taxes are particularly regressive—costing low-income families a larger share of their income compared with higher-income families—and therefore disproportionately harm Black families, who have lower household incomes on average.

The connection between these early laws and the current state of public revenues and spending in the South is self-evident. Texas and Florida, the two most populous states in the South, have the second and third most unequal tax systems in the country, meaning they take a greater share of income from low- and middle-income families than they do from wealthy families. Two other Southern states, Tennessee and Oklahoma, are also among the 10 least equal states in terms of taxation (ITEP 2018).

Their tax structures are not just unequal, but they are also inadequate. Southern states rank particularly low in state tax collections per capita and in other revenue sources, including fees and user charges (such as tolls for roads and bridges) (TPC 2020a). As a result, the unweighted average of per-capita direct state and local general expenditures in the South in 2017 was lower than in the rest of the country (TPC 2020b). Southern states, by and large, spend less on both education and health care than other states (NSB 2020; Urban Institute 2020). At the same time, the nine states with the highest incarceration rates are in the South, meaning these states are pouring excessive resources into an oppressive criminal justice system while neglecting public services that are badly needed (The Sentencing Project 2020).

With so few resources generated for and invested in public services, it is perhaps not surprising that the South has the highest poverty rates, the worst infant mortality rates, and the lowest educational attainment of any region in the United States (CDC 2018; U.S. Census Bureau ACS 2019a, 2019b).

This insistence on undercutting public investment at every turn persists even when the cost to taxpayers would be minimal, as illustrated by Medicaid expansion in the states under the Affordable Care Act (ACA), for which the federal government foots the majority of the cost. Eight states in the South have not yet expanded Medicaid and, as of 2018, 92% of uninsured adults who would have health insurance if their state chose to expand Medicaid were residing in the South (Garfield, Orgera, and Damico 2020).

The rise of so-called right-to-work laws

Southern state lawmakers also sought to limit Black workers’ power in the workplace through the passage of so-called right-to-work (RTW) laws. These laws undermine workers’ collective bargaining power by allowing workers at unionized firms to benefit from a collective bargaining agreement without paying their fair share toward the union’s costs of negotiating and administering the agreement. RTW laws undermine the financial strength of unions, thereby limiting their ability to win better benefits, wages, and working conditions for their members. RTW laws have been shown to lower workers’ wages and benefits in the states where they have been enacted (Gould and Kimball 2015).

Efforts to enact RTW laws began in the South, with the first RTW laws adopted in Arkansas and Florida in 1944. The initial efforts to push RTW laws are credited primarily to Texas businessman and lobbyist Vance Muse and the Christian American Association (CAA). Using arguments equating union growth with race-mixing and communism—and with financial backing from wealthy Southern planters, oil companies, and allied industrialists—Muse and the CAA succeeded in passing a variety of anti-union laws, including RTW laws, in the South in the 1940s (Kromm 2012; Pierce 2017). RTW laws were designed to help entrench existing political power structures by undermining workers’ collective voice and ensuring that workers remained divided along racial lines (Pierce 2017).

When the Congress of Industrial Organizations (CIO), one of the country’s largest national labor organizations, began its “Operation Dixie,” hoping to organize workers in the South, Southern Democrats in Congress joined with northern Republicans in voting for the 1947 Taft-Hartley legislation that undermined union organizing, in part by explicitly authorizing state RTW statutes (Kahlenberg and Marvit 2012). Following the passage of Taft-Hartley, a wave of Southern states enacted RTW laws (NCSL 2020b).

The impacts of the South’s anti-union efforts are stark. As of today, every state in the South is an RTW state, and all three states that ban collective bargaining by public employees are in the South: North Carolina, South Carolina, and Virginia (Barber 2020). The six states with the lowest rate of workers represented by unions are all Southern states: South Carolina, North Carolina, Georgia, Texas, Virginia, and Tennessee. Of the 10 states with the lowest rate of union representation, eight are Southern states (BLS 2020a).

Case studies of state interference with local business and labor standards ordinances

Minimum wage: Birmingham, Alabama

In 2016, the Birmingham City Council passed an ordinance raising the city’s minimum wage to $10.10 per hour. The Alabama state legislature blocked the ordinance, bringing the city’s minimum wage back down to $7.25 per hour.

Alabama is one of five states—all in the South—that would not have a minimum wage at all if it were not for the federal minimum wage of $7.25 an hour (EPI 2020). Last raised in 2009, the federal minimum wage is worth significantly less today than in previous decades. At its high point in the late 1960s, the federal minimum wage was equal to roughly $10.35 in today’s dollars—about 43% higher than it is today. Since then, Congress has enacted infrequent and inadequate adjustments to the federal wage floor, such that a working parent of one child working full time and being paid the federal minimum wage today has earnings below the federal poverty line (Cooper, Gould, and Zipperer 2019).

In 2016, faced with this decline in the real value of the minimum wage, local lawmakers in Birmingham, Alabama, passed an ordinance that established a city minimum wage of $10.10 an hour. In doing so, Birmingham joined roughly two dozen cities and counties throughout the U.S. that had similarly established local minimum wages.

Alabama is a Dillon’s Rule state, in which local authority is strictly limited to only those powers granted by the state—therefore, the fate of Birmingham’s minimum wage ordinance was already uncertain. But the state legislature was not taking any chances that the local minimum wage law would be allowed to stand. Within just two days of the ordinance’s passage, the Alabama state legislature blocked Birmingham and other localities in the state from establishing their own minimum wages (Roth 2016).

Alabama is one of 25 states to bar local governments from setting minimum wages that are different from the state minimum wage (EPI 2018; NELP 2019). In theory, preemption could be used in such a case to ensure consistently high standards across a state—that is, to prevent local governments from setting a local minimum wage that is lower than the state minimum wage. That is not the case here. In fact, in 18 of these states, including Alabama and nine other Southern states, the state minimum wage is equal to the federal minimum wage of $7.25 an hour—so it’s not possible to go lower (EPI 2020).

In an effort to reinstate the higher local minimum wage, Birmingham fast-food workers, Black state lawmakers, and civil rights groups filed suit against the state’s attorney general. They argued that the attorney general had a duty to inform lawmakers that the law negating Birmingham’s minimum wage was unconstitutional because it “perpetuates Alabama’s de jure policy of white supremacy, in particular its suppression of local black majorities through imposition of white control by state government” (Koplowitz 2019). Although the lawsuit was dismissed on procedural grounds, the data, discussed below, show that the plaintiffs’ arguments have merit.

The decision by the Alabama state legislature to block the Birmingham minimum wage is a clear example of a majority-white legislature using its power to block communities of color from adopting laws benefiting their communities. According to data from the 2018 American Community Survey, almost 69.2% of Birmingham’s residents are Black while just 22.1% are white. When Birmingham’s population is compared with Alabama’s state legislature, the racial disparity is stark: 75.0% of state legislators in Alabama are white and only 22.1% are Black (see Appendix Table 1).

In blocking Birmingham’s minimum wage ordinance from taking effect, the state legislature prevented local leaders from taking action to address the needs of the city. In 2018, Birmingham’s poverty rate among working-age people was 23.7%—dramatically higher than the statewide working-age poverty rate of 14.5%. Yet local leaders were blocked from enacting a policy that effectively reduces poverty.

As shown in Figure B and Table 2, stopping Birmingham’s minimum wage from taking effect denied pay raises to an estimated 65,000 low-wage workers, 19.1% of the local workforce. Note that the minimum wage impact data in the figure and table reflect estimates for Birmingham’s Jefferson County, which includes Birmingham and surrounding areas.

Figure B

Table 2

The Birmingham minimum wage case also reveals how the decision by a white, male-dominated state legislature to strip local governments of their ability to respond to the needs of their constituents disproportionately harms women and communities of color. Table 2 shows that a higher Birmingham minimum wage would have disproportionately helped Black workers: 26.2% of Black workers in Birmingham’s Jefferson County would have received a raise, compared with just 14.2% of white workers. While Black workers make up just 31.5% of the Jefferson County workforce, they would have made up 43.1% of all workers receiving higher pay due to the higher minimum wage. It is also worth noting that the majority of low-wage workers who would have benefited from the higher minimum wage are women. As shown in Table 2, 53.8% of the workers who would have received a raise because of the higher local minimum wage are women.

Occupational tax: Montgomery, Alabama

In February 2020, the Montgomery City Council passed an occupational tax to provide additional funding for public services. The Alabama state legislature passed a bill to nullify the ordinance.

In February 2020, the Montgomery, Alabama, City Council passed a measure establishing an occupational tax (a payroll tax levied on employees who work in the city) of 1%. The tax was intended to provide additional funding for public services, and it supported the hiring of additional public employees (WSFA Staff and Bowerman 2020). In anticipation of the tax passing, and in defiance of a letter signed by the mayors of the 10 largest cities in Alabama, the state legislature moved to strip cities of the ability to levy occupational taxes (AP 2020). The new law, passed in March, does not impact the occupational taxes that were already in place in more than 20 Alabama cities prior to February 2020, but it nullified the Montgomery measure. Going forward, cities must now obtain permission from the state legislature before they can raise their occupational taxes above the levels they were at as of February 1, 2020 (Cason 2020).

Here again, a majority-white state legislature overrode the will of local lawmakers representing a majority-Black city. As previously noted, the Alabama legislature is 75% white. Nearly two-thirds (60.8%) of Montgomery residents are Black, compared with one-quarter (26.7%) statewide (see Appendix Table 1). Four of Montgomery’s nine city council members are Black (MacNeil 2019). While the council is still whiter than Montgomery’s majority-Black population, it is still much more representative than Alabama’s state legislature.

The need for additional revenues such as those that would have been provided by the Montgomery occupational tax is clear. Alabama, like most states, has a regressive state tax system that needs progressive overhaul (Gundlach 2020). In fact, its system is even more regressive than most states in that its residents must pay the full sales tax on groceries (Figueroa and Legendre 2020). Under Alabama’s regressive system, residents in the lowest income group pay the largest share (9.9%) of their income in total taxes, while Alabamans with the top 1% of families pay 5.0% of their income in taxes (ITEP 2018).

The additional revenue from the Montgomery payroll tax was intended to go toward bolstering public safety, education, infrastructure, and other public programs, including salaries for additional public employees (WSFA Staff and Bowerman 2020). In Alabama, as in communities across the country, women and Black workers are disproportionately employed in state and local government (Cooper and Wolfe 2020). As shown in Figure C, women account for nearly three in five state and local government employees in Alabama, whereas they make up less than half of the private-sector workforce. Black workers are also somewhat overrepresented (26.9% of the state and local government workforce compared with 25.8% of the private-sector workforce) as are women of color (19.7% compared with 17.1%; see Table 3). The Montgomery occupational tax aimed to bolster progressive revenue streams at the local level to strengthen local programs and services—goals that should be encouraged, not blocked.

Figure C

Table 3

Targeted and local hire laws: Nashville, Tennessee

In 2015, Nashville voters passed a ballot initiative requiring that a share of work hours on municipal construction projects go to local and low-income workers. The Tennessee state legislature passed a bill overriding the ballot initiative.

Targeted and local hiring policies support job opportunities by requiring that a minimum percentage of work hours created by a development project be set aside for job seekers from low-income communities within the city or county, especially low-income communities of color. These policies provide good jobs to local residents in communities that often experience barriers to employment (Cornejo, Chen, and Patel 2018).

In 2015, Nashville1 voters approved, by a 58% to 42% margin, a local ballot initiative backed by local community and labor organizations. The proposed ordinance required that for municipally funded construction projects that cost $100,000 or more, 40% of construction work hours must go to Nashville residents, with 25% of those work hours (or 10% of the overall work hours) going to low-income Nashville residents. Just weeks after the city passed the ordinance, the state legislature introduced and passed a bill to override it. With the governor’s signature, it became the first state prohibition on municipal-level local hire laws in the country (Woodman 2016).

Tennessee is no stranger to preemption. The state limits municipalities from implementing minimum wage, paid leave, and anti-discrimination laws, to name a few (DuPuis et al. 2018). And it took no time for state legislators to step in to override the will of Nashville voters. As state senator Jack Johnson, the bill’s sponsor, put it: “Another issue that has been brought in opposition to my bill, which would nullify the charter amendment, is that we are overturning the will of the voters of Nashville. In fact we are” (Ebert 2016).

The state legislative override of the Nashville local hire initiative is another example of state legislators thwarting the will of local communities of color. In Nashville, 44.1% of residents are people of color, while 82.6% of state legislators in Tennessee are white and 84.6% are men. Just 12.9% of Tennessee state legislators are Black and 0.8% are Latinx (see Appendix Table 2).

Guaranteeing that 40% of construction work hours on municipally funded projects go to Nashville residents would substantially increase the chances of Black, Latinx, and immigrant workers being hired for this work. As shown in Figure D and Table 4, about one in seven construction workers living in Nashville are Black (14.5%), while workers in the larger Nashville metropolitan area that extends beyond Davidson County (Nashville-Davidson-Murfreesboro-Franklin, Tennessee) are half as likely to be Black. The trend is even more pronounced for Latinx workers, who make up nearly half (46.2%) of construction workers in Nashville, compared with a quarter (25.1%) in the greater metro area and fewer than one in five (18.2%) in Tennessee.

Figure D

Table 4

Immigrant workers also would have benefited from the local hiring initiative, if the will of Nashville voters had not been overturned. Just about half (49.5%) of all construction workers in Nashville were born outside the U.S. and 45.0% are not U.S. citizens. Immigrant construction workers are far more concentrated in Nashville than in the Nashville metropolitan area (23.0%) or Tennessee overall (16.1%).

To sum up: In addition to disregarding the will of Nashville voters, Tennessee legislators directly blocked a policy that would stand to benefit Black, Latinx, and immigrant workers. Without targeted local hiring policies, workers from these communities are more likely to be denied job opportunities due to systemic racial discrimination in hiring practices (Quillian et al. 2017). The failure of state legislators to support this policy also deprives communities of transparency regarding hiring in the construction industry for publicly funded projects in their communities.

Around the country, local and state governments have made effective use of targeted and local hiring measures on major economic development and construction projects to deliver good jobs to local communities. By voting for a measure that would ensure more construction job opportunities go to Nashville residents, voters chose to provide opportunities to Black, Latinx, and immigrant workers in their community. Voters sent a clear message that when their tax dollars are spent on development, those dollars should be bolstering the economic security of Nashville residents. As many Southern states see an increase in the number of development projects and other public infrastructure investments in their communities, targeted and local hiring measures will serve as a critical component for ensuring racial and economic equity and inclusion in the South.

Paid sick leave: Dallas, Texas

A paid leave ordinance was set to go into effect in Dallas, Texas, on April 1, 2020. On March 31, a Texas federal court judge blocked the ordinance after state legislators’ attempts to block it failed.

When workers do not have access to paid sick leave, they are forced to choose between their economic security and the health of themselves and their families. The workers who are the most economically precarious, who stand to lose the most by missing a day of earnings, are also the least likely to have access to paid leave. Paid sick leave is particularly important for women in the workforce, who are more likely than men to have caregiving responsibilities. Having access to paid sick days allows parents to stay home from work when their child is sick and increases their ability to stay in the labor force (Milli and Williams-Barron 2018). Despite these benefits, no states in the South require all employers to provide paid sick leave (ABB 2019).

For many service workers—for example, restaurant workers—going to work while ill could also pose an increased contagion risk to the greater community (NPWF 2020; Ibarra 2018). The coronavirus pandemic has made many realize the public health implications of going to work while sick—a realization that should underscore the importance of paid leave, even during “normal” times.

Over the past two years, the cities of Austin, San Antonio, and Dallas, Texas, have all passed laws requiring that businesses provide their employees with paid sick leave (Dailey and Douglas 2020). State legislators in 2019 attempted, but failed, to pass legislation to block these local paid sick leave laws. Undeterred, right-wing lawmakers in Texas and their business allies turned to the Texas court system to try to block the local paid sick leave ordinances, succeeding in receiving injunctions for the Austin and San Antonio ordinances in 2018 and 2019, respectively (Samuels 2019; Dailey and Douglas 2020). On March 31, 2020, in the face of a global pandemic, a federal judge blocked Dallas from enforcing its paid sick leave law, which was set to go into effect the next day (Dailey and Douglas 2020). All three ordinances are still on hold pending court action.

As shown in Table 5, two in five (41%) of workers in Dallas, a total of 301,838, do not have access to paid sick leave (Milli and Williams-Barron 2018). Access rates for Black workers in Dallas fall below access rates for white workers, with 37% of Black workers lacking paid sick leave compared with 31% of white workers (see Figure E). The majority (55%) of Latinx workers in Dallas do not have access to paid leave. The vast majority (71%) of the workers who would benefit from a paid leave ordinance are people of color.

Figure E

Table 5

The Dallas paid leave ordinance would particularly benefit lower-income workers, who are much less likely to have access to paid sick leave. Fewer than one in three full-time (35 hours or more), full-year workers in Dallas whose income is less than $15,000 per year have paid leave, compared with the vast majority (85%) of workers who earn $65,000 or more (Milli and Williams-Barron 2018).

By blocking these paid leave measures through the courts, right-wing legislators and the business community have shown their disregard for the health of the 4.3 million Texas workers who do not have access to paid leave. Paid leave represents an investment in public health (Lewis 2019), because it prevents workers who are sick from exposing their co-workers and the public to illness. Yet as the Texas experience shows, even in the face of a global public health crisis, the fight to deny workers paid leave continues.

In fact, the pandemic has created additional opportunities for the misuse of preemption to prevent policies that would promote public health. Southern states—including Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and West Virginia—have prevented localities from enacting local public health measures that are stricter than statewide stay-at-home orders.

Case studies involving proactive preemption, in which localities are blocked before they can even consider policies that could benefit their residents

As we have shown, state lawmakers in the South often override local initiatives benefiting local residents. In other cases, local communities lose their ability to make positive change before they have even contemplated action on the issue. This section details some of these cases. We describe actions taken by state policymakers to block local democracy, and we show how local communities could have benefited from the potential measures in question, based on the positive impacts such measures have had where they have been enacted. At bottom, it is clear that local communities have been deprived of the opportunity to benefit their residents because of the chilling effects of state interference.

Fair scheduling: Atlanta, Georgia

In 2017, the Georgia state legislature passed a law prohibiting local governments from implementing fair scheduling regulations, even though no cities in Georgia had such a law. Fair scheduling could benefit 28,991 workers in Atlanta and 750,926 workers statewide who work in retail and food service.

The Georgia legislature has frequently acted to prevent local governments from protecting and empowering workers, including prohibiting local paid leave and minimum wage ordinances (EPI 2018). As discussed earlier in this paper, paid sick leave and minimum wage ordinances are particularly critical for raising the living standards of Black and Brown workers and women.

In 2017, Georgia joined the list of states that have passed laws prohibiting localities from implementing fair scheduling regulations (EPI 2018; Donohue 2017). By prohibiting its cities and counties from requiring that employers give additional notice or pay to employees when their schedules are changed, Georgia is once again preventing communities from adopting labor standards that would disproportionately benefit women and workers of color.

Many workers, especially hourly and low-wage workers, are subject to unpredictable schedules (Vogtman and Tucker 2017). Under the guise of flexibility, employers leverage technology to make last-minute and inconsistent scheduling decisions. The result is that workers are required to give up their own freedom and flexibility (CPD 2018). These unfair scheduling practices can take many forms, which can be used in combination, compounding their negative effects. Some employers use “just-in-time” scheduling, often with the aid of scheduling software, to make last-minute staffing decisions in response to anticipated changes in demand. Another tactic is on-call scheduling: Workers are asked to stay available, generally without compensation, but are not told whether they are required to come in until just hours before the shift. Workers may also be asked to work unreasonable shifts, for example, a “clopening”—a late closing shift followed by an early opening shift (Vogtman and Tucker 2017; Schneider and Harknett 2019). Each of these practices is quite widespread within the retail and food service industries (Schneider and Harknett 2019). While unfair scheduling is certainly not limited to retail and food service, most fair workweek laws do focus on protecting workers in those industries (Wolfe, Jones, and Cooper 2018).

These unpredictable scheduling practices wreak havoc on workers’ lives. Workers must plan their time, spending, and savings around these inconsistent (and often insufficient) hours. Unpredictable scheduling can negatively impact workers’ access to child care and health care, since day care centers often require consistent drop-off schedules and doctor visits require advance appointments. Enrolling in additional training and education can be next to impossible when you are required to “stay available” for shifts (Vogtman and Tucker 2017). Even when compared with peers with similar wages, retail and food service workers with less predictable schedules were more likely to experience material hardship, such as going hungry or being unable to pay bills (Schneider and Harknett 2019).

Furthermore, unfair scheduling practices can make it difficult to schedule job interviews or shifts at other jobs, preventing workers who are part time but would like to work more hours from getting full-time work or another part-time job (Golden 2015). Part-time work and lower hours are more prevalent in wholesale and retail trade, as well as in leisure and hospitality (which includes restaurants), than in the overall workforce. At the same time, part-time workers in these industries are also more likely to want full-time work than their peers in the overall workforce (BLS 2020c).

Since Black, Latinx, and Asian workers, and women of any race, are all disproportionately likely to be employed in restaurants or bars, they would also stand to gain the most protection from scheduling fairness legislation. Nationwide, Latinx workers make up 26.8% of all workers in the food service and bar industry, and Black workers account for 13.2% (compared with 17.6% and 12.3% of the overall workforce, respectively). Asian workers are also disproportionately likely to work in food service or bars, making up 7.5% of that industry compared with 6.5% of the overall workforce. Women account for a majority (52.1%) of this industry despite making up just 47% of the overall workforce (BLS 2020b).

Retail and food service workers of color, and particularly women of color, are more likely to experience unstable schedules than their white peers, an inequity that persists even when controlling for other demographic characteristics and education (Schneider and Harknett 2019).

Because of the clear importance of predictable scheduling to workers, a number of cities and one state have adopted scheduling fairness laws. As of 2018, 1.8 million workers in New York City, San Jose, Seattle, San Francisco, Emeryville (California), and the state of Oregon were protected by fair workweek laws that focused largely on retail and fast-food workers (Wolfe, Jones, and Cooper 2018). In the last year, fair workweek protections have also taken effect in Chicago and Philadelphia, with Chicago’s ordinance covering workers in health care facilities, building services, and hotels in addition to restaurant and retail workers (HR Dive 2019).

In Table 6, we show the number and demographics of nonmanagerial workers in retail and food service. By proactively preempting fair scheduling laws, the Georgia state legislature has denied local governments the opportunity to protect the 750,926 Georgians who work in retail and food service, not to mention workers in other industries who would stand to benefit from broader fair workweek protections.

Table 6

In particular, if Atlanta were to enact fair workweek legislation, 28,991 workers in retail and food service would stand to benefit. The majority, or 14,627, of those workers are Black. Women also stand to benefit from a fair workweek law focused on these industries, since they make up over half of this workforce both in Atlanta and statewide.

This state interference not only has an outsize impact on Black and women workers, but it also negates the voices of Black voters in Atlanta. Nearly half (48.0%) of the voting-age citizen population in Atlanta is Black, compared with less than one-third (32.0%) statewide (see Appendix Table 4). The state legislature, which is 69.5% white, is not representative of Black workers and the population whose authority they are preempting.

Platform ‘gig’ economy: Kentucky

In 2018, the Kentucky state legislature passed an expansive law classifying workers on “marketplace platforms” as independent contractors, which excludes them from key labor standards.

With the growth of the digital platform (“gig”) economy, much attention has focused on the issue of whether individuals performing services through an online platform such as Uber, Lyft, Handy, or TaskRabbit should be considered employees or whether they are independent contractors. The distinction makes a significant difference to workers. Independent contractors, who are viewed by the law as being in business for themselves, are not covered by unemployment insurance, workers’ compensation, minimum wage laws, overtime protections, paid leave laws, anti-discrimination laws, or most health and safety laws, and they do not have the right to form unions and engage in collective bargaining (Carré 2015). Employers do not pay payroll taxes, workers’ compensation, or unemployment insurance premiums on independent contractors. The distinction between employees and independent contractors is one of real substance, for workers, employers, and government programs.

Misclassification occurs when businesses deem workers “independent contractors” when those workers should be considered employees. By misclassifying workers, businesses avoid paying payroll and workers’ compensation taxes—saving themselves up to 30% while costing states and localities millions of dollars in lost revenue (NELP 2017).

Misclassification affects workers across industries, including construction, restaurants, janitorial services, and trucking. Lately, much attention has been paid to the misclassification of gig economy platform workers. Platform companies such as Uber and Lyft have maintained that their drivers are independent contractors who simply use Uber or Lyft’s technology to connect with their own customers. However, platform companies in fact play a large (often unilateral) role in setting pay and determining work hours and conditions. Many platform workers, including ride-share, delivery, and domestic workers, face hazardous workplace conditions and low pay. This makes it particularly egregious to exempt them from minimum wage and workers’ compensation protections (Smith 2018).

To protect workers from misclassification, state policymakers can set standards for who can be considered an independent contractor under state law. California adopted such a measure in September 2019, establishing a statewide “ABC” test for determining whether a worker is an employee or an independent contractor. When this California law was passed, however, gig economy companies such as Uber, Instacart, and DoorDash made their opposition clear by pledging to spend $110 million on a ballot initiative that would exempt them from the law (McNicholas and Poydock 2019). Uber and Lyft have refused to comply with the law and have been sued by the California attorney general and several city attorneys for noncompliance. A San Francisco Superior Court judge ruled against the companies and said they must treat their drivers as employees, although they are allowed to maintain the status quo for now while awaiting a decision by the court of appeals (Bond 2020).

In 2018, Kentucky took an entirely different approach, passing an expansive law prohibiting local governments from treating workers on “marketplace platforms” as employees by deeming them “marketplace contractors,” not employees. Any worker who uses a digital network or application to connect with those who are seeking their services—in other words, any gig economy platform worker—is deemed a marketplace contractor under Kentucky law. Nearly identical bills were introduced in nine other states during the 2018 legislative session (Smith 2018). In most of these cases, the legislation was drafted by Handy, an online building services platform (Kessler 2018). Passage of the marketplace contractor legislation is yet another example of businesses lobbying for lax state-level regulation to preempt city laws that would protect workers (James 2018).

The impact of the law on digital platform workers in Kentucky is extensive. The number of digital platform workers has grown significantly in recent years: Between 2012 and 2016 alone, the share of Kentuckians who were doing online platform gig work grew from just 0.01% to nearly half a percent (Collins et al. 2019). In 2016, there were more than 10,000 online platform economy workers in Kentucky—all of whom could potentially be misclassified with the aid of the 2018 law (Collins et al. 2019).

We estimate that as of 2016, there were between 3,822 and 7,527 workers in Louisville who earned money using an online labor platform. These estimates, based on Collins et al. (2019), use the shares of online platform workers in nearby cities.2 Our low estimate is based on Memphis, where 1.0% of workers reported earnings from online labor platforms, and the high estimate is based on 2.0% of workers in Columbus. Even this high estimate is likely an undercount, since we use the number of income tax returns filed by Louisville residents (373,690) to estimate its full workforce whereas Collins et al. had access to detailed administrative IRS data including the number of non-filers.

The 2018 law disproportionately impacts workers of color. Black and Latinx adults are more likely to earn money through online platform work than their white peers, so they are more likely to be deprived of important workplace protections because of their misclassification as “marketplace contractors” under the Kentucky law. In 2016, Black adults were nearly three times as likely to have worked using online labor platforms as white adults, and Latinx adults were more than twice as likely to have worked using online labor platforms as their white peers. People of color who have worked using online job platforms are also more likely than white gig workers to see that source of income as essential or important, rather than “nice to have” (Smith 2016).

Gig economy companies conspired with state lawmakers in Kentucky to protect their own interests and to overrule the authority of communities. In Louisville, this represents a silencing of a population that has a higher share of Black people (11.0%) than the state overall (7.8%) and that is not well-represented by the state legislature, which is 92.0% white (see Appendix Table 5).

‘Ban-the-box’: Mississippi

“Ban-the-box” policies reduce barriers to employment for the formerly incarcerated. But, since 2014, Mississippi has prohibited localities from adopting laws “that in any way interfere with an employer’s ability to become fully informed of the background of an employee or potential employee.”

As many as four in 10 people in the United States possess a criminal record, which creates barriers to housing, education, voting rights, and employment (Eberstadt 2019). Regarding employment, “ban-the-box” policies reduce barriers for formerly incarcerated people and people with arrest and conviction histories by delaying employer inquiries about an applicant’s criminal record until later stages in the hiring process. These policies prohibit employers from requiring applicants to disclose their criminal history on an initial application so that the initial employment consideration is made on job-related factors.

According to 2012 guidance issued by the Equal Employment Opportunity Commission, ban-the-box policies reduce employment discrimination based on race and national origin, particularly since Black and Latinx people are arrested, convicted, and incarcerated at higher rates than white people due to structural racism in policing, sentencing, and incarceration (EEOC 2012). Rather than automatically disqualifying candidates based on the stigma of a criminal record, ban-the-box policies allow employers to first evaluate applicants based on their skills and qualifications. At later stages of the hiring process, an employer may then inquire about and assess a relevant criminal record that could impact an applicant in a specific occupation or work setting.

Prompted by a nationwide movement led by a grassroots organization, All of Us or None, based in Oakland, California, ban-the-box laws have been increasingly adopted across the country (Evans 2016). In 2016, the Obama administration directed federal agencies to “ban the box” for federal government jobs (White House 2016). As of July 2019, 35 states and over 150 cities and counties have adopted ban-the-box policies. Currently three-fourths of people living in the U.S. live in an area that has banned the box. This includes several Southern states, including Georgia, Kentucky, Louisiana, Oklahoma, Tennessee, and Virginia, as well as many cities and counties with similar or more expansive policies, including Austin, Dallas County, San Antonio, Birmingham, Jacksonville, Miami-Dade County, Orlando, St. Petersburg, Tampa, Charlotte, Durham County, and Winston-Salem (Avery 2019).

A recent study found that, for people with conviction histories, ban-the-box policies increase the likelihood of obtaining a public-sector job by about 30% on average (Craigie 2017). Furthermore, the study did not find evidence that these policies resulted in discrimination against the very population they are intended to benefit, as some scholars have argued they would. Other studies of cities and counties that have implemented ban-the-box policies—including Durham, the District of Columbia, and Atlanta—have found similar positive employment impacts for people with arrest and conviction histories (Atkinson and Lockwood 2018; Juffras et al. 2016; Emsellem and Avery 2016). Studies show that employment is the single most important factor in reducing the likelihood of returning to jail or prison (Berg and Huebner 2011). Employment after incarceration provides critically important income to allow formerly incarcerated people to support themselves and their families.

In Mississippi, there is growing support for a statewide ban-the-box policy—while recently introduced legislation ultimately failed to pass both chambers, it did receive bipartisan support.3 However, since 2014, Mississippi has prohibited localities from adopting laws “that in any way interfere with an employer’s ability to become fully informed of the background of an employee or potential employee.”4 This law interferes with the ability of cities to pass local ordinances to ban the box for public-sector applicants and contractors, as well as for private-sector job applicants, as many neighboring states and cities have done.

The inability of localities to enact ban-the-box policies especially harms employment prospects for Black and Latinx people, who are more likely than white people to be incarcerated in Mississippi (and in other states) due to over-policing and structural racism (Hinton, Henderson, and Reed 2018). Mississippi has an incarceration rate of 1,039 per 100,000 people, meaning it imprisons a higher percentage of its people any other state in the country excepting Oklahoma and Louisiana (Wagner and Sawyer 2018). This includes those in prisons, jails, immigrant detention centers, and juvenile justice facilities. People from Black and Latinx communities are overrepresented among Mississippi’s incarcerated population (at 57% and 12%, respectively), while white people are underrepresented (30%), compared with their overall representation in the state (37%, 3%, and 58%) (PPI 2020).

National research on pre-incarceration income and unemployment finds that three years before incarceration, just 49% of working-age people were employed, and on average they were paid less than $15,000 a year (Looney and Turner 2018). This means that, for many, the economic insecurity following incarceration compounds the challenges they were already facing. Incarceration also further highlights income disparities for Black and Latinx formerly incarcerated people, who experience lower incomes when compared with white formerly incarcerated people (Western and Pettit 2010). Among people on probation, two-thirds are paid less than $20,000 per year (Finkel 2019). Banning the box supports employment opportunities for the formerly incarcerated and for others with arrest and conviction histories, many of whom were already struggling to make ends meet.

Public-sector employment, the sector in which ban-the-box policies are often first applied, has historically been at the forefront of anti-discriminatory employment, initially through measures that regulated the federal government. Eventually, anti-discrimination regulations were extended to state and local governments, making them generally more equitable and inclusive workplaces for women and Black workers (Cooper, Gable, and Austin 2012). As shown in Figure F and Table 7, Mississippi is no exception. Women account for more than three in five state and local government workers in Mississippi (61.6%), a much greater share than in the private sector. Black workers are also disproportionately represented in Mississippi state and local government, accounting for two in five workers in that sector (40.6%) compared with just over one in three (35.7%) in the private sector.

Figure F

Table 7

Banning the box for government employees in Mississippi would once again put the public sector on the front lines of anti-discrimination. While more equitable hiring policies should certainly be extended into the private sector as well, focusing first on passing ordinances in the public sphere can allow localities to pave the way for even more transformative change. If Mississippi localities incorporate these values into their government hiring practices, it could result in larger shares of Black, Latinx and other residents impacted by incarceration in the Mississippi public-sector workforce.

Prevailing wage: New Orleans, Louisiana

Since 2011, Louisiana has prohibited cities and counties from enacting prevailing wage ordinances. Prevailing wage laws ensure that contractors on public construction projects do not drive down local wage standards by underpaying their workers. We estimate that implementation of a prevailing wage law in New Orleans could increase the typical construction worker’s annual earnings by roughly $5,000.

Since 2011, Louisiana has prohibited cities and counties from enacting prevailing wage ordinances. Such laws govern the construction contracts that cities or counties enter into with private contractors for city or state construction projects, requiring that the contractors pay their workers at least the prevailing wage in the city or county for the type of work being contracted. The policies’ definitions of “prevailing wage” vary from location to location, although they generally reflect a commonly held or dominant wage.

Prevailing wage laws are common throughout much of the United States. Contracting by the federal government has been subject to prevailing wage regulation since 1931, with the passage of the Davis-Bacon Act (Mahalia 2008). As of January 2020, 26 states and the District of Columbia have some form of prevailing wage law (DOL 2020). Louisiana is one of the 24 states without such a law.

The rationale for prevailing wage laws is straightforward: Communities do not want public contracts to drive down local wage standards. Because contractors typically must bid to work on public projects, without a prevailing wage requirement, firms may cut wages in order to win contracts. This obviously harms employees of the individual construction firm and, more importantly, it also pushes down wages throughout the industry as rival firms respond with similar cuts when making their bids. Prevailing wage laws preserve wage levels for construction workers and ensure that contractors compete for government projects based on efficiency, management skill, material costs, and the productivity of a firm’s employees.

Despite the clear benefits of prevailing wage laws, in June 2011, then-Governor Bobby Jindal signed a bill passed by the Republican majority in the Louisiana legislature prohibiting any public entity in the state from establishing standards—such as requiring certain wage rates—on any public contracts (NCSL 2020a). Louisiana is one of the nine states that Diller (2012) classifies as “home rule, but skeptical of local authority.”5 Notwithstanding Louisiana’s home rule tradition, the state legislature stripped local communities’ ability to establish wage standards on publicly funded projects. This is not the only time that the legislature has gone against the home rule tradition. In fact, in 1997 Louisiana became the first state to pass a law preempting local minimum wage ordinances. Community, faith, and labor groups in Louisiana have joined together to advocate for the repeal of the 1997 minimum wage preemption law, as well as paid sick leave preemption, in the “Unleash Local” campaign (Barber 2019).

Research shows that construction workers in jurisdictions with prevailing wage laws earn substantially more than their counterparts in places without such laws. Eisenbrey and Kroeger (2017) find that construction workers in states with prevailing wage laws are typically paid 13% to 22% more per hour than construction workers in states without prevailing wage laws.6 This wage premium benefits not only construction workers on public projects in a state, but also construction workers across the state. It is thus not surprising that the median wage of construction workers in Louisiana is lower than the median for construction workers nationwide. The national median was $22.80 per hour in May 2019, 7.2% higher than Louisiana’s median of $21.27.7

If cities in Louisiana were permitted to adopt prevailing wage standards, these laws would raise the pay of thousands of local construction workers, including workers of color. Consider, as an example, wages for construction workers in New Orleans. As shown in Table 8, the median hourly wage of construction workers in the New Orleans Metropolitan Statistical Area (MSA) in 2019 was $20.46 per hour—3.8% less than the statewide median and 10.3% less than the national median. A New Orleans prevailing wage law would have the potential to lift pay for over 35,000 construction workers in the area. If wages rose by the 13% difference identified by Eisenbrey and Kroeger (2017) (the lower end of their range), that would translate into a wage increase of $2.66 per hour, or—applied to the median annual wages reported by construction workers in the New Orleans MSA—a roughly $5,000 increase in annual earnings.

Table 8

Table 8 also shows the differences between the racial and ethnic composition of the construction workforce in New Orleans and that of the statewide construction workforce, as well as the differences in wage levels by race and ethnicity. The construction workforce in the New Orleans area is majority people of color—only 41.1% of area construction workers are white. Statewide, 64.7% of construction workers are white. Both statewide and in New Orleans, white construction workers are typically paid more than Black and Latinx construction workers, although median wages for Black construction workers are slightly higher in the New Orleans MSA than they are for the state.

Louisiana’s legislature is 76.4% white (see Appendix Table 7). The state population overall is 58.4% white. By restricting the ability of localities to set prevailing wage standards, the majority-white state legislature is denying the local government of New Orleans—a city that is 69.6% people of color—from establishing a policy that would raise wages for all local construction workers, the majority of whom (58.9%) are workers of color. For a Black construction worker in New Orleans, a pay raise equivalent to the 13% prevailing wage premium identified by Eisenbrey and Kroeger (2017) would mean a $5,000 increase in annual wages. For Latinx construction workers, it would be a $3,300 raise.

By banning cities and counties from enacting any prevailing wage ordinances, the Louisiana state legislature is suppressing pay for construction workers throughout the state. State lawmakers are tying the hands of local leaders, preventing them from enacting policies that would strengthen pay for workers of all races and ethnicities. And with white construction workers being paid considerably more than Black and Latinx construction workers—even in cities where white construction workers are in the minority—the inability to set local standards only further exacerbates racial inequities.

Case studies: Preemption fights on the horizon

Since 2010, state interference in local governance has continued to expand rapidly across the country, particularly in the South (von Wilpert 2017). In what was clearly a coordinated strategy to push corporate-friendly legislation in as many state houses as possible, historically high numbers of preemption bills were filed in many states in 2019 (Haddow, Gad, and Fleury 2019). And while not all of the bills that were introduced became law, there is every reason to believe that the bills will be introduced again in future sessions.

The following case studies describe instances in which anti-regulatory groups and right-wing lawmakers have tried to block local actions that protect workers but have not yet succeeded in doing so.

Wage theft protections: Miami-Dade County, Florida

In 2010, Miami-Dade County became the first county in the country to enact a wage theft ordinance. Within two years, the county had recovered more than $500,000 in stolen wages for nearly 400 workers. However, in 2019, Florida state lawmakers attempted to pass a bill negating Miami-Dade’s wage theft ordinance and preventing other counties in Florida from following Miami-Dade’s lead.

Wage theft occurs when an employer fails to pay a worker the full compensation to which the worker is legally entitled. As Cooper and Kroeger (2017) explain, wage theft can take many forms, from the explicit—such as refusing to pay promised wages, paying less than legally mandated minimums, or failing to pay overtime premiums—to less visible exploitation, such as requiring staff to work off the clock, making illegal deductions from paychecks, or intentionally misclassifying employees as independent contractors to avoid paying minimum wages, payroll taxes, or other required benefits.

In 2010, Miami-Dade made history by becoming the first county in the country to enact a county wage theft ordinance. Florida is a “permissive home rule” state, rather than a Dillon’s Rule state, meaning that there is a settled understanding that local governments have broad authority to enact policies on any issue where there is no state or federal prohibition. Miami-Dade’s ordinance created a mechanism within the county’s Small Business Development Agency for workers to file wage theft claims that the agency would then investigate, attempt to reconcile, and refer to a hearing examiner when needed. Within the first two years after the ordinance passed, the Miami-Dade Small Business Development Agency’s wage theft enforcement actions had already recovered more than $500,000 for nearly 400 workers in the county (Hernandez 2012).

In creating a local system for wage theft victims to seek restitution, county commissioners were responding to a widespread and deeply harmful problem that the state had failed to remedy. McNicholas, Mokhiber, and Chaikof (2017) estimate that low-wage workers across the country lose more than $50 billion to wage theft annually. Cooper and Kroeger (2017) describe how minimum wage violations alone cost workers an estimated $15 billion each year, including over $1.1 billion in Florida. In fact, Cooper and Kroeger find that Florida has the highest rate of minimum wage violations among the 10 most populous states in the country, with nearly a quarter (24.9%) of low-wage workers reporting being paid less than the state minimum wage.

This exceptionally high rate of minimum wage violations is likely caused, in part, by the fact that employers in Florida have little reason to think they will be caught if they engage in wage theft. Galvin (2016) explains that Florida has very weak state labor laws and no state enforcement agency to investigate alleged abuse. A conservative majority of the state legislature, along with then-Governor Jeb Bush, eliminated Florida’s Department of Labor and Employment Security in 2002. By establishing its own investigatory body, Miami-Dade stepped in to address an issue on which the state had explicitly decided to no longer act.

Despite a clear problem with wage theft in Florida—as illustrated by the success of the Miami-Dade ordinance—state lawmakers in 2019 attempted to negate Miami-Dade’s wage theft ordinance and prohibit all counties in Florida from enacting measures to combat wage theft. The bill would have overturned wage theft ordinances across the state and prevented local governments from establishing any ordinance governing the conditions of employment within that jurisdiction.8 The legislation would have prohibited local laws on everything from minimum wage, paid sick days, and fair scheduling laws to ban-the-box policies and wage theft victims’ rights (Haddow, Gad, and Fleury 2019). The bill died in committee, although similar legislation has passed in other Southern states (Riverstone-Newell 2017).

Table 9 displays the number of workers in Florida and in Miami-Dade County who are likely experiencing minimum wage violations. Of the 456,177 workers in Florida who are likely subject to minimum wage violations, 223,983 are women. Substantial numbers are also Black (72,076) and Latinx (128,642). The failed bill to prohibit wage theft measures would have denied communities the opportunity to protect these workers from this egregious exploitation.

Table 9

For the city of Miami, this bill represented an even more direct attack on Black and Latinx workers. Of the estimated 44,914 Miamians who experience minimum wage violations, 32,338—or nearly three-quarters—are Latinx. There are also more Black workers than white workers experiencing minimum wage violations in Miami.

The estimates in Table 9 apply the statewide overall share of minimum-wage-eligible workers who have experienced minimum wage violations—7.3%—from Cooper and Kroeger 2017 to the number of minimum-wage-eligible workers in each demographic group. This likely results in an undercount of the number of women and workers of color who experience minimum wage violations, since they actually experience these unfair practices at higher rates than the overall workforce. Women in Florida experience these violations more often than men (8.4% of minimum-wage-eligible workers vs. 6.4%), as do Black and Latinx workers (Cooper and Kroeger 2017).

It is also possible that the prevalence of wage theft is lower in Miami than in the rest of the state, thanks to the wage theft ordinance. However, there is evidence that many cases of wage theft in Miami go unreported and that the agency tasked with enforcement does not have adequate resources or a broad enough jurisdiction to handle cases efficiently (Hernandez 2012). In any case, eliminating Miami-Dade’s authority to regulate wage theft would disproportionately leave women and Black and Latinx workers worse off; policymakers must defend against this. At the same time, policymakers should prioritize strengthening the enforcement mechanisms for the ordinance.

Salary history bans: West Virginia

In 2019, the West Virginia state legislature sought to block cities from enacting salary history bans. Disclosing prior salaries during the hiring process can perpetuate and compound salary inequities throughout a worker’s career by undermining their ability to bargain during salary negotiations. Research has shown that salary history bans raise wages for all workers, in particular women and Black workers.

To close racial and gender pay gaps, policymakers across the country have begun to ban employer questions about pay history (Douglas 2019). However, as with wage theft, some lawmakers have tried to proactively preempt local action on this issue. In West Virginia, this led to a bill that would have—in addition to interfering with a whole host of other local labor standards and nondiscrimination regulations—blocked cities in West Virginia from enacting salary history bans (Haddow, Gad, and Fleury 2019). Although this sweeping bill died in committee, it signals a clear desire from lawmakers to interfere with local action on worker’s rights issues.9

Gender and racial wage gaps are real, large, and persistent. In 2019, the typical woman worker was paid just 85.0% of what her male peers were. These inequalities persist, and are in fact larger, between women and men with more education. Racial wage gaps are even more egregious, with the typical Black and Latinx worker being paid about three-quarters the hourly wages of white workers, 75.6% and 74.6%, respectively (Gould 2020).

When workers face lower pay from the beginning of their career, disclosing their prior salaries during a hiring process can perpetuate and compound these inequalities throughout their career by undermining their ability to bargain over pay during negotiations over a job.

A recent report confirmed the effectiveness of salary history bans and found that these bans also make employers more likely to include salary ranges in their job postings. Among all “job-changers,” workers experienced a 5% increase in pay after salary history bans were enacted. Women and Black workers saw particularly strong effects, with women who change jobs seeing an 8% increase in pay and Black workers seeing a 13% increase (Bessen, Meng, and Denk 2020). Since Black workers and women experience outsized effects, these policies help shrink existing pay gaps. The report estimates that salary history bans reduce the gender wage gap by 48% for job-changers and found an even stronger effect for the Black–white wage gap.

As shown in Figure G, the gender wage gap in West Virginia is apparent among workers at all wage levels. The typical woman in West Virginia is paid just 78.8% of what the typical man in West Virginia is paid. And even for those who earn the most, the gender wage gap is inescapable. At the 90th percentile, male wage earners in West Virginia are paid $40.07 an hour, which translates into $83,300 for a full-time, full-year worker. This is 20.7% more than their female peers, who are paid $33.19 an hour, or $69,000 annually.

Figure G

A salary history ban would boost the wages of West Virginian workers by helping to even the playing field as workers go into wage negotiations. This, along with the related mitigating effects on pay inequalities, are strong reasons why legislators should champion salary history bans at the state and local levels. Preempting local action on salary history bans would harm workers in West Virginia—and particularly women and workers of color.

Preemption and the pandemic

Many Southern states that relied on limiting the authority of local governments before the onset of the pandemic in 2020 have made broad use of preemption during the pandemic. Many executive orders issued since by Southern governors have outlawed local public health measures that were stricter than the standards set by the state:

• A Mississippi executive order issued on March 24, 2020, forbade political subdivisions (including cities and counties) from imposing social distancing regulations or business shutdowns stricter than the state’s (LSSC 2020a).
• On April 7, 2020, the governor of South Carolina issued an executive order explicitly disallowing local stay-at-home orders stricter than the state’s.10
• In Florida, an executive order issued on April 1, 2020, “clarified” that state-level orders superseded local ones. The next day, the governor explained that cities could still enact stricter coronavirus-related protections. The ensuing confusion resulted in local officials being reluctant to enact stay-at-home orders or require businesses to close (Lemongello, Man, and Rohrer 2020).
• On March 26, 2020, the governor of Arkansas issued an executive order prohibiting local stay-at-home requirements, arguing that such regulations would interfere with essential operations and commerce (LSSC 2020b).
• On May 11, 2020, Texas Attorney General Ken Paxton threatened to sue city officials in Austin, Dallas, and San Antonio unless they rolled back “unlawful” local emergency orders that imposed stricter public health safety measures than the state allowed (Platoff 2020).

The pandemic, far from being a “great equalizer,” is deepening existing inequalities along racial lines. The virus has taken the lives of Black, Indigenous, Pacific Islander, and Latinx people at higher rates than white people (APM 2020). This inequality of health outcomes is coupled with an economic crisis that is disproportionately affecting communities of color. Black and Latinx workers face economic conditions that have left them particularly vulnerable to this crisis. They are paid less, are more likely to be living in poverty, and are less likely to have access to paid sick leave than white workers (Gould and Wilson 2020; Gould, Perez, and Wilson 2020).

Black workers are more likely to be front-line workers—employed in essential industries such as health care, child care and social services, and grocery, convenience, and drug stores—putting them and their families at even greater risk and compounding the existing health inequalities they face. About one in six front-line workers are Black, even though only one in nine workers are Black in the overall workforce. At the same time, Black workers are less likely to have health insurance and to have paid leave than white workers (Gould and Wilson 2020).

Latinx workers are less likely than other workers to be able to work from home, leaving them prone to job loss or exposure to coronavirus on the job. In particular, Latinx workers are disproportionately employed in the leisure and hospitality industry, which experienced the largest job losses of any industry at the beginning of the pandemic. Latina workers, who already had a higher unemployment rate than white workers, experienced the largest spike in unemployment between February and April of any group (Gould, Perez, and Wilson 2020).11

Preemption plays a role in reinforcing these inequalities when it is used to directly hamper local policies intended to mitigate the public health and economic fallout of the pandemic. It could instead be used to ensure that health and economic equity is being advanced evenly across a state. Misuse of preemption has also prevented localities in some states from enacting policies that would have made them better equipped to deal with the pandemic, including paid sick leave, eviction moratoria, and municipal broadband. As a result, these localities are unable to ensure that their residents have access to sick leave during a pandemic, secure housing during an economic crisis, and better internet access when it is needed to attend work and school (Haddow et al. 2020).

Conclusion

In the face of the COVID-19 pandemic and resulting economic crisis, cities and states should be working together to enact policies that will protect their residents’ health and promote equity during both the crisis and the recovery. Instead, some state policymakers continue to interfere with local policymakers’ authority to enact and enforce policies to protect their residents. During this pandemic, preemption has too often stifled local responses and generated confusion.

The public health and economic crises stemming from COVID-19 have disproportionately impacted the same communities that had already seen their power limited by state government interference in local democracy. Poor wages and working conditions, limited public investments, and higher rates of incarceration resulting in higher poverty rates have left Southern populations particularly vulnerable to the current economic crisis (Blair and Worker 2020a). Southern policymakers have also ensured that the region has particularly low access to unemployment insurance, paid sick leave, and health care (Blair and Worker 2020b).

In the cases outlined here, Southern lawmakers prevented local action that would have improved economic outcomes for low-income workers, especially low-income women and people of color. These are populations that had already been left particularly economically vulnerable by American institutions, and now these populations are suffering disproportionately from a dual public health and economic crisis (Wilson 2020). As discussed earlier, the present-day failures of American institutions are also rooted in historical policies and practices intended to limit the rights and freedoms of Black people and entrench white supremacy.

Rather than allowing for policies that would improve employment outcomes, wages, and working conditions, state lawmakers and corporate interests have collaborated to prevent progress. State interference fundamentally undermines the ability of cities to address problems with targeted solutions that address the needs and reflect the values of their communities. Because of the deliberate, long-time use of preemption to maintain the racial and economic order, workers in the South who were already vulnerable before the pandemic are now struggling with the effects of widening and deepening inequities.

Acknowledgments

The authors thank Jori Kandra, Melat Kassa, and Daniel Perez, EPI research assistants, for their attention to detail; Krista Faries as the lead editor for this project; and Naomi Walker and Lynn Rhinehart for their overarching guidance and support. We thank Local Solutions Support Center for their partnership and generous support for this project. We also thank the research and grassroots organizations across the South who served as thought partners on this report for their work advancing racial and economic justice in the region. Finally, we thank the workers and communities whose lives are impacted by these policies every day and who are leading organizing and advocacy efforts so that people and families can thrive and make ends meet.

Notes

1. In this section, Nashville refers to the consolidated city-county metro of Nashville-Davidson County. Nashville accounts for the vast majority of Davidson County’s population and the city and county governments have been consolidated since 1963 (Bucy n.d.). Unless otherwise noted, statistics for “Nashville” represent Nashville-Davidson County.

2. Since data for Louisville are not included in Collins et al., we use nearby cities (Cincinnati, Cleveland, Columbus, and Memphis) to get a range of estimates. Of that group, Memphis had the lowest share of gig workers (1.0%) and Columbus had the highest (2.0%). Number of tax filers retrieved from https://www.irs.gov/statistics/soi-tax-stats-county-data-2016, August 3, 2020.

3. Comm. Substitute for S.B. 2112, 2020 Sen., Reg. Sess. (Miss. 2020).

4. S.B. 2689, 2014 Sen., Reg. Sess. (Miss. 2014).

5. Diller explains that the Louisiana constitution states that “[n]o local governmental subdivision shall…except as provided by law, enact an ordinance governing private or civil relationships.” Yet despite this strong language, courts in Louisiana have generally weakened or struck down local measures based on other grounds, rarely invoking the state constitution.

6. In straight, nominal terms, the median wage for construction workers was 21.9% higher in prevailing wage states versus states without prevailing wage laws. When the wage values are adjusted using the Bureau of Economic Analysis’s Regional Price Parities to account for regional price differences, the gap narrows to 13.0%.

7. Nationally, the May 2019 median wage for construction workers was $22.80 hourly and $47,430 annually. Median hourly wages by race/ethnicity are calculated by applying the ratio of each race/ethnicity’s median annual wages to the overall annual median and hourly median from the Occupational Employment Statistics.

8. S.B. 432, Sen. (Fla. 2019).

9. H.B. 2708, House (W.V. 2019), bill status.

10. S.C. Exec. Order 2020-22.

11. For a detailed exploration of the dual health and economic crises that are deepening the inequalities faced by Black and Latinx workers, see Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus—Racism and Economic Inequality and Latinx Workers—Particularly Women—Face Devastating Job Losses in the COVID-19 Recession.

Appendix tables

Appendix Table 1

Appendix Table 2

Appendix Table 3

Appendix Table 4

Appendix Table 5

Appendix Table 6

Appendix Table 7

Appendix Table 8

Appendix Table 9

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We are releasing this chartbook in the midst of the coronavirus pandemic—a crisis that has highlighted the importance of keeping our homes clean, the skills and patience required to provide child care, and the urgency of caring for elderly, sick, and disabled Americans.

Here are just a few key findings:

• The vast majority (91.5%) of domestic workers are women and just over half (52.4%) are black, Hispanic, or Asian American/Pacific Islander women.
• Though most (64.9% of) domestic workers are U.S.-born, they are more likely than other workers to have been born outside the U.S. and they tend to be older than other workers.
• The typical (median) domestic worker is paid $12.01 per hour, much less than other workers (who are paid $19.97 per hour). Even when compared with demographically similar workers, domestic workers on average are paid just 74 cents for every dollar that their peers make.
• Domestic workers are three times as likely to be living in poverty as other workers, and almost three times as likely to either be in poverty or be above the poverty line but still without sufficient income to make ends meet.
• Fewer than one in 10 domestic workers are covered by an employer-provided retirement plan and just one in five receives health insurance coverage through their job.

Jump to the charts

Jump to the data tables

The coronavirus crisis has laid bare the ways in which this work is undervalued and this workforce is underprotected. As their employers take steps to practice social distancing, many domestic workers have been left without work—and without any indication that they would get their jobs back. 1 At the same time, many domestic workers who are still on the front lines of the pandemic, caring for the sick and keeping homes clean, may lack the protective equipment they need. Although the pandemic serves as the backdrop for this chartbook, only data from before the pandemic was available at the time of our analysis. That means that the charts and data tables here provide a snapshot of domestic workers in the pre-coronavirus period.

In addition to caring for children and helping households stay clean, domestic workers support older people and people with disabilities or illnesses by providing hands-on health care, running errands, making meals, and cleaning homes, allowing their clients to live as independently as possible in their own homes. These services are incredibly valuable to those who receive them and to the other workers who would otherwise be spending their time on this important work. Given continued gender disparities in home responsibilities for unpaid care work, working women in particular are affected by the existence of the domestic workforce.

Although domestic work is vital to everyday life, this chartbook shows that domestic workers face low pay, rarely receive benefits, and have less access to full-time work than other workers. Because they work in private homes, they are outside of public view and isolated from other workers, leaving them particularly vulnerable to exploitation.2 And many groups of domestic workers are explicitly left out of many federal labor and employment protections—a policy decision dating back to the New Deal, when majority-black domestic and farmworkers were excluded from landmark federal labor laws as a concession to racist Southern lawmakers.3

Specifically, domestic workers are excluded from the National Labor Relations Act, enacted in 1935 to guarantee employees the right to form labor unions—or engage in other forms of collective action—to organize for better working conditions. And “live-in” workers are excluded from the overtime protections in the Fair Labor Standards Act, enacted in 1938.

The exclusions for domestic workers carried through to subsequent worker protection statutes. The Occupational Safety and Health Act does not apply to “individuals who, in their own residences, privately employ persons for the purpose of performing…what are commonly regarded as ordinary domestic household tasks, such as house cleaning, cooking, and caring for children.”4 Federal anti-discrimination laws, such as the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, all generally cover only employers with multiple employees, meaning many domestic workers are excluded from these protections. This exclusion is also part of the Family and Medical Leave Act.

A critical first step to providing domestic workers with the same protections as other workers is passing a National Domestic Workers Bill of Rights. In addition to extending basic wage and hour protections to domestic workers, such a measure would include key provisions establishing fair scheduling (i.e, no unexpected shift cancelations or changes without warning or compensation), transparent employment contracts, and access to health care and retirement benefits for domestic workers. Nine states (California, Connecticut, Hawaii, Illinois, Massachusetts, Nevada, New Mexico, New York, and Oregon) and the city of Seattle have already passed Domestic Workers Bills of Rights, and other states and localities should follow suit.

Home care aides make up the majority of the nation's 2.2 million domestic workers: Employment in domestic worker occupations, 2019

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here are 2.2 million domestic workers in the United States and more than half are agency-based home care aides. Domestic workers do the vital work of cleaning homes, tending to children, and providing daily living and health assistance to people who are elderly, are convalescing from illness, or have disabilities. The data from this chart are also available in Table 1, at the end of the chartbook.

It is highly likely that this 2.2 million estimate is an undercount of domestic workers. First, a significant proportion of domestic workers are paid “under the table,” which makes individuals who participate in surveys less likely to report these jobs. Second, the share of domestic workers who were born outside of the United States is higher than the share of workers overall who are not U.S.-born, and it is believed that immigrants are underrepresented in national surveys.5

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Women make up the vast majority of domestic workers: Share of workers who are women or men, for domestic workers, for all other workers, and by domestic worker occupation, 2019

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More than nine in 10 domestic workers (91.5%) are women—a gender imbalance that is even more pronounced for house cleaners (95.5% women) and child care providers (roughly 97% women). By comparison, women make up just under half (46.3%) of the rest of the workforce. While men are somewhat more likely to be home care aides than house cleaners or child care providers, they still account for less than 15% of home care aides.

See Table 2 at the end of the chartbook for a demographic breakdown of domestic workers by gender, race/ethnicity, nativity, education, and age. We have also provided supplemental tables with demographic breakdowns of domestic workers in each state and in selected metropolitan areas.

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Black and Hispanic workers make up a disproportionate share of domestic workers: Share of workers who are of a given race or ethnicity, for domestic workers, for all other workers, and by domestic worker occupation, 2019

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Well over half (57.1%) of domestic workers are black, Hispanic, or Asian American/Pacific Islander (AAPI). In contrast, black, Hispanic, and AAPI workers make up 36.0% of the rest of the workforce. House cleaners constitute the domestic worker occupation with the highest share of Hispanic workers (61.5%), while agency-based home care aides constitute the domestic worker occupation with the highest share of black, non-Hispanic workers (30.3%).

See Table 2 for a demographic breakdown of domestic workers by gender, race/ethnicity, nativity, education, and age. We have also provided supplemental tables with demographic breakdowns of domestic workers in each state and in selected metropolitan areas.

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Black and Hispanic women make up a disproportionate share of domestic workers: The share of domestic workers who are black, Hispanic, or AAPI women, 2019

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While women of all races and ethnicities are overrepresented in the domestic employee workforce, this overrepresentation is particularly pronounced for Hispanic and black women. A majority (52.4%) of domestic workers are black, Hispanic, or AAPI women—over a quarter (27.2%) are Hispanic women and nearly one in five (19.7%) are black women. Most house cleaners are Hispanic women (58.9%) and more than a quarter (27.2%) of agency-based home care aides are black women.

See Table 3 for a detailed demographic breakdown showing the race/ethnicity and nativity of domestic workers by gender.

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Domestic workers are more likely than other workers to have been born outside the U.S.: Share of workers with given nativity status, for domestic workers, for all other workers, and by domestic worker occupation, 2019

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More than a third (35.1%) of domestic workers were born outside of the U.S., compared with just 17.1% of the rest of the workforce. One in five is a foreign-born noncitizen (20.3%), while about one in seven is a U.S. citizen who was born in a different country (14.8%). While noncitizens are overrepresented in all domestic worker occupations, they are particularly overrepresented in the house cleaner workforce, making up half (50.8%) of house cleaners.

See Table 2 for a demographic breakdown of domestic workers by gender, race/ethnicity, nativity, education, and age. Table 3 provides even more detail, showing the race/ethnicity and nativity of domestic workers by gender. We have also provided supplemental tables with demographic breakdowns of domestic workers in each state and in selected metropolitan areas.

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Domestic workers tend to be older than other workers: Share of workers by age group, for domestic workers, for all other workers, and by domestic worker occupation, 2019

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Two in five domestic workers are age 50 or older, while just one-third of all other workers are at least 50 years old. Home care aides who aren’t agency-based are the domestic worker occupation with the highest median age (51). The exception to the tendency of domestic workers to skew older is the occupation of nannies, whose median age is 26. Over one-third of nannies are younger than 23 years old, compared with 8.3% of nondomestic workers who are under 23.

These data suggest that domestic work is often an important source of income for older workers. The reliance of some older workers on income from domestic occupations is particularly relevant during the coronavirus pandemic—older workers have a greater risk of severe illness from the virus—and underscores the need to provide domestic workers with access to paid sick leave and adequate protective equipment.

See Table 2 for more detailed age categories and the median ages of domestic workers. We have also provided supplemental tables with demographic breakdowns of domestic workers in each state and in selected metropolitan areas.

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How many domestic workers are employed in your state?: Number of domestic workers working in each state, by occupation and compared with all workers, 2019

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This map is color-coded to show which states have the most domestic workers. You can click on a state to display how many domestic workers total are employed there, and how many are employed in each domestic worker occupation, and compare these with the number of workers in all other occupations. You can access the map data from Table 4, which also shows employment counts by region. Employment counts for selected metropolitan areas are available in Table 5.

We have also provided supplemental tables with demographic breakdowns and median hourly wages of domestic workers in each region and state and in selected metropolitan areas.

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There is a wide and persistent gap between domestic workers’ wages and wages of all other workers: Median real hourly wages of domestic workers, by occupation, versus other workers, 2005–2019

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There is a large “domestic worker wage gap”—a wide gulf between the median hourly wage of domestic workers and the median hourly wage of all other workers. The wage gap for domestic workers is not only large, but it is also persistent. Like other typical workers, domestic workers have seen stagnant wages for decades (since well before 2005, which is the starting point in this chart because it is the first year for which data are available for the domestic worker occupations defined in our analyses). For an in-depth look at the sluggish wage growth of the last 40 years, see EPI’s report State of Working America Wages 2019.6

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The pay gap for domestic workers is widest for nannies: Median real hourly wages, domestic workers (all and by occupation) versus other workers, 2019

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The typical domestic worker is paid $12.01 per hour, including overtime, tips, and commissions—39.8% less than the typical nondomestic worker, who is paid $19.97. This wide gap between domestic workers’ wages and the wages of all other workers is consistent across domestic worker occupations.

Table 6 shows the median hourly wages of domestic workers, all other workers, and domestic workers by occupation broken out by gender, race/ethnicity, nativity, education, and age. We have also provided supplemental tables with median hourly wages of domestic workers by demographic group for each region and state and for selected metropolitan areas.

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Domestic workers who are male, U.S.-born, AAPI, college-educated, or ages 50 and older have the biggest wage gaps relative to their peers in other professions: Median real hourly wages, domestic workers versus other workers, 2019

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W
ithin every demographic category that we analyze, domestic workers are typically paid less than their peers. Male domestic workers face a larger wage gap relative to other men ($8.77, or 40.6%) than do female domestic workers ($6.27, or 34.4%; not shown). Asian American/Pacific Islander domestic workers, older domestic workers, and domestic workers with at least a bachelor’s degree also face particularly large within-group wage gaps.

Table 6 shows the median hourly wages of all domestic workers versus all other workers, and by domestic worker occupation, broken out by gender, race/ethnicity, nativity, education, and age.

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Even when controlling for demographics and education, domestic workers are paid less than similar workers: Average domestic worker hourly wages as a share of wages paid to demographically similar workers in other professions, 2019

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E
ven when we control for demographics and educational background using regressions, domestic workers face a big pay gap: The average domestic worker is paid 74 cents for every dollar that a similar worker would make in another occupation—or 26% less. Home care aides who are not agency-based face the largest wage gap: Their wages are two-thirds the wages of demographically similar workers—a third less. Although the regression-adjusted wage gap is smaller for nannies and house cleaners, they are still paid only about 80 cents for every dollar that a similar worker would make in another occupation.

Table 7 shows regression-adjusted hourly wage gaps for all domestic workers and for each domestic worker occupation, broken out by gender, race/ethnicity, nativity, education, and age.

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Domestic workers are more likely to work part time and more than twice as likely to work part time because they can't get full-time hours: Share of workers who work full and part time, for domestic workers, for all other workers, and by domestic worker occupation, 2019

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I
n addition to having lower hourly wages, domestic workers tend to work fewer hours than other workers. Nearly half of domestic workers work part time, compared with less than a quarter of all other workers. Much of this difference is at least somewhat “voluntary,” with domestic workers being more likely than other workers to have a part-time job because they want a part-time schedule (or need a part-time schedule to handle child care or other responsibilities). But domestic workers are also more than twice as likely as other workers to want a full-time job but to have to settle for a part-time job because they can’t get full-time hours. The greater likelihood of wanting but being unable to get full-time work is particularly acute for house cleaners, 15% of whom work part time but would like a full-time job. The greater incidence of part-time work among domestic workers is reflected in their average weekly hours on the job (not shown). While workers in other occupations put in just under 40 hours a week on average, domestic workers spend an average of 33.4 hours on the job each week.

Table 8 displays the data from this chart, as well as the average weekly hours of domestic workers.

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Domestic workers are paid less in a year than other workers: Median annual earnings, domestic workers versus other workers, 2018

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T
he combination of lower average hours and much lower median wages (shown in Table 8 and Figure 9) results in substantially lower annual earnings for domestic workers relative to other workers. The typical domestic worker’s annual earnings are just two-fifths of a typical worker’s in another occupation. While typical agency-based home care aides have higher annual earnings than domestic workers in other occupations, they still are paid just half of what workers outside the domestic workforce are paid in a year.

Table 9 shows the median annual earnings of all domestic workers, domestic worker occupations, and all other workers, broken out by gender, race/ethnicity, nativity, education, and age.

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Even when controlling for demographics and education, domestic workers are paid less in a year than similar workers: Average domestic worker annual earnings as a share of earnings paid to demographically similar workers in other professions, 2018

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E
ven when we control for demographics and educational background using a regression, domestic workers face a big pay gap as a result of lower hourly wages and fewer hours: The average domestic worker is paid less than half of what a similar worker would make in another profession on an annual basis. Nannies face the largest gap: Their annual earnings are less than one-third the earnings of a demographically similar worker. Although the regression-adjusted earnings gap is smaller for agency-based home care aides, they are still paid 42.8% less annually than a similar worker would be paid in another occupation.

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Domestic workers are three times as likely to be in poverty and almost three times as likely to lack enough income to make ends meet: Poverty rates and twice-poverty rates of domestic workers versus other workers, 2018

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D
omestic workers are much more likely than other workers to be living in poverty, regardless of occupation. They are also much more likely to have incomes that fall below the twice-poverty threshold, which is considered by many researchers a better cutoff for whether a family has enough income to make ends meet. The majority of house cleaners are struggling to make ends meet (their “twice-poverty” rate is 54.8%) and more than a quarter (25.4%) have incomes that put them below the official poverty threshold. Workers who provide child care in their own homes have somewhat lower poverty rates than other domestic workers, although a third of them (32.4%) still do not have enough income to make ends meet—about twice the share of the nondomestic workforce living below the twice-poverty line. Domestic workers who are not U.S. citizens and those without a high school diploma face particularly high poverty rates, as do black and Hispanic domestic workers. (These data are shown at the end of the chartbook in Table 10 and Table 11, which provide poverty and twice-poverty rates for domestic workers and all other workers broken out by gender, race/ethnicity, nativity, education, and age.)

Poverty researchers generally do not consider the poverty rate to be a good measure of the share of families who cannot make ends meet in part because the poverty thresholds were set in the 1960s and have not evolved to reflect changing shares of spending on various necessities by low-income families. That is why “twice poverty” is often used as a cutoff for whether a family is able to make ends meet.

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Even when controlling for demographics and education, domestic workers are more likely to live below the poverty line than similar workers: Percentage-point difference between the poverty rate of domestic workers and that of demographically similar workers in other occupations, 2018

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E
ven when we compare domestic workers exclusively with workers in other professions who are demographically similar, domestic workers are still much more likely to be living in poverty. House cleaners on average have a poverty rate that is 14.0 percentage points higher than the poverty rate of similar workers. Along with agency-based home care aides, house cleaners also have twice-poverty rates that are nearly 20 percentage points higher than you would expect these rates to be if these workers were employed in nondomestic occupations. (The twice-poverty rate is the share of workers whose family income falls below the twice-poverty threshold, considered by many researchers a better cutoff for whether a family has enough income to make ends meet.)

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Domestic workers are less likely to have health or retirement benefits: Employer-provided health insurance and retirement coverage rates, domestic workers versus other workers, 2018

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J
ust under one in five domestic workers has employer-provided health insurance, a shockingly low coverage rate compared with the near-majority of other workers who receive health insurance through their job. Coverage rates are less than 10% for house cleaners and workers who provide child care in their own home. Even agency-based home care aides, the domestic worker occupation with the highest employer-provided health insurance coverage rate, are barely half as likely to be covered as nondomestic workers.

The coverage rates for employer-provided retirement plans are even more dismal—fewer than one in 10 domestic workers are covered. By comparison, about a third of other workers benefit from their employer contributing to their retirement savings.

See Table 12 and Table 13 for variations in employer-provided health insurance and retirement coverage rates for domestic and all other workers by gender, race/ethnicity, nativity, education, and age.

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Even when controlling for demographics and education, domestic workers are less likely to have benefits than similar workers: Percentage-point gap between the coverage rates of domestic workers and those of demographically similar workers in other occupations, 2018

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The glaring gaps in health insurance and retirement coverage rates are evident even when we compare domestic workers with demographically similar workers. The share of domestic workers with employer-provided health insurance is 21.4 percentage points lower than the share of all other workers with such coverage. And the share of domestic workers with employer-provided retirement plans is 17.1 percentage points lower than the share of all other workers with such coverage. Agency-based home care aides are more likely than other domestic workers to have employer-provided benefits, but the gap between these workers and nondomestic workers remains enormous even after controlling for demographic characteristics.

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Employment in domestic worker occupations is growing faster than the rest of the workforce: Projected employment change, domestic workers versus other workers, 2018–2028

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Employment in domestic worker occupations is projected to grow more than three times as fast as employment in other occupations over a decade—22.9% compared with 6.9%. This trend is driven by the expected large increase (45.4%) in agency-based home care aides, who make up about half of the domestic employee workforce.

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Table 1

Table 2

Table 3

Table 4

Table 5

Table 6

Table 7

Table 8

Table 9

Table 10

Table 11

Table 12

Table 13

Technical notes about data and definitions

The figures and tables in this chartbook use data from the Current Population Survey (CPS), a monthly survey of households in the United States sponsored jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics (BLS). Our CPS basic and Outgoing Rotation Group microdata are pulled from the Economic Policy Institute Current Population Survey Extracts, Version 1.0.2 (2020), https://microdata.epi.org.

In our analyses of hourly wages, we use data from the CPS’s Outgoing Rotation Group (ORG), a CPS subgroup of employed adults asked to answer a detailed set of questions about their earnings from work. Our analyses of annual earnings, benefits, and poverty rates come from the CPS’s Annual Social and Economic Supplement (ASEC). To ensure adequate sample sizes for these detailed analyses, we pool several years of CPS, CPS-ORG, or CPS-ASEC microdata. Most data sets are drawn from pooled 2016–2018 or 2017–2019 microdata, whichever microdata set is the most recent available. Data sets that are broken down by geography are drawn from pooled 2010–2019 microdata. Even after pooling years together, we still do not have adequate sample sizes to report statistics for some demographic groups, as indicated in the tables by “NA.”

The CPS asks respondents about both race and ethnicity, so respondents may be categorized as having Hispanic ethnicity and being of any race. To avoid including observations in multiple categories, we create five mutually exclusive categories for race/ethnicity: white (non-Hispanic), black (non-Hispanic), Hispanic (any race), Asian American/Pacific Islander (non-Hispanic; sometimes referred to as “AAPI” in this report), and “other.” Likewise, gender is restricted to the two predominant binary categories: women and men. Note that for clarity, when discussing our findings, we adhere to the category name of “Hispanic,” which is used in official government sources, rather than Latino, Latina, or Latinx.

In our charts, “Foreign-born” refers to anyone who is not a U.S. citizen at birth. “Foreign-born noncitizen” includes foreign-born persons who are either lawful permanent residents, in a nonimmigrant status (migrants with temporary visas), or lacking an immigration status, including both unauthorized immigrants and those with lawful presence (such as Deferred Action for Childhood Arrivals recipients and asylum applicants whose cases are in process).

The data include all public- and private-sector workers ages 16 and older. Due to rounding, in a few cases sums that can be calculated by using the data in tables or figures vary slightly from sums cited in the text.

Acknowledgments

The authors would like to thank EPI Editor Krista Faries for improving the chartbook through her careful editing and preparing of our figures and tables for publication. And we are indebted to EPI’s Online and Creative Director, Eric Shansby, who created the awesome system that makes it possible to design and publish these interactive chartbooks.

Endnotes

1. Julia Wolfe, “Domestic Workers Are at Risk During the Coronavirus Crisis,” Working Economics Blog (Economic Policy Institute), April 8, 2020.

2. Laura Dresser, Valuing Care by Valuing Care Workers: The Big Cost of a Worthy Standard and Some Steps Toward It, Roosevelt Institute, October 2015.

3. Linda Burnham and Nik Theodore, Home Economics: The Invisible and Unregulated World of Domestic Work, National Domestic Workers Alliance, 2012.

4. Occupational Safety and Health Administration, “Policy as to Domestic Household Employment Activities in Private Residences,” Standard Number 1975.6.

5. United States General Accounting Office, Immigration Statistics: Information Gaps, Quality Issues Limit Utility of Federal Data to Policymakers, July 1998.

6.  Elise Gould, State of Working America Wages 2019: A Story of Slow, Uneven, and Unequal Wage Growth over the Last 40 Years, Economic Policy Institute, February 2020.

There is a penalty for working part time in America that goes beyond the lower annual earnings and fewer employee benefits that part-time workers get. Part-time workers are also face an hourly wage penalty: they are paid 29.3% less in wages per hour than workers with similar demographic characteristics and education levels who work full time. And when controls for industry and occupation are added, part-time workers are paid 19.8% less than their full-time counterparts. This part-time wage penalty is on par with the gender and racial wage penalties in the United States.

This report provides new analysis of data on the part-time wage penalty overall, by race/ethnicity and gender, and by the reasons workers give for working part time. White men and black men suffer the largest wage penalty for working part time. However, because women constitute a disproportionate 60% share of the part-time work force, they bear the brunt of the wage penalty for working part-time jobs. Moreover, the part-time wage penalty is worse for people who work part time but want full-time hours, relative to part-time workers who cannot or do not want to work full time. In addition, there is a broader compensation penalty in employee benefits, faced by part-time workers, in particular part-time workers employed in service occupations. (Note: penalties are calculated using 2003–2018 microdata from the Current Population Survey.)

Following are the key findings from the report:

• Part-time workers earn 29.3% less per hour worked than other workers with similar demographic characteristics and education levels.
• The part-time wage penalty is smaller but still substantial, 19.8%, when the worker’s industry and occupation (as well as demographics and education) are controlled (these controls yield the “fully adjusted wage penalty.”) This reduction with the industry and occupation controls added suggests that a share of the wage penalty is attributable to being relegated to certain lower-paying sectors or job types dominated by part-time work.
• By race and ethnicity, the fully adjusted wage penalty is across the board—it is 20.7% for white workers, 20.2% for African American workers and 14.2% for Hispanic workers, suggesting majority workers are just as prone to the part-time wage penalty.
• By gender, the adjusted wage penalty is 15.9% for women and 25.8% for men, suggesting that men pay a noticeably higher price for working part time. However, women constitute nearly two-thirds (63.3% in 2019) of those employed part time, and are much more likely to work part time: 22.8% of all female workers work part time, compared with 11.8% of all male workers in 2019). Thus, a greater proportion of women than men bear the brunt of the wage penalty, albeit smaller in size relative to the part-time men.
• By gender and race, white men face the highest wage penalty, at 28.1%, followed by black men at 24.6%, while the penalty for black women is 17.2%, for white women it is 16.4%, and for Hispanic men it is 16.9% while it is 12.3% for Hispanic women. The racial gap in part-time wage penalties likely reflects a combination of whites’ advantage in wage rates at their full-time jobs along with a shared disadvantage when they are in part-time jobs.
• The part-time wage penalty is greater for those working part time but wanting a full-time job (i.e., those whose reasons for working part time are categorized by the BLS as “for economic reasons,” which includes “slack work or business conditions” and “could only find part-time work”). Part-time workers who say they work reduced hours because of “slack work or business conditions” experienced a 22.3% wage penalty, while those who say they work part time because they “could only find part-time work” experienced a 29.5% wage penalty. Those working part time for “noneconomic reasons” (such as child care problems and family or personal obligations) still experienced a wage penalty, 18.3%, though a smaller-sized penalty than those who were part time for “economic reasons.” (Though respondents who work part time for “noneconomic reasons” may prefer to work full time if, say, they could afford child care, they are not included in the standard count of part-timers who want full-time work.)
• The penalty for part-time workers who want full-time work can be characterized as a double penalty: they are constrained to working fewer hours than they want and thus have lower total earnings, while they also make less for each hour they do work.
• There has been a notable increase in the part-time pay penalty over time. A 2005 study by Barry T. Hirsch, using data from 1995–2002, found a part-time pay penalty of about 10% for women and 22% for men. Our present analysis using a comparable method but with 2003–2018 data show a pay penalty of about 16% for women and 26% for men. Since the hourly pay penalty estimates control for year, this 6 percentage-point increase for women and 4 percentage-point rise for men likely reflects some kind of change in the labor market affecting both genders in the more recent period, beyond that attributable to just the Great Recession.
• Part-time workers face even more of a disadvantage in benefits than in wage rates. Benefits make up about 20.1% of full-time workers’ compensation, but only about 16.4% of part-time workers’ compensation. The inequity in benefits means that the compensation penalty (including wages and benefits) is a full 5.5 percentage points larger than the wage penalty. Thus, a part-time worker on average faces a full compensation penalty of 25.3%–a 5.5% benefit penalty on top of the 19.8% wage penalty.
• Policy priorities should include an array of reforms directed toward all part-time jobs, not just its incumbents, to address the large and apparently growing inequity in both wages and in benefits. Reforms could specifically promote more pay parity and income-earning opportunities for workers with relatively shorter weekly hours, specifically for those who work part time but prefer to work longer or full-time hours.

Introduction and overview: Part-time working—why should we care?

Part-time work is an essential component of the labor market for both employers and employees. Working part time can be both a blessing and a curse for workers. It is more of a blessing if a part-time job provides the incumbent worker with the number of work hours and schedule that meets their needs or preferences for working, without unduly sacrificing other aspects. Indeed, part-time positions originated to integrate those who might otherwise prefer to be entirely out of the labor force. It is more of a curse when the job provides chronically fewer than preferred hours, schedules that fluctuate so much that they create rather than resolve time conflicts with other commitments and, our focus in this paper, reduced wages and benefits for those whose hours are shorter, even if seemingly preferred. Employers benefit from the partial commitment as well, to cover or extend their office, shop, or opening hours; receive human capital that complements their full-time work force; and have buffer stocks of employees to cushion their labor demand for unforeseen cyclical fluctuations. Employers also benefit from their short-term cost savings.

Part-time employment constituted just under 17% (16.9%) of the work force in 2019, a bit higher than the 16% rates witnessed in the pre-recession 2000s, although lower than the spike of up to 20% after the recession (BLS 2020a; BLS 2020b). About one in six (17.1%) of part-time workers explicitly prefers a full-time workweek (i.e., the reasons they give for working part time are categorized by the BLS as “economic reasons,” which includes “slack work or business conditions” and “could only find part-time work”). The number of people working in part-time jobs in the U.S. economy who explicitly prefer to work full-time hours in 2019 was about 4.3 million. This number has declined since the start of the recovery in 2009 from more than 9 million workers but remains above the 4 million observed before the Great Recession;  in percentage terms, part-timers who explicitly prefer full-time work declined from over 6% of the overall workforce to nearly 3% (BLS 2020a; BLS 2020b; Valletta, Bengali, and van der List 2020). Moreover, part-time working for what the BLS considers “noneconomic” reasons (which others sometimes label “voluntary” part-time work) has been increasing in number, and remains consistently greater than 20 million (Dunn 2018; BLS 2020a; BLS 2020b). While not traditionally counted among those explicitly preferring full-time work, many of these “voluntary” part-time workers also are constrained by the inadequate systems of child care and support for the disabled and elderly, effectively forcing the “choice” of part-time working to fulfill family responsibilities.

Part-time working, and its associated wage and benefit penalties and frequent underemployment, is about 17 times as common as the attention-getting “gig”/on-demand platform-based jobs (Appelbaum and Rho 2018).1 Given that part-time working remains so prevalent, not only with a cyclical element but with an apparent structural change, part-time work conditions matter more greatly than ever (Kroll 2011; Golden 2016; Glauber 2017; Valletta 2018; Borowczyk-Martins and Lalé 2019; Bell and Blanchflower 2019).2

Furthermore, “involuntary” part-time work is more widespread than conventional measures show. A forthcoming report from the Center for Law and Social Policy (Golden and Kim 2020) creates a more complete picture than BLS measures of “involuntary” part-time working, for three reasons. One is because the former captures part-timers who want to work more hours, but not necessarily full time. A second is because part-time workers who hold multiple jobs to piece together full-time (35 or more) hours are actually not counted as part-time workers by BLS. Third and finally, because working parents who take part-time jobs because of “child care problems,” which might include a lack of affordability or availability, are actually not counted as involuntary part-time workers. The data published in the upcoming CLASP report provides a more accurate analysis of what it calls “underemployment”—workers who desire more hours—finding that the share of total employed that were part-time and underemployed is double the rate suggested by BLS using the CPS data.

Because part-time work is here to stay, it is crucial to provide a fresh look at the relative wage and benefit rates of part-time work vis-à-vis full-time work, the extent of the existing “wage penalty” for working part time, and the causes of such a penalty. How much of this wage disadvantage reflects characteristics of how part-time workers are treated versus their personal attributes? Which workers face bigger (or no) penalties? Have wage gaps between part-time and full-time jobs decreased or increased over time? Are penalties different for people who say they work part time for noneconomic reasons such as child care issues and family or personal obligations (which we consider “reasons of choice under constraint”) than for those who explicitly say they would prefer full-time working (i.e., they say they work part time for economic reasons such as slack work or the inability to find full-time work)? Do penalties differ between those whose hours are closer to the full-time workweek vs. those with only very short weekly hours? In addition to wage rate gaps, what are the differences in various benefits coverage for part-time jobs versus full-time jobs, so that we can assess a “full compensation” penalty?

The part-time penalty consists of three main elements—hourly wage rates, nonwage benefit and social insurance coverages, and inadequacy and volatility of work hours (i.e., “schedule variability”). Though this report focuses on the compensation penalties, Lambert, Fugiel, and Henly (2015); Schneider and Harknett (2019) and McCrate, Lambert, and Henly (2019) show workweek and schedule variability as a third aspect of part-time workers’ work condition disadvantage.3 This paper explores the current wage and benefits penalties associated with part-time work, and differences by type of worker, as well as by their reason for working only a number of hours associated with part-time jobs.4 The size and distribution of these wage penalties should inform public policy measures to address existing or growing wage and benefit gaps of part-time jobs and their incumbents.5

As we seek to answer these questions, we build on the existing body of research that confirms that part-time wage and benefit penalties matter. We take a special look at the roughly one in six part-time workers who works fewer than 35 hours per workweek either because of business conditions or slack work, or because they cannot find a full-time job (2019 data from BLS 2020a). Our analyses confirm what past research has indicated: that these part-time workers for economic reasons suffer not only from shortened hours (akin to the adverse effects experienced by the unemployed), but also from a large pay rate per-hour penalty just for being part time (Glauber 2013; Zukin and Van Horn 2015; Horemans, Marx, and Nolan 2016; Mousteri, Daly, and Delaney 2020).6 Studies have also shown that such underemployment tends to disproportionately burden certain labor force subgroups—males, youth, Hispanics, immigrants and also blue-collar job holders (Kler, Potia, and Shankar 2017; Young and Mattingly 2016; Wilkins and Wooden 2011). The median income for families in which women work part time for economic reasons is far lower than for women ostensibly working more “voluntarily” part time (i.e., for noneconomic reasons (Glauber 2013)). (Contrary to common practice, we avoid labeling people who work part time for noneconomic reasons as those working “voluntarily” part time because someone who works part time to deal with child care issues or family or personal obligations is likely facing constraints that restrict their choices.) The proportion of part-time workers who are the “primary earners” in their households has risen over time.7 These part-time primary earners appear to face a relatively higher risk of poverty and be more likely to not have health insurance.8

The structure of the paper is as follows. It begins with a condensed review of the existing literature and descriptive evidence on the meaning and measurement of part-time compensation differentials. It then explains how we replicated and updated a systematic analysis of the part-time wage penalty that was definitive but used data from 1995 to 2002. In brief, as we explain, we pool the cross-sectional data from the U.S. Current Population Survey (CPS) Outgoing Rotation Group (ORG) files from 2003 through 2018 to form a large data set with more than 1.7 million observations. Three estimates of the part-time wage gap are constructed—a raw estimate, one adjusted partially (just for workers’ demographic characteristics and education), and a third adding adjustment fully, including for workers’ industry sector and occupation of employment. Following the methodology discussion is a section presenting key findings. As we discuss in more detail, the results show that the size of the wage penalty not only is substantial, but it has increased in size since the period ending in the early 2000s. The size of the wage penalties by race/ethnicity, gender, reason for working part time, and number of weekly hours are reported. In addition, the potential gulf in employee benefits coverage between part-time and full-time jobs then is estimated in order to complete the picture of the potential full compensation—wage and benefit—disadvantage for those working part time.

Literature review: Conventional versus alternative explanations of the part-time wage differential

Why might wage rates per hour be lower for part-time workers relative to full-time workers? The part-time hourly wage penalty reflects a combination of possible factors (Messenger and Ray 2015). Labor economic theory suggests that there may be lower human capital among part-time job incumbents, such as skills and experience, as compared with full-timers (Montgomery 1988). This would reduce part-time workers’ relative wages. In addition, part-time workers’ fixed costs, on a per-hour basis, may be relatively higher than per-hour costs of full-time workers. Thus, a wage differential found for part-time workers might reflect a traditional, equilibrium-compensating wage differential in hourly wages for part-time work (Blau and Kahn 2017; Goldin 2014; Friesen 1997)—although this would discount the gap as a pure penalty. Workers can be heterogeneous not only in skills, but also in preferences and job search. If workers prefer shorter hours, then “part-time wage differentials can result from differences in labor supply” factors (Hirsch 2005). In addition, a part-time wage differential can arise if workers are willing to take lower-paid part-time jobs as a way of queuing for higher-paying, full-time jobs (Hirsch 2005).9 Finally, to the extent that a part-time job provides a job amenity, e.g., schedule flexibility, the wage payment could be reduced and still attract and retain labor. Workers might choose part-time employment at least in part to comply with the role(s) or identity to which they adhere, perhaps at stages in their life cycle, working part time to better integrate the competing claims on their time made by their different roles (Russo 2012), thus they would be “willing to accept low wages” (Hirsch 2005).10 Moreover, in cases when the fixed costs per hour worked are higher for part-time workers, their wage rates might be adjusted downward, as an equalization of all labor costs. A wage differential for part-time workers can arise when workers are not fungible (homogeneous) and the employers have preferences regarding how they schedule hours among workers.11

On the other hand, part-time working might be more productive per hour if there are fatigue effects in the quantity of output (if not quality) over the course of a workday or workweek.12 The higher the skill level of employees, the higher might be both the administrative costs and their relative productivity rate per hour. Higher productivity per hour, and thus higher marginal revenue product for an hour of part-time work, would reduce the wage penalty and might even create a wage premium.13 Thus, differences in preferred hours are not a sufficient condition to produce a wage penalty for all part-time jobs, if part-time workers have identical skills and create no fixed labor costs to employers—wages would equalize as employers create a mix of jobs only to reflect the preferences of employees. For example, part-time work might command a premium if these two part-time positions generate greater productivity than one full-time job sufficient to more than overcome the fixed costs. In addition, there may be a compensating wage differential necessarily developed to recruit into and retain workers in part-time positions, given the other adverse working conditions, in particular, the fewer or outright lack of employee benefits, as well as undesirable schedule times or variability.

Thus, hourly wage rates for part-timers compared with otherwise comparable full-timers might reflect either a negative wage penalty or a positive pay premium. However, this also depends on whether employers share the financial benefits—the income from greater relative productivity or lower compensation costs per hour derived from hiring part-time workers—with the workers themselves in the form of a wage boost. Certain part-time workers indeed generate such gains (i.e., “rents”) for their employers, either from their relatively higher productivity per hour or relatively lower wage rates paid (Garnero, Kampelmann, and Rycx 2014). Thus, depending on the bargaining power of employers or employees, there may be a wage premium for some and a wage penalty for others (Jepsen et al. 2005; O’Dorchai, Plasman, and Rycx 2007).

While the more conventional explanations of the penalty dominate much of the economic theory and testing of the wage differential between full-time and part-time workers, valid alternative explanations of the size of the penalty involves labor market power, job downgrading, and outright discrimination. When labor market conditions are not very tight or employers have some monopsony power, they may be more able to exploit the vulnerabilities of workers with more limited options—those who need jobs that provide some income but allow time for family or personal reasons.14 Moreover, polarization (i.e., dualism) in labor markets suggests that certain jobs, including many part time, are structured simply to contain short-run labor costs and disconnect from full-time, regular positions (Tilly 1996; Howell and Kalleberg 2019; Fernández-Kranz and Rodríguez-Planas 2011; Benton, Kim, and Wilmers 2018). Thus, the larger the gap between part-time workers and otherwise comparable full-time workers, the more it reflects how employers may treat incumbents as second-class citizens, unworthy of the full value of their productivity.

The “gross” or “raw” wage gap—a simple comparison of part-time and full-time hourly wages —typically is considered as the average wage differential between part-time and full-time workers in a given sample. The size of the penalty or premium is an empirical issue. There is mixed evidence, with quite a wide range of estimates. Much of the research starts by estimating the “unadjusted” or “raw” wage difference between part-time and full-time jobs or work per hour. This is an important first estimate because it relates most directly to workers’ choices in the labor market regarding hours of work and to consequences of those choices for their income. Estimations typically then adjust this raw differential for demographic and human capital factors such as age, experience in the labor market, education, etc., to get an “adjusted” penalty (or premium). This typically lessens the size of the penalty, by controlling for the additional experience and education that full-time workers have compared with part-time workers, on average (Baffoe-Bonnie 2004). In addition, full-time workers are more likely to have better benefits, like pensions, and be represented by unions (Bishow 2015; BLS 2019).

Previous research notes at least some pay penalties, but considerable variation in the size of same. Virtually all research indicates the adjustments to control for these differences in worker and job characteristics considerably reduce the national wage differential between full-time and part-time workers, given the substantial variation across regions and industries in full-time versus part-time composition. Studies within specific industries and occupations suggest there are part-time penalties, but these are much reduced or quite small when controlling for schooling, experience, occupation, and establishment size.15 In the United States, the raw wage penalty for part-time working men was as high as a 67% (meaning men working part time made as much as 67% less than men working full time), while among women, this was on the order of about 22% (Bardasi and Gornick 2008; O’Dorchai, Plasman, and Rycx 2007). The size of the penalty in the United States generally gets reduced by about 10% when fully adjusted with controls (Fallick 1999). A sizable average part-time wage penalty of 21%–26% for men and 19% for women—was found using earlier cross-sectional data (Blank 1990, 1998).16 With data from 1995–2002, Hirsch (2005) intended to update and reestimate this. Without any controls for demographic and work characteristics in the full sample for the raw wage penalty, there was a pay gap of 49% among men and 26% for women. Adding these controls, there was a 37% penalty for men and about 20% for women.17 With the full battery of typical control variables (personal and location variables, industry, and occupation), the part-time wage penalty was 10% for women and 22% for men (or 9 and 19 log points difference, respectively) (Hirsch 2005). This estimate is fairly consistent with other North American data, which found a 12% pay penalty with controls for personal and job characteristics included (Bardasi and Gornick 2008).18

There may be some nuanced, important differences by hours of work, even among part-time workers, in proximity to a country’s full-time workweek.19 Indeed, in the United States, the penalties found for working shorter hours per week or per year may just mirror the flipside—the pay rate premium earned for those who work longer than standard full-time hours (Blau and Kahn 2017; Goldin 2014; Cha and Weeden 2014; Bertrand, Goldin, and Katz 2010).20 Thus, the wage penalty may be smaller for those part-timers who work nearer the full-time workweek threshold.21 Indeed, recent changes in the representation of gender and parents who are working part time is associated with a decline in the gender wage gap among parents and in the motherhood wage penalty, but also with an increase in the fatherhood wage premium (Preston and Yu 2015; Weeden, Cha, and Bucca 2016; Yu and Kuo 2017). The size of a wage penalty might be smaller for those groups that have a relatively higher preference for working part time—mothers of young children, students, retirees, etc.

No known previous study has focused on the degree of voluntariness of taking or holding a part-time job, which may be associated with different compensating differentials or some of the other reasons for a penalty. The degree of voluntariness may play a role, explaining why the penalty may be larger for those who are less likely to prefer part-time working, e.g., men. In addition, a part-time pay premium could reflect a combination of several possible sources—the lack of employee benefits (so cash in lieu), the variability of hours and thus weekly earnings among hourly self-employed people, the lower job security provided by part-time positions.22A penalty also may be smaller, if not become an outright premium, for those compensated as salaried as opposed to hourly paid. Moreover, the size of a penalty or premium might vary by industry sector. Finally, the institutions within a country help shape the existence and size of the penalty or premium (Blau and Kahn 2013; McGinnity and McManus 2007).23

New estimates of the wage and compensation penalties: Methodology

The Bureau of Labor Statistics’ Current Population Survey (CPS) is a monthly survey of households in the United States. One-fourth of the employed adults (age 16 and older) in the survey’s “Basic” monthly sample—a subgroup often referred to as the “Outgoing Rotation Group” (ORG)—are asked to answer a detailed set of questions about their earnings from work. Our empirical strategy is to replicate what Hirsch (2005) had generated, using updated CPS–ORG data, from 2003 through 2018.24

The part-time wage penalty may be measured in several ways. We compare the hourly earnings of those who usually work what is considered part-time hours with hourly earnings of those whose hours are defined as full time. Part-time workers in the CPS are defined as those who worked one to 34 hours as their “usual” work hours (or during the reference, last week). These workers are subdivided into two groups as classified by the BLS: those working “part time for economic reasons” and those working “part time for noneconomic reasons.” The part-time-for-economic-reasons group includes survey respondents who said they work part time due to “slack work or unfavorable business conditions”or “an inability to find full-time work.”25 Those who usually work less than 35 hours for what the BLS calls “noneconomic reasons” are those who say they work part time because of “child care problems,” “other family/personal obligations,” “health/medical limitations,” “school/training,” “retired/Social Security limit on earnings,” “full-time workweek is less than 35 hours,” and “other for non-economic reasons.” Those who work part time for noneconomic reasons often are considered to be “voluntary” part-time workers (even though these workers’ choices are constrained by existing policies and institutions, such as the lack of resources for child care or care for family members who are older or who have a disability). Workers typically are considered to be working part time “involuntarily” when they indicate they are willing, able, and available to work full-time hours, but either had to settle for working part-time hours, or had their hours reduced by their employer (from greater than to less than 35 hours).26 Herein, we will rely on the BLS’s “economic” versus “noneconomic” reasons for working part-time hours, rather than the commonly inferred “involuntary” versus “voluntary” terminology.

The total sample size applied here, pooled within the period 2003–2018, is 1,756,419 individual observations. The sample consists of hourly and non-hourly wage earners, ages 16 and older, in the 2003–2018 EPI extracts of the CPS-ORG. Observations with allocated hourly wages or weekly earnings are excluded, as are all observations with hourly wages less than $2.00 or more than $150.00 per hour (as in Hirsch (2005)). All standard errors are clustered by state.

Demographic controls include race, gender, and education dummies, and a quintic polynomial in age. Industry and occupation controls are dummies for Census recodes of major industry and occupation categories. The key independent variable is the part-time work status of the individual. We use the Basic CPS hourly earnings question, even though employed persons in the ORG are asked about hours per week. We define “part time” by using the “usual hours at your main job,” as Hirsch (2005) does.27 For workers with varying hours, last week’s hours are used for the 35-hour cutoff (in one’s primary job). The dependent variable is the log of the wage rate (average hourly earnings) for a worker. Hourly wages are defined first as the straight time wage for nontipped workers (observations with allocated values are dropped); when that value does not exist, hourly wages are weekly earnings divided by usual hours (observations with allocated values for either weekly earnings or usual hours are dropped); for workers whose “hours vary,” weekly earnings divided by last week’s hours (observations with allocated values for either weekly earnings or last week’s hours are dropped).

All multivariate regressions use logarithm of the hourly wage as the dependent variable and are weighted using the ORG sample weights. The regressions are on the same dependent variable with the same controls and same hierarchical approach. First the models are run with the entire sample of all workers, with no controls, except for the 15 years and 51 state fixed effects. Then, sequentially adding controls, first the set of demographic and work characteristics, and then adding industry and occupation controls. We break down the part-time penalty by types of workers by race and gender, and the type of part-time work (e.g., noneconomic and economic reasons).

Part-time wage penalty empirical tests: Findings with the latest data, 2003–2018

We test for the following questions to determine the extent to which the estimated size of the part-time wage penalty is different:

• In size as it was in the earlier period, ending in 2002, as a raw or adjusted wage gap.
• By the noneconomic versus economic motivations for working part-time hours.
• By race and gender and its combinations, although part-time work is disproportionately female.
• In size to a potential add-on penalty of reduced access (coverage) regarding nonwage benefits for part-time workers.

Our empirical procedure is to conduct a three-step process estimating the size of the wage penalty for part-time workers:

• The “raw” wage gap in wage levels, with no controls for individual, state, or year fixed effects excluded and then included. The “raw” wage penalty is expected to be largest.
• The “partially adjusted” penalty, the above model and controlling for all personal and demographic characteristics, education, and location. The penalty is contrasted between shorter versus longer part-time hours per week, and economic versus noneconomic reasons for working part-time weekly hours.
• The “fully adjusted” wage penalty is estimated first without, then with, controls for both industry and occupation of the worker. Effects of the industry of employment are expected to be higher in certain industries, perhaps where part-time jobs are more prevalent.

The unadjusted wage penalty for part-time work

Part-time jobs during the period 2003 to 2018 averaged 52.4% less wages per hour compared with earnings from full-time jobs. When factoring in just the effects of location (states) and state of the economy in subperiods (year), the “raw” wage penalty is 53.1% (see Table 1). This represents a substantial size reduction in absolute earnings per hour, suggesting that part-time workers earn less than 50 cents per hour on the dollar earned by their full-time worker counterparts. To put this in perspective, the order of magnitude is more than twice the size of the raw gender gap in the United States (Blau and Kahn 2017; Yu and Kuo 2017; Weeden, Cha, and Bucca 2016; Goldin 2014; Matteazzi, Pailhé, and Solaz 2014; Leslie et al. 2012; Harkness and Waldfogel 2003). Furthermore, this represents a substantial increase in the size of the unadjusted wage penalty from 1995–2002, which was on the order of 33% (between the 46% found for men and 22% for women (Hirsch 2005)).

Adjusted pay penalties—partial, by demographic and education characteristics of workers

While the raw wage penalty for working part time is a massive one, how much of this represents different qualities of part-time and full-time workers, such as their age (a proxy for work experience) or education levels (a proxy for skills brought to a job)? Because of the many different possible characteristics of workers observable in the CPS, we next measure the adjusted wage penalty for working part time versus full time. Controlling for workers’ demographic and “human capital” (i.e., 16 educational levels) characteristics is arguably a more meaningful measure of the penalty experienced by a given worker for part-time work, and is the most common, accepted way of measuring it with large, representative surveys in the United States and other countries.28 The “partially adjusted wage penalty” estimates control for the “observable” differences among workers in their personal/demographic and education features, but also their location.29

As discussed above, the “raw” wage penalty is 52.4% and remains comparable when adding state and year controls. The partially adjusted wage penalty, controlling for workers’ demographic characteristics and education level, is 29.3% (see Table 1). So, the inclusion of demographic and education controls “knocks down” the size of the wage penalty for usually working part-time hours, as expected, but this partially adjusted wage penalty remains substantial. This means that otherwise comparable workers who usually work part-time hours earn almost 30% less than their full-time working counterparts. This is markedly higher than the 24% (18% for women, 33% for men) wage differential found for the 1995–2002 era.

The fully adjusted wage penalty, which controls also for the worker’s industry and occupation in which they are employed, is 19.8%. This suggests that part-time workers get paid about 20% less than otherwise comparable full-timers simply because they are in part-time jobs, independent of whatever occupation and industry they work in. Thus, we infer that about one-third of the only partially adjusted wage gap is attributable to part-time workers being employed in certain lower-paying sectors or job types. Nevertheless, two-thirds of the wage gap is not explained by their industry or occupation of employment. In the earlier period, “measurable” characteristics accounted for 60% of the raw wage penalty (Hirsch 2005). The fully adjusted wage penalty for part-time workers is markedly higher recently—about 20% compared with 16% in the earlier, 1995–2002 period. The increase is surprising since the skills required of part-time workers actually rose between 2007 and 2017 (Dangermond, Monaco, and Smyth 2019).

It is interesting to note that the part-time wage penalty is on par with the gender and racial wage penalties in the U.S. labor market. Female workers are paid 22.6% less than male workers with similar demographic characteristics and education levels and black workers are paid 14.9% less than white workers with similar demographic characteristics and education levels (Gould 2020).

Table 1

Part-time wage penalties, by reason for part-time work

There are differences in the part-time wage penalties based on the reason a worker works part time. The CPS asks employed persons who report “usually” working fewer than 35 hours a week, “What is your main reason for working part time?” As noted in the methodology section, the BLS divides the many reasons that workers give into “economic” and “noneconomic” reasons. (Note that the survey does not ask whether those who give noneconomic reasons would prefer full-time work were it not for these noneconomic reasons.) The main two reasons within the “part-time for economic reasons” category are those working part time because of “slack work or business conditions” and because the respondent “could only find part-time work.” Another economic reason, though cited much less often, is “seasonal work or between jobs.” Other reasons are characterized by the BLS as “part-time for noneconomic reasons.”30 Those working part time for noneconomic reasons include workers, disproportionately women, who seek part-time work more by choice, but under the constraint that they might have little access to any supports for child care, sick leaves, and other social or family obligations that, if supported more, would help enable them to work full-time hours. Thus, if one works part-time hours on a regular basis because of “child care problems” or “other family/personal obligations,” then BLS considers that one works part time “for noneconomic reasons.”

The results in Table 1 show that those working part time for economic reasons suffer a greater wage penalty. When working fewer than 35 hours for economic reasons, such as “slack work or business conditions,” the fully adjusted wage penalty is 22.3%. However, those working part time because they only have been able to find part-time work, there is a considerably higher penalty, at 29.5%. In contrast, those working part time for noneconomic reasons face a wage penalty of 18.3%, smaller in size than that faced by economic part-time workers. Thus, there is a gradation apparent: The greater the employer role in determining the part-time status of the work, the larger the wage penalty. This means workers who work part time but want full-time work not only are “hours-constrained” underemployed, but also suffer from even lower relative hourly earnings than part-time workers overall. This finding is not consistent with a compensating wage differential theory, which would imply that those working shorter hours as a personal choice should be more willing to sacrifice pay. Those who are part time for economic reasons, in post-recession years, increasingly make up a larger share of those who settle for part-time jobs in lieu of full-time jobs, rising to constitute one-third of the total among all (10) reasons provided for working fewer than 35 hours, i.e., part time (Golden 2016).

Part-time wage penalties by race and by gender

Within the 19.8%, fully adjusted wage gap for all part-time workers, there are notable differences by workers’ race or ethnicity, as shown in Table 2. For white workers, the penalty is 20.7%, a tick higher than the overall average, on par with the 20.2% penalty for black workers. The wage gap is 14.2% for Hispanic workers, or about three-fourths of the average overall. The similar size of the part-time wage group across groups suggests that the penalty for part-time working appears to be due to the part-time job itself, experienced by all incumbents across racial/ethnic groups, with only slight differences in size.

Table 2 breaks down the overall and race results by gender. Women experience a substantial wage penalty for working part-time hours of just under 16%. For men, it is substantially larger; the wage penalty is greater than 25%. Again, these differentials are somewhat greater than those found in the earlier period, which were 11% for women and 22% for men (Hirsch 2005).

Table 2

While smaller in size, the scope and the impact of working part time is greater for women than men, even though the actual size of the part-time wage penalty is larger for men than women. This is because—though not shown in the table—women are twice as likely to work part time as men—22.8% of all female workers worked part time in 2019, compared with 11.8% of all male workers. Even starker, there are 73% more women part-time workers than men part-time workers (16.1 million part-time women versus 9.3 million part-time men (BLS 2020a)).

Indeed, findings (unreported here) regarding the size of the wage penalty by the length of workweeks (also Hirsch 2005), reveal that the part-time penalty is, in large part, more of a penalty for fewer work hours. When broken out by subranges of weekly hours, there appears to be an hours gradient to the part-time wage penalty. Working 20 or fewer hours has the largest penalty, although not that much larger than working 20–29 hours, but noticeably larger than in the 30–34 hours range. However, even when working more than 35 but less than 39 hours, there also is some penalty vis-à-vis those usually working 40. Thus, there appears to be an hours-related wage penalty within part-time jobs.31 Moreover, if the Bureau of Labor Statistics definition of what constitutes “full time” (working 35 hours or more) was changed to the more legal and normative “standard” workweek of 40 hours, the impact of the wage penalty would be more widespread, given how many millions of workers work 35–39 hours.

Table 3

Table 3 shows the gender and race distribution of part-time workers, by reason. By gender, it shows that women make up a greater share of those who work part-time hours generally, both for noneconomic and economic reasons. Women make up 63.3% of part-time workers, even though women make up just 47.0% of those “at work.” Women clearly are disproportionately working part time and so a much larger share of women are affected by the part-time pay penalty.

Hispanic women and black women both make up a disproportionate share of those working part time (both for noneconomic and economic reasons). By race/ethnicity alone, black and Hispanic workers make up a disproportionate share of those working part time for economic reasons: Hispanics constitute 26.5% of all those working part time for economic reasons, in contrast to being only 17.6% of all those at work. Black workers constitute 16.7% of all those working part time for economic reasons while they are only 12.5% of all those at work. Broken by gender and race, black men and women and Hispanic men women all disproportionately work part time for economic reasons.32 But in summary, women of color appear to bear a disproportionate brunt of the part-time earnings penalty because they make up a disproportionate share of those working part time for any reason.

Differentials in employee benefits

The results so far focus on the hourly wage penalty faced by part-time workers. However, part-time workers also receive less in such benefits as retirement and health care because they frequently are excluded from such plans. Analysis of National Compensation Survey 2013 data showed that part-time workers had far less access to benefit plans than full-timers did (Bishow 2015; BLS 2015). For instance, only 37% of part-time workers had access to the employer’s retirement plan, far less than the 74% of full-time workers who did. Similarly, part-time workers had access to health care plans only 24% of the time, while full-time workers had access to health care plans 85% of the time. Part-time workers also were excluded from holiday, sick leave, and vacation plans. Access to benefits depends on the scheduled number of weekly work hours, not only whether the responding establishment reports the job as full time or part time (Bishow 2015).33

The challenge is how to incorporate analysis of these benefit gaps along with wage penalties, because the monthly survey data source (CPS) used to estimate wage penalties does not have benefit data. The only data available are from BLS’s Employer Costs for Employee Compensation series, in the National Compensation Survey, which provides breakdowns of wages and benefits separately for full-time and part-time workers (for major occupation categories). Unfortunately, these data do not allow us to control directly for differences in education, experience, or industry; however, some of these factors will be reflected in the occupation differences (i.e., workers in a similar occupation will have similar education levels).

Table 4 provides an analysis of the full compensation—both wages and benefits—for all private-sector workers and for two general occupational categories (blue-collar and service occupations). “Blue collar” includes “production, transportation, and material moving” occupations, and “service occupations” includes a variety of mostly low-wage occupations such as health care support occupations, food preparation and serving-related occupations, building and grounds cleaning and maintenance occupations, and personal care and service occupations, along with protective service occupations (firefighters, police, corrections officers).

Table 4

The analysis is focused on estimating the degree to which the full compensation penalty (incorporating both wages and benefits) is larger than that for wages only. To do so, the analysis adopts W-2 wages, a measure of wages that mirrors that used in the analysis of CPS data above. “W-2 wages” includes the BLS category of direct wages, but adds costs for paid leave and supplemental pay (because these categories are embedded in the CPS definition of wages). Nonwage benefits include insurance, retirement, and payroll taxes paid by the employer.

In the private sector, nonwage benefits make up 20.1% of full-time workers’ compensation, but account for only 16.4% of part-time workers’ compensation. As Table 4 shows, this implies that for every dollar of wages, there is 25.2 cents for benefits for full-time workers, but only 19.7 cents per dollar for part-time workers. This implies, in turn, that even if part-time and full-time workers had equivalent wages, there would be a compensation penalty of 5.5 percentage points. Thus, we can add another 5.5 percentage points to the estimated wage penalty to obtain the full compensation penalty for part-time jobs. Moreover, there is an even bigger benefits penalty, 8.3 percentage points, for those in low-wage service occupations. However, there is no apparent add-on benefits penalty among workers in the group of blue-collar jobs.34

Implications of the findings for policies to address the penalties associated with working part time

Working part-time hours clearly involves a willing sacrifice of income, sometimes an acceptable trade-off for those workers who prefer less-than-full-time work, and the flexibility that part-time jobs potentially provide compared with a full-time commitment to work or the workforce.

However, having significantly reduced per-hour compensation for the same work characteristics, hurts part-time workers, whether they are working part-time hours for either the economic or noneconomic reasons. The hourly wage penalty for working part time, in the recent U.S. labor market, is a 20% reduction in earnings per hour, even after one’s education, experience, occupation, and industry are taken into account. The part-time workers’ relative wage gap is thus on par with observed gender and racial wage gaps in the United States, and is similarly persistent and inequitable. Indeed, the wage penalty is measurably higher now than it was a decade and a half ago when Hirsch (2005) did his analysis with the same CPS data. In addition, the over 4 million U.S. workers in part-time jobs who prefer to work full-time hours (at least 35 weekly) (BLS 2020a) pay an even stiffer penalty. Even those working part time for various noneconomic reasons—which includes those who likely would prefer full-time work if they did not have such constraints as a lack of support for parenting, health issues, and the need to obtain more education—pay a penalty of over 18%.

Furthermore, part-time workers have less access to various employee benefits, suffering an additional 5.5 percentage-point benefits penalty, in the private sector, in addition to their wage penalty. These substantial compensation consequences likely reflect underlying structural and institutional factors in the U.S. economy that could and should be addressed, with a range of policy innovations. Listed below are several policies that we would need to adopt to address the part-time wage and benefits penalties and some of the key legislative efforts under way to bring them to fruition.

• Compensation parity for part-time jobs and workers. A codified measure to ensure rights for part-time workers would need to include provisions for wage fairness and pro-rated benefit coverage. Pay parity for part-time work is a basic, accepted precept of the International Labour Organization (ILO)’s Part-Time Work Convention, 1994 (No. 175)—the globally accepted standard for providing proportional parity for part-time workers. It recognizes “the economic importance of part-time work, the need for employment policies to take into account the role of part-time work in facilitating additional employment opportunities, and the need to ensure protection for part-time workers in the areas of access to employment, working conditions and social security” (Preamble), relative to “comparable full-time workers” (who have the same type of employment relationship; are engaged in the same or a similar type of work or occupation; and are employed in the same establishment) (Article 1). This standard articulates that “national law and practice shall be taken to ensure that part-time workers do not, solely because they work part time, receive a basic wage which, calculated proportionately on an hourly, performance-related, or piece-rate basis, is lower than the basic wage of comparable full-time workers.” (Article 5). “These conditions may be determined in proportion to hours of work, contributions or earnings.” (Article 6). It extends this proportional parity in pay norm to statutory social security schemes that are based on occupational activity, “so that part-time workers enjoy conditions equivalent to those of comparable full-time workers” (Article 6). Finally, it promotes that measures be taken to ensure that part-time workers receive conditions equivalent to those of comparable full-time workers for maternity leave, paid annual leave, paid public holidays, and sick leave—provided in proportion to hours of work or earnings (Article 7). The Netherlands (where 75% of women employed work fewer than 35 hours per week) has been at the forefront of creating pro-rata equivalence for part-time workers, particularly regarding salary levels and, where reasonable, also for employee benefits (Visser et al. 2004). In the United States, San Francisco’s Formula Retail Employee Rights Ordinances have such parity for part-time workers (San Francisco Office of Labor Standards Enforcement 2020, see Section 3300G.5 ).

• Access to hours for part-time workers. Work schedules that often do not provide as many hours as they want or need are a significant challenge faced by many part-time workers. The Part-Time Workers Bill of Rights Act to be introduced by Sen. Elizabeth Warren (D-Mass.) and Rep. Jan Schakowsky (D-Ill.) would address that challenge by requiring that large employers offer available hours first to current, available, qualified part-time employees before hiring new employees or temporary or subcontract workers. Some local jurisdictions are already offering such protections. Seattle’s Secure Scheduling Ordinance, adopted in 2017, provides “Access to hours” which ensures that, before new employees are hired, an employer must post notice for current employees of available hours for three days and offer the job or work to qualified current employee(s). In San Jose, California, the Opportunity to Work Ordinance requires, without specifying the number of hours for the period, that employers first offer available additional hours of work to its existing part-time workforce (who in the employer’s good faith and reasonable judgment have the skills and experience to perform the work) before hiring (sub)contractors, temps, or new part-time workers. The employer also must use a transparent and nondiscriminatory process to distribute the hours of work among those existing employees. Employers are not obliged to allocate those hours to existing employees in the event the additional hours would result in premium-owed overtime hours (The Center for Popular Democracy and Working Partnerships USA 2016). In addition to Seattle and San Jose, several cities such as Chicago; Emeryville, California;  New York City; Philadelphia; and San Francisco have introduced or passed fair workweek laws that include “access to hours” provisions.

• Control over work schedules and protections from volatile scheduling practices. Lower pay for part-time work is compounded when people do not know or control their own hours or have enough advance notice when their schedules are set or changed. Legislation to help ensure that lower-wage employees are provided with more certainty about their work schedules, hours, and income has been proposed in the U.S. Congress and proposed or passed in many statehouses and city councils across the United States. The national Schedules That Work Act of 2019 (STWA) and the local and state measures contain provisions that would diminish the income and pay disadvantages experienced by incumbents of part-time jobs. The bills generally permit employees to request changes to or stability in their work schedules without fear of retaliation, and ensure that employers consider these requests. The measures also require employers to provide a minimum advance notice of schedules, typically between seven to 14 days, that will make hours more predictable and stable for all the hourly employees in the industries covered. The provisions in fair workweek laws for New York City, the state of Oregon, San Francisco, Seattle, and elsewhere include some requirement for “predictability pay”—if a worker’s posted schedule is altered or their shift length or hours are cut, the employee is owed at least some pay for that. In certain cases, the employee is owed just an hour or two hours’ pay; in other cases, hours cuts made within 24 hours of the shift start time, employees are owed pay for no less than half the hours of the originally scheduled shift. Similarly, reporting pay requirements, which predate the proposed scheduling ordinances (CLASP, Retail Action Project, and Women Employed 2014; Ben-Ishai 2016), require a minimum payment for those showing up to work and having one’s hours eliminated or cut. All of these measures would clearly mitigate the pay suppression experienced by workers in part-time positions, not only for those who work part time for economic reasons—where the pay gap is more egregious—but for those working part time for noneconomic reasons as well, who also deserve such protections. Because part-time workers are far more likely to be given unfavor­able work schedules or face greater schedule volatility (Zukin and Van Horn 2015; Ruan and Reichman 2014; Alexander and Haley-Lock 2015; Schneider and Harknett 2019), other provisions of the STWA and local ordinances—such as prohibition of on-call work and “clopening” (being scheduled to close the business one night and be back to open the business the next morning)—would improve dimensions of part-time workers’ well-being less directly associated with pay. Similarly part-time workers would benefit from the “right to request” modifications in hours (and schedules) in the STWA and in such laws in cities and two states (New Hampshire and Vermont): Under these provisions part-time employees could expressly request additional work hours. Moreover, a minimum hours standard for part-time workers could guarantee a certain number of hours per week (such as 24 in France) to workers when hired, unless they prefer otherwise (Peck and Traub 2011). Indeed, all EU member states by 2022 will have to comply with the European Commission’s Directive for Transparency and Predictability in Work, which will incorporate elements similar to these ordinances, including “good faith estimates” of hours and schedules upon hiring of employees (European Commission 2019).

• A lower overtime pay threshold of hours for hourly paid part-time workers: Under federal law, almost all hourly workers are automatically eligible for overtime pay—1.5 times the regular rate of pay for any hours over 40 hours in a week. A lower threshold for part-time workers to be owed overtime pay—such as beyond 35 hours— would surely help address the part-time pay gap. Indeed, the proportion of part-time workers whose actual weekly hours exceeded 40 were a nontrivial 4%, and likewise, a far-greater proportion likely have weekly hours of 35 or more, given that part-time workers are more than twice as likely to report working irregular shift times.35

• Provisions allowing part-time workers to continue receiving unemployment insurance benefits while working part-time hours, for both “economic” and “noneconomic” reasons: Eligibility for partial unemployment insurance (UI) should be extended to not only those taking part-time work in lieu of finding full-time jobs, but also to anyone who seeks to reduce his or her own work schedule for compelling reasons, including personal health and child care responsibilities. UI eligibility for individuals who voluntary quit for “good cause” should be extended to workers who are forced to quit due to their erratic schedules (Ben-Ishai and McHugh 2016). The federal government should enact a minimum eligibility standard for UI benefits, as long as the work being sought is for at least 20 hours per week.36 Currently, in 28 states and the District of Columbia employees can qualify for receiving  partial unemployment insurance as “short-time compensation” (STC) payments. They are eligible if their employer (not the employees themselves) initiated cuts in their workdays or shift lengths to part-time workweeks (i.e., “work sharing”) in lieu of instituting layoffs among a group of five or more employees.

• Paid time off: Paid sick, vacation, and personal time off are available to a far lower share of workers at the bottom of the income scale, especially those in part-time jobs. National minimum paid sick time, vacation, and personal time laws are another tool that would help mitigate the income penalties part-time workers face. Having greater access to prorated paid time off may induce many workers to remain in their part-time jobs so as to best combine work with caregiving and/or schooling activities, rather than quitting for a different job or leaving the labor force. The national FAMILY Act would, if enacted, create a national family and medical leave insurance program that would apply coverage to part-time workers (National Partnership for Women & Families 2019).

Acknowledgments

The author thanks Larry Mishel and Ben Zipperer of EPI for their assistance with data and reviews of this report.

About the author

Lonnie Golden is a professor of economics and labor-employment relations at Pennsylvania State University, Abington College. He is an affiliate with the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign and the Employment Instability, Family Well-being and Social Policy Network (EINet) at the University of Chicago. He holds a Ph.D. in economics from the University of Illinois at Urbana-Champaign. His research has centered on the labor market and hours of work—specifically, the economic and noneconomic determinants of hours, including legal, organizational, and individual preferences, and their effects on employment and well-being, including work-life and worker happiness. He is coeditor of the books Working Time: International Trends, Theory and Policy Perspectives (Routledge Press) and Nonstandard Work: The Nature and Challenges of Changing Employment Arrangements (Cornell University Press), and author of many research articles that have appeared in such journals as Industrial Relations, Monthly Labor Review, Cambridge Journal of Economics, and Journal of Marriage and Family.

Endnotes

1. According to Appelbaum and Rho, “despite all the hype, gig work is an extremely small share of employment. Just 1.6 million workers—1.0 percent of total employment—were engaged in electronically mediated work in 2017.” In 2017, the total number of part-time workers was nearly 28 million (BLS 2020b).

2. The level of part-time jobs, in a state, is not significantly associated with the cost of health benefits, so the structural change involved is not mainly health care costs (Valletta, Bengali, and Van der List 2020).

3. Human capital investment such as training could be a fourth and job insecurity a fifth inherent disadvantage, leading to long-run effects on earnings trajectories (e.g., Ferber and Waldfogel 1998; Green and Ferber 2005; Wolf 2014; Paul 2016; Messenger and Ray 2015; Pedulla 2016; Kyyrä, Arranz, and García-Serrano 2017) and their job satisfaction (e.g., Wheatley 2016). Voluntary part-time working has a positive effect on longer-term earnings for women.

4. See Mishel 2013.

5. As of the end of 2019, no national legislation concerning part-time work had been introduced in the United States since H.R. 3682, the Part-Time and Temporary Workers Protection Act of 1996, 104th Congress (1995–1996), sponsored by Rep. Patricia Schroeder (D-Colo.).

6. Past CPS data confirm that those classified as involuntary part-time workers indeed work part time “involuntarily” (Stratton 1996), because involuntary part-time work tracks other indicators of underemployment (Li and McCully 2016).

7. Part-time workers who are primary earners increased from 1970, making up almost four in 10 of all part-time workers (Shaefer 2009).

8. A preference for working part time is high, particularly among mothers with children, including those who work full time and those not employed who prefer to work. Mothers in the bottom half of the income scale are more likely to prefer full-time work (Wang, Parker, and Taylor 2013).

9. This implies an “occupational crowding model” at work, where there not only is an efficiency wage leading to higher pay for full-time work, but an enlarged supply of workers with preferences for fewer than full-time hours (e.g., mothers and students). The labor demand side provides a foundation regarding why employers may favor creation of more jobs with part-time hours, or fewer in favor of more full-time positions. Employer preferences regarding the ratio of full-time and part-time jobs will depend on the ratio of fixed labor costs to the hourly wage rate, a variable cost (Zeytinoglu 1992; Montgomery and Cosgrove 1995; Lettau 1997; Barrett and Doiron 2001; Hamermesh and Stancanelli 2015; Golden 2015a; Elsayed, de Grip, and Fouarge. 2016). This would lead employers to curb the ratio of part-time to full-time jobs. A lower variable cost of wage rates, alternatively, might lead employers to hire more part-time workers, if their total compensation per hour worked is sufficiently less than that of full-time workers (Carré and Tilly 2012). On the other hand, the total administrative cost of having two part-time workers rather than one full-time worker to oversee may be higher on a per-unit basis for part-time jobs, incentivizing employers to hire fewer part-time workers.

10. To wit, across virtually all countries part-time working corresponds closely to the female share of the labor force. For more direct indicators of “schedule flexibility,” see Golden 2009 and Berg et al. 2014.

11. Hirsch (2005) uses college towns to illustrate where students are diverse in skills but care very much about which hours of the day are scheduled.

12. At least in medium-skilled service-sector work (Collewet and Sauermann 2017).

13. Indeed, Dutch firms with a large part-time employment share are relatively more productive—a 10% increase in the part-time share is associated with almost 5% higher productivity (Jepsen et al. 2005).

14. Ransom and Oaxaca (2010) find that workers who have lower labor supply elasticities get paid lower when firms have some monopsony power.

15. With panel data and the ability to control for potential individual heterogeneity among part-time and full-time workers, using individual-fixed effects models, the wage penalty estimates, not surprisingly, are lower; see Hirsch 2005 and Booth and Wood 2008.

16. Alternative methods to control for “unmeasured skill differences” to account for the potential self-selection (endogeneity) into part-time status typically find a reduced penalty size, particularly for women. One study found a 25% wage penalty for men who cut their workweek from 40 to 20 hours at retirement ages, but no such effect was noted among women (Aaronson and French 2004).

17. Studies from outside the United States show a pay penalty—in the United Kingdom, as high as 22% to 26%. About half of the pay gap, 13% among women, is “explained” by worker characteristics, but the remaining 3% to 10% (by gender) is unexplained (Manning and Petrongolo 2008). In several European countries, part-time jobs are flexible but insecure—analysis of labor market transitions in Denmark, France, Italy, the Netherlands, and Spain finds that being employed part time (mostly women) leaves one at higher risk of unemployment (Blázquez and Carcedo 2014; Anxo et al. 2007). However, wage differences between part-time and full-time workers are small in Norway (Hardoy and Schøne 2006), suggesting there is little systematic difference between part-time and full-time workers regarding the selection process or in earnings capacity, which they attribute to the Norwegian labor market providing more equal rights for part-time workers, strict rules against the discrimination of part-time workers, and a generous family policy enabling women to combine work and family life. The case of Norway suggests the importance of an institutional setting characterized by relatively strong employment protection that includes part-time workers. Partly as a consequence of this, a large proportion of Norwegian women are working part time. Similarly, with panel data on German workers, estimating a wage equation (using a random effects model), capturing the employment history and dynamic choice of employment status, controlling for the institutional context, finds that working part time with a relatively small number of weekly hours has a large causal effect on current wages. In contrast, more part-time work does not reduce current wages, although it leads to negative longer-term wage effects (Paul 2016). A study of women’s part-time work and wage penalties, using fixed-effects estimation, finds the smallest penalties for part-time employment where female labor force participation rates are lowest (McGinnity and McManus 2007).

18. Within occupations, one study finds almost a 9% wage penalty among workers in child care establishments, only a 7% gap among teacher aides and no more than 0% among teachers or among nurses, once instrumental variables or random effects estimations are conducted (Montgomery and Cosgrove 1995; MacPherson and Hirsch 1995). In caregiving jobs, being able to arrange part-time work is negatively associated with wages; i.e., care workers, on balance, trade off wages for this type of job flexibility (Smith and Folbre 2016). There may be changes over time. For example, in pharmaceutical occupations, the pay penalty has been shrinking, attributable to the reorganizing in that industry (Goldin and Katz 2016). There may be similar penalties for related forms of nonstandard jobs. The wage penalty associated with job outsourcing ranged from 4% to 7% for janitors and from 8% to 24% for security guards (with similar findings on health benefits), and were not a reflection of their lower hours (nor skill differences nor compensating differentials for higher benefits).

19. In particular, the share of female part-time workers is associated with wage penalties (whereas male part-time workers received a pay premium when working more than 25 hours). This is interpreted to reflect women’s different prime motive for reducing working hours and the types of part-time jobs available to them, or more to accommodate domestic constraints by downgrading to more flexible jobs. In Belgium, longer-hours part-time workers were more productive per hour than those at a much shorter weekly hours level (Garnero, Kampelmann, and Rycx 2014). In Germany (Wolf 2014), accounting for all available observed as well as time-constant unobserved individual characteristics yields a wage reduction for part-time workers of about 10%, with part-time men subject to higher wage penalties than women.

20. To the degree part-time work actually offers incumbents greater flexibility, there is an exponential return to greater current hours of work in high-paying occupations (Goldin 2014).

21. See Booth and Wood 2008 and Baffoe-Bonnie and Gyapong 2018 for the sensitivity of wage differential estimates to the definition of the number of weekly hours that is considered working full time.

22. Among Australia’s “casual” labor contracts, part-time workers explicitly lack long-term job security and social insurance security protections (Campbell, Whitehouse, and Baxter 2009). This lack of benefits explains the entire pay premium found for workers working part time there and in South Africa (Rodgers 2004; Posel and Muller 2008; Booth and Wood 2008). However, when controlling for unobserved individual heterogeneity (fixed effects) using panel data, part-time working men and women in Australia (Booth and Wood 2008) and in Germany (Wolf 2014) typically earn an hourly pay premium relative to those in full-time jobs.

23. See Booth and Wood 2008, Baffoe-Bonnie and Gyapong 2018 for the sensitivity of wage differential estimates to the definition of full time.

24. The matching is accomplished using IPUMS identifiers, which results in slightly different sample sizes than what Hirsch used.

25. We do not focus on the small number of respondents who say they work part time because of “seasonal declines” in demand or because their “job ended or started” during the reference week.

26. This group working part time for noneconomic reasons excludes the over 7.7 million who usually work full time but worked one to 34 hours in the last week because of vacations, holidays, weather, family obligations, or “other reasons” (according to 2019 data from BLS 2020a). An alternative way to count the number of workers part time for economic reasons who worked from one to 34 hours in the last week (whether they “usually work full time” or “usually work part time”) because of “economic reasons” is the universe of individuals who were “at work” in the reference week. Respondents who said they were not “at work” or were “absent,” but have a job, are counted as “employed.” Thus, part time for economic reasons is likely undercounted (Golden 2016).

27. Hirsch used the Basic CPS rather than ORG “usual” hours question. We substitute the answer regarding “usual hours” in the ORG with the same question in the Basic CPS to observe consistency. We also substitute the actual hours worked in the previous week being fewer than 35 and contrast. Finally, we used the “usually work part time” question as a dummy variable to contrast to “usual hours” being fewer or more than 35.

28. Controls for age show there is a significant positive effect of age on wages, but little influence of the exponentials. That is to say, earnings rise with age but neither more nor less than proportionally. In unreported results, the size of the penalty for working “usual part time” is contrasted briefly with measuring part time with workers’ “actual” hours last week being shorter than 35. The latter display somewhat lower pay penalties, which can be attributed to “actual” hours, including many full-time workers who worked fewer than 35 hours the previous week because of an absence.

29. Part-time employment appears in all major industry classifications. However, it is proportionately higher in some: private household services, leisure/hospitality, retail/wholesale trade, services-other, and education/health. Are pay penalties consistent across sectors or higher in some sectors, particularly where part-time work is more common? Unreported results show that among 50 different “intermediate” industry types, 49 have pay penalties. The variation in the partially adjusted pay penalty ranges up to 50% (with a small pay premium in only one outlier), although most fall in the 15% to 40% range. The pay penalty is above average in retail trade at 32%. Within the retail sector, working in clothing stores brings a sizably higher pay penalty, but somewhat lower in restaurants, where earnings include tips. In several industries, the pay penalty is above that of retail—more than 49% in rental and leasing services, at 46% in motion picture and sound recording and in other information services, 45% in internet publishing and broadcasting (though sample size is not large), 44% in petroleum and coal, 38% in beverage/tobacco products, 36% in publishing, and 35% in miscellaneous/nonspecified manufacturing. The sole exception to a penalty in part-time workers’ pay is in hospitals, where there is a slight pay premium of 3% (and only a small 3% pay penalty for those employed in private households). However, in health care industries other than hospitals, there is somewhat of a penalty of 6%. It suggests there is something unique about working part time in hospitals versus other health services. Even in hospitals, among those working one to 19 hours, the premium is zero. The lower penalties in certain sectors might reflect greater wage compression generally in those industries, in contrast to a wider pay disparity in other industries, particularly outside of health care.

30. Workers are provided three separate chances in the CPS to demonstrate that their part-time hours truly are “involuntary” (see Golden 2016).

31. This also suggests full-time work likely is better conceived of 40 or more hours, when it comes to pay, since working 35 to 39 hours appears to be more of a hybrid between full-time and part-time working, not entirely resembling full-time work at 40 hours or greater.

32. The totals by race and ethnicity in the table do not add up to 100% because the categories are not mutually exclusive, i.e., white includes Hispanic white workers and black includes Hispanic black workers.

33. Several other national surveys reinforce the large disparities between full-time and part-time workers in a wide range of employee benefits, or access to them. This includes parental leaves, paid sick time, paid vacation and personal time, and other perks (Kosar, van der Klaauw, and Zafar 2017; FRB 2016; AEI-Brookings-Urban Institute 2018; NWLC 2017; Glynn et al. 2016; Fronstin 2013; and Milli, Xia, and Min 2016).

34. See Bivens et al. 2017, which shows the union advantage in benefits, and supports (unreported) findings that unionized part-time workers have a 15.6% wage premium, higher than the overall average wage premium of 13.2%.

35. This policy is supported by both voluntary and involuntary part-time workers (Zukin and Van Horn 2015); see Golden 2009, 2015b.

36. See Stettner, Cassidy, and Wentworth 2016; Golden 2016; Ben-Ishai 2016; Glauber 2013; McKay 2017; Messenger and Ghosheh 2013; and NCSL 2019.

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Submitted via: irrc@irrc.state.pa.us

Re: Comments on the Department of Labor and Industry’s proposal clarifying the definitions of Executive, Administrative, and Professional salaried workers who are exempt from receiving minimum wage and overtime pay

Dear Commissioners:

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on economic policy and on the economic status of working people, and advocates for policies that lead to broadly shared economic growth. EPI submits these comments to the Department of Labor and Industry’s (the Department) proposal clarifying the definitions of Executive, Administrative, and Professional salaried workers who are exempt from receiving minimum wage and overtime pay (EAP exemptions).

The Department’s proposed rule will phase in an overtime salary threshold of $45,500 by 2022, providing 65,000 Pennsylvanians with new overtime protections and strengthening the protections of over 100,000 more (these calculations were done using the same methodology used by the U.S. Department of Labor [DOL] to calculate the economic impact of overtime protections, described in the DOL’s 2019 final rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees”).1 This proposed threshold is higher than the new Trump administration rule, which will set the salary threshold under which salaried workers are automatically entitled to overtime pay to $35,568 a year in 2020. However, it is lower than the carefully vetted 2016 rule published by the Obama administration, which would have set the threshold at roughly $51,000 in 2020. The 2016 rule was the result of an exhaustive rulemaking process spanning more than two years. However, shortly before the 2016 rule was set to go into effect, a single district court judge in Texas, using highly flawed logic, enjoined the Department of Labor from enforcing the rule, and the court later erroneously held the rule to be invalid.2 Despite what the judge claimed, the 2016 rule was by no means overly expansive. In fact, it covered far fewer workers than the threshold had covered historically. In 1975, more than 60% of full-time salaried workers earned below the threshold. By 2016, the share of workers covered had dropped to less than 7%. The 2016 rule would have only partially restored this coverage, to roughly 33%.3 But despite the fact that the 2016 threshold was well within historic norms, the Trump administration abandoned it and finalized an overtime rule with a dramatically lower threshold. It’s worth noting that if the rule had simply been adjusted for inflation since 1975, today it would be roughly $56,500—more than $20,000 higher than the Trump administration’s threshold.

Governor Wolf’s original proposed rule—the 30th percentile of the Northeast region—was much nearer the Obama threshold. The proposed final rule is, unfortunately, substantially below the Obama threshold. Further, while we are pleased the proposed rule includes automatic indexing, as it provides predictability for employers and employees alike and ensures stability and efficient government by eliminating the need for constant rulemaking, we have concerns about whether the proposed rule’s procedure for updating every three years will keep pace with the wage distribution of salaried workers.

Effect on Pennsylvania businesses, employment, and the broader Pennsylvania economy

How would a higher overtime threshold affect Pennsylvania businesses? When considering the impact on businesses, it is important to note that there are many ways employers can adjust if they have employees who are affected by the new regulations, and employers will likely use different strategies for employees who are situated differently. One option is to provide an affected worker a raise to the new salary threshold so that they remain exempt from overtime protections. Another option is to pay an affected worker overtime pay (time and a half) when they work more than 40 hours in a week. The impact of this latter option could be mitigated by managing employees’ time more efficiently, for example, avoiding late-in-the-day meetings and requiring that employees complete their weekly tasks within 40 hours, or by spreading the additional hours to part-time workers or other workers who haven’t hit the 40-hour mark and who would likely benefit from the additional hours and pay. Some employers may find it advantageous to hire new staff instead of paying overtime premiums.

Importantly, none of these changes would require reclassifying any salaried staff as hourly employees—all that’s required is keeping a record of hours worked. Because most employers already have at least some nonexempt staff, every major payroll system can already process overtime pay, meaning that most employers will not need to adopt new payroll or compliance systems. The change would also not impede employers from having flexible scheduling policies. Employees could still arrange highly flexible schedules—they would simply need to keep their hours within 40 per week if their employer wants to avoid overtime pay.

These changes will provide benefits to Pennsylvania’s employers. First, a higher overtime threshold will likely increase productivity. As mentioned above, employers may look for ways to organize workers’ time more efficiently in response to these changes. Reducing overwork is one possible way to increase efficiency, since overworked employees are less productive. Research shows that employees who have adequate time to rest and recuperate each week, or between shifts, are more productive and less prone to at-work accidents and injuries. Relatedly, excessive work hours are linked to a variety of worse health outcomes, including increased risk of stroke and heart disease, which can be expensive to employers. In addition, research demonstrates a correlation between earnings and employee turnover. As a result, it is likely that some of the costs to employers of increased overtime pay will be offset by a reduction in turnover, which is expensive to employers and also reduces productivity.4

This rule will also likely boost employment since employers may hire additional staff instead of paying overtime premiums for extra hours by existing staff. As noted by the U.S. Department of Labor in its 2016 final rule, even Goldman Sachs and the National Retail Federation found this to be true—Goldman Sachs estimated that an increase in the national salary threshold from $455 to $970 per week would result in a total of 120,000 new hires nationwide, and an analysis by the National Retail Federation estimated that such an increase would create 117,100 jobs in the retail industry alone.5

Finally, because at least some portion of affected workers will receive higher pay, expanding overtime protections can strengthen consumer buying power, particularly for middle-class households whose spending is the core driver of U.S. economic growth. This will be good for Pennsylvania’s businesses.

We thus respectfully suggest that Governor Wolf reconsider the decision to shift away from the 30th percentile of the NE region that he originally proposed. Over time, in fact, Pennsylvania should consider setting a level that is substantially higher in real terms. Afterall, the Obama threshold was a nationwide threshold, set so that it would work for the entire country, including very low-wage states in the South. A state like Pennsylvania, which is not a low-wage state, could and should set a meaningfully higher threshold. However, even at the less adequate level of $45,500, the Wolf proposed final rule is a vast improvement on the new federal rule and we appreciate Governor Wolf’s effort to make Pennsylvania’s economy a little less rigged against lower-paid salaried workers and their families.

Thank you for the opportunity to submit these comments and please do not hesitate to contact me for further information.

Sincerely,

Heidi Shierholz
Senior Economist and Director of Policy
Economic Policy Institute

1. Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees [final rule], 29 C.F.R. Part 541 (September 24, 2019).

2. Heidi Shierholz, “EPI Comments Regarding the Department of Labor’s Proposed Overtime Rule” (press release), Economic Policy Institute, May 21, 2019.

3. Economic Policy Institute, What You Need to Know About the New Overtime Pay Law (fact sheet), May 17, 2016.

4. See John Pencavel, “The Productivity of Working Hours,” Economic Journal 125, no. 589 (2014): 2052–2076; Lonnie Golden, “The Effects of Working Time on Productivity and Firm Performance, Research Synthesis Paper,” International Labor Organization (ILO) Conditions of Work and Employment Series, no. 33 (2012); Allard E. Dembe, J. Bianca Erickson, Rachel G. Delbos, and Steven M. Banks, “The Impact of Overtime and Long Work Hours on Occupational Injuries and Illnesses: New Evidence from the United States,” Occupational and Environmental Medicine 62, no. 9 (2005): 588–597; Heather Boushey and Bridget Ansel, Overworked America: The Economic Causes and Consequences of Long Work Hours, Washington Center for Equitable Growth, May 2016; Mika Kivimäki et al., “Long Working Hours and Risk of Coronary Heart Disease and Stroke: A Systematic Review and Meta-Analysis of Published and Unpublished Data for 603,838 Individuals,” The Lancet 386 (October 31, 2015); Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees [final rule], 81 Fed. Reg. 32465 (May 23, 2016) pp. 32502–32504.

5. Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees [final rule], 81 Fed. Reg. 32465 (May 23, 2016) p. 32503.

Rule Coordinator

Office of Labor Market Information

Division of Labor Standards and Statistics

633 17th St., Suite 600, Denver, CO 80202

Re: CDLE Request for Information on the Colorado wage order rule

Submitted via email to michael.primo@state.co.us

Dear Mr. Primo,

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals. We respectfully submit the following comments in response to the Colorado Department of Labor and Employment’s request for stakeholder feedback on the Colorado Minimum Wage Order (MWO) regulation, 7 CCR 1103-1, because we believe this is an excellent opportunity for the department to strengthen vital protections and improve economic conditions for Colorado workers and their families.

As explained in detail below, we recommend that Colorado restore the protections against excessive work hours originally established in the Fair Labor Standards Act of 1938 by raising the state’s salary threshold for overtime eligibility—originally intended to exempt only well-paid executive, professional, and administrative workers—to 2.5 times the state minimum wage. Doing so would set the threshold at a value of $62,400 in 2020 dollars, although the increase could be phased in gradually over several years beyond 2020. This would return the threshold to a level consistent with the salaries of bona fide executives, administrators, and skilled professionals, and would strengthen protections against excessive work hours for an estimated 393,000 workers in Colorado.

The purpose of overtime protections

The Fair Labor Standards Act (FLSA) requires employers to pay their employees at least the federal minimum wage for all hours worked, and caps at 40 the number of hours an employee can work in a workweek without additional compensation. The FLSA created the 40-hour workweek in America by requiring that employers pay an “overtime” premium of 1.5 times an employee’s regular rate of pay for all hours worked beyond 40 hours. (Prior to the FLSA’s passage, it was not uncommon for workers to work six days a week.1) Overtime protections ensure that employers have “skin in the game” when they ask employees to work long hours by making it more expensive to insist upon excessive hours of work. This overtime pay premium leads to two outcomes: 1) employees are fairly compensated when required to work long hours; and 2) employers are incentivized to hire more employees rather than overworking existing staff.

From the beginning, the law applied to both salaried employees and hourly workers. Congress and the Roosevelt administration recognized at the outset that there’s no inherent difference between an hourly worker and a salaried worker; how they are paid is entirely at the discretion of the employer. And salaried employees need time with their families and time for themselves just as much as hourly workers do.

In the FLSA, Congress provided overtime protections to most workers, but directed the Secretary of Labor to exempt “bona fide” executive, administrative, and professional (EAP) employees from these protections under the presumption that true executives, administrators, and skilled professionals possess enough individual bargaining power in the labor market and workplace that they are not at significant risk of exploitation. As former OSHA Commissioner Ross Eisenbrey and former White House Economist Jared Bernstein point out in a 2014 report:2

It is noteworthy that the exclusion is preceded by the modifier “bona fide,” a signal that not just anyone with a corresponding title is to be excluded from the act’s protections. Congress knew from experience with exemptions under the National Industrial Recovery Act’s industrial codes and the President’s Reemployment Agreement (which in 1933 began setting maximum work hours and minimum wages) that employers would try to avoid coverage by misclassifying ordinary workers as managers, executives, or other kinds of exempt “bosses.”

The U.S. Department of Labor (DOL) recognized that the simplest, most straightforward indication of genuine EAP workers’ greater bargaining power was their higher levels of pay. Thus, to prevent the abusive misclassification of rank-and-file workers as overtime-exempt executives and administrators, DOL set a salary threshold for EAP-exempt status at $30 per week in 1938—the equivalent of 3.0 times a 40-hour workweek at the minimum wage. No worker being paid less than this amount could be denied overtime when they worked more than 40 hours per week, regardless of their job duties.

Background on updating the EAP exemption

From 1940 through 1975, DOL periodically amended its overtime regulations, raising the salary threshold and making changes to the “duties test,” a fairly complicated test of the employee’s tasks and responsibilities that would establish them as a bona fide executive, manager, or highly trained professional so long as they were paid above the salary threshold. For many years, DOL maintained multiple duties tests and corresponding salary thresholds. “Long tests” were detailed assessments of executive, administrative, or professional employees’ job duties that restricted the amount of time an employee could perform “nonexempt” duties. The “short test” was far simpler, and could be quickly applied by employers to determine a worker’s exempt status. The more stringent long duties tests were paired with lower salary thresholds, while the more lenient short duties test required meeting a higher salary threshold. The objective of all of these was to strictly limit exemption from overtime to only those workers who genuinely could be considered bona fide executives, administrators, and skilled professionals.

As it was raised throughout the decades prior to 1975, the salary threshold attached to the short test—the simplest assessments of employee job responsibilities—averaged a level equal to 3.1 times the federal minimum wage. The salary threshold was as high as 6.3 times the minimum wage in 1949, and was briefly as low as 2.3 times the minimum wage in 1968 and 1969. In fact, these were the only two years in which the threshold fell below 2.5 times the minimum wage prior to 1978.3

In 1975, the last time it was meaningfully updated, the short-test overtime salary threshold was set at $250 per week—the equivalent of 3.0 times the federal minimum wage. At that level, the threshold covered nearly 63 percent of all salaried workers in the United States—meaning that unless they qualified under the complex requirements of the EAP long tests, they were automatically eligible for overtime when they worked more than 40 hours per week. Unfortunately, between 1975 and 2003, the salary threshold was left unchanged and the share of the workforce eligible for overtime fell precipitously. By 2003, only 3 percent of salaried workers were covered under the short-test threshold.4

In 2004, the Department of Labor under the Bush administration—responding to employer complaints over the complexity of the duties tests—amended the regulation to eliminate the long versions of the test, establishing the short version as the sole duties test. At the same time, DOL raised the salary threshold for exemption, but did so to a level that was far below precedent. DOL set the threshold where it remains today: $455 per week, the equivalent of $23,660 in annual salary (this would be the equivalent of $31,530 in 2018 dollars). The increase raised the share of the salaried workforce automatically eligible for overtime to roughly 15 percent, certainly an improvement, but far short of the nearly 63 percent covered in 1975. Unfortunately, because the Bush DOL regulation did not incorporate any automatic future adjustment mechanism, the EAP salary threshold has remained unchanged since. As of 2016, the share of salaried workers covered by the salary threshold had fallen to less than 7 percent.5

Recent federal efforts to update the salary threshold

As my EPI colleague and former Chief Economist at the U.S. Department of Labor Heidi Shierholz noted in recent public comments, in 2016 the Department of Labor finished an exhaustive two-year rulemaking process to raise the FLSA’s salary threshold for the EAP exemption.6 The department met with over 200 individuals and entities, including employees, employers, business associations, nonprofit organizations, employee advocates, unions, state and local government representatives, tribal representatives, and small businesses.7 The department also received and reviewed over a quarter million public comments and conducted a thorough economic impact analysis. The department issued a final rule that would have raised the EAP salary threshold to $913 per week, or $47,476 on an annualized basis, the latter being the 40th percentile of the earnings of full-time salaried workers in the lowest-wage Census Region, which was at the time, and continues to be, the South.8 (This threshold level would have covered 33 percent of the U.S. salaried workforce, and 31 percent of salaried workers in Colorado.9) Further, the rule provided that the threshold would be updated every three years to the 40th percentile of the earnings of full-time salaried workers in the lowest-wage Census Region, in order that the threshold would not continually erode over time as the wage distribution rises. EPI projects that the 2020 level of the threshold under the 2016 rule would be $982 per week ($51,064 for a full-year worker).

In November 2016—just before the 2016 rule was set to go into effect—a single district court judge in Texas enjoined the department from enforcing the rule, and the court later erroneously held the rule to be invalid. Instead of defending the rigorously determined threshold, the Labor Department under the Trump administration decided to rescind the 2016 rule and promulgate a new regulation with a much lower salary threshold. The department’s 2019 proposal is to set the salary threshold under which most salaried workers are eligible for overtime pay when they work more than 40 hours per week at $679 per week in 2020 ($35,308 for a full-year worker). A weekly wage of $679 is the projection to January 2020 of the 20th percentile of the earnings of full-time salaried workers in the lowest-wage Census Region, currently the South, and/or in the retail industry, excluding nonexempt workers and workers who are not subject to the FLSA or who are not subject to the salary level test. The proposal does not include automatic updating.

Though an improvement over the current threshold, the salary threshold of $35,308 proposed in the Trump administration’s rule cannot possibly be construed as an executive-level salary, and it will leave millions of low-paid salaried workers throughout the U.S. vulnerable to excessive work hours without recourse or additional compensation. EPI estimates that the Trump DOL’s proposed rule would cover only an estimated 8 percent of the Colorado salaried workforce.10

Updating Colorado’s overtime salary threshold

The Economic Policy Institute strongly encourages CDLE to use its authority to increase the Colorado salary threshold for the EAP exemption from overtime and follow the example of the Washington State DOL by setting the Colorado threshold at 2.5 times the state minimum wage.11 Because Colorado’s minimum wage is set to rise to $12 per hour in 2020, this would set the salary threshold at the equivalent of $62,400 in 2020 dollars, although the increase in the salary threshold could be phased in over a longer period. For example, CDLE could issue a rule increasing the threshold to 1.5 times the minimum wage in 2020, 1.75 times the minimum wage in 2021, 2.0 times the minimum wage in 2022, 2.25 times the minimum wage in 2023, and 2.5 times the minimum wage in 2024.

Table 1

Setting the Colorado EAP salary threshold at 2.5 times the minimum wage would restore it to a level closer to what it was for the first 40 years after it was created in the FLSA, when the threshold averaged 3.1 times the minimum wage. As shown in the last two columns of Table 1, a Colorado threshold at 2.5 times the minimum wage is consistent with the 2016 Obama administration’s aim to set the federal overtime threshold at the 40th percentile of the earnings of full-time salaried workers. Because the 2016 federal rule would have applied nationwide, DOL based it upon the 40th percentile of weekly earnings for salaried workers in the South Census Region, the lowest-wage region of the country. However, salaries in the West Census Region where Colorado is located are significantly higher. The 40th percentile salary in the West Census Region is projected to be $1,173 in 2020—the equivalent of $61,013 annually.12 If salaries grow only slightly faster than inflation over the next five years, the 40th percentile for the West will equal roughly 2.5 times the Colorado minimum wage in 2024.13

Finally, if the salary threshold were linked to 2.5 times the state minimum wage, CDLE would not need to revisit this issue in the future, as the threshold would be automatically updated annually as the minimum wage is adjusted for inflation. This is smart policy, as it will ensure that the threshold does not again erode over time, and avoids the costly and time-consuming process of rulemaking. Automatic indexing is advantageous for employers as well, as it allows them to know exactly what to expect each year, rather than having to guess when the department or lawmakers may choose to enact changes to the regulation.

How this change would affect Colorado workers, employers, and the economy

The Economic Policy Institute estimates that raising the EAP salary threshold to 2.5 times the state minimum wage—the equivalent of $62,400 annually in 2020 dollars—would make approximately 146,000 salaried employees in Colorado newly eligible for overtime when they work more than 40 hours per week.

Importantly, the change would also strengthen overtime protections for 247,000 salaried workers in the state who are likely eligible for overtime protection right now, but who may be misclassified as exempt. Thus, setting an appropriate threshold brings clarity to the rights of employees who are already covered and to the responsibilities of their employers. Many salaried employees paid above the current $455 per week threshold are entitled to overtime pay because their primary duties are not executive, administrative, or professional. This includes workers in scores of occupations, such as paralegals, dental assistants, and copy editors. Most bookkeepers are entitled to overtime pay, for example, but many do not know it, and neither do their bosses. With a salary threshold at 2.5 times the minimum wage, this ambiguity goes away—employees paid less could be sure of their rights and employers would know their responsibilities.

Altogether, there are about 393,000 salaried employees in Colorado who would have their right to overtime established or clarified by this higher threshold.

As a result of the proposed change, some employers will have to adjust their pay, scheduling, and possibly staffing practices because of new overtime eligibility for some of their staff. There are several ways employers could adjust:

1. They can pay overtime (time-and-a-half) for the hours in excess of 40 per week worked by employees whose salaries are below the threshold.
2. They can reduce the hours of overworked employees and share those employees’ workloads with other staff. For example, an assistant manager who now helps stock shelves and cleans floors, adding 20 extra hours to her workweek without any extra compensation, could have that work assigned to part-time employees, who would benefit from the extra hours and pay. Some employers may find it advantageous to hire additional staff rather than pay the overtime premium to existing staff.
3. They can raise salaries above the threshold if they want to continue working certain employees more than 40 hours a week without paying for or keeping track of overtime.
4. They can manage employees’ time more efficiently, avoiding late-in-the-day meetings, for example, and require that employees complete their weekly tasks within 40 hours.14

It is important to understand that none of these changes would require reclassifying any salaried staff as hourly employees—although some employers may choose to do so. It would simply require that employers record hours worked when eligible salaried staff work more than 40 hours per week. Because most employers already have at least some nonexempt staff, every major payroll system can already process overtime pay, meaning that most employers will not need to adopt new payroll or compliance systems. The change would also not stop or impede employers from having flexible scheduling policies—employees could still arrange flexible schedules; they would simply start gaining additional pay when their schedules exceed 40 hours per week.

For affected workers, these changes will lead to clear improvements in their well-being. A worker who previously was required to work long hours will now receive higher pay (either as a result of overtime premium pay or a salary increase up to the new threshold), more free time away from work, or both.

This change will also benefit the broader Colorado economy. First, overworked employees are less productive. Research shows that employees who have adequate time to rest and recuperate each week, or between shifts, are more productive and less prone to at-work accidents and injuries.15 Second, as employers adjust staff schedules and workloads, they may find it advantageous to hire additional staff instead of paying overtime premiums for extra hours by existing staff. In this way, raising the overtime threshold can stimulate job growth. Third, because at least some portion of affected workers are likely to receive higher pay, expanding overtime protections can strengthen consumer buyer power, particularly for middle-class households whose spending is the core driver of U.S. economic growth. Fourth, excessive work hours are linked to a variety of worse health outcomes, including increased risk of stroke and heart disease.16 Thus, reducing overwork has public health benefits. Finally, giving workers more time away from work gives them invaluable time to spend with their families, to help their children with homework, to spend time outdoors, to engage in volunteer or civic activities, or to care for themselves or loved ones.

Conclusion

Time is the one resource that we can never get more of. Just as workplace regulations protect people’s health and safety, they also need to value and protect workers’ time. Unfortunately, federal policymakers have let these protections erode for far too long. As is often the case, state policymakers must now step in to protect Colorado’s workforce from unfair and potentially exploitive labor practices.

Raising the Colorado salary threshold for EAP exemption from overtime would restore one of the core labor standards that helped build and grow the middle class throughout the 20th century—the right to be compensated fairly when asked to work excessive hours. To do this, the Colorado Department of Labor and Employment must set a threshold that reflects genuine executive and professional-level salaries; otherwise the regulation will not provide adequate incentive for employers to balance the additional hours they require of staff with the cost of overtime pay or raising salaries up to the new threshold.

Setting the threshold at 2.5 times the state minimum wage would be a reasonable and appropriate salary level—one that is consistent with pre-1980s precedent and with the 2016 U.S. Department of Labor’s rulemaking. By linking the threshold to the state minimum wage, it would also automate future updates, providing clarity for employers and employees alike.

Thank you for the opportunity to submit comments on the rule. Please do not hesitate to contact me at (202) 533-2566 if you have questions about EPI’s empirical analysis or any other element of these comments.

David Cooper
Senior Analyst
Economic Policy Institute
dcooper@epi.org
(202) 533-2566

1. Ross Eisenbrey, “Testimony on the Department of Labor’s Regulation Expanding Overtime Rights for Salaried Employees,” testimony before the U.S. House Committee on Small Business, Washington, D.C., June 23, 2016.

2. Jared Bernstein and Ross Eisenbrey, New Inflation-Adjusted Salary Test Would Bring Needed Clarity to FLSA Overtime Rules, Economic Policy Institute, March 2014.

3. Economic Policy Institute analysis of the Fair Labor Standards Act and amendments.

4. Celine McNicholas, Samantha Sanders, and Heidi Shierholz, What’s at Stake in the States if the 2016 Federal Raise to the Overtime Pay Threshold Is Not Preserved—and What States Can Do About It, Economic Policy Institute, November 2017.

5. Celine McNicholas, Samantha Sanders, and Heidi Shierholz, What’s at Stake in the States if the 2016 Federal Raise to the Overtime Pay Threshold Is Not Preserved—and What States Can Do About It, Economic Policy Institute, November 2017.

6. See Heidi Shierholz, “EPI Comments Regarding the Department of Labor’s Proposed Overtime Rule,” public comments submitted via regulations.gov to Amy DeBisschop, Acting Director of the Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, May 21, 2019.

7. Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees [final rule], 81 Fed. Reg. 32396 (May 23, 2016).

8. U.S. Department of Labor, Wage and Hour Division, “Final Rule: Overtime,” revised January 2018.

9. Economic Policy Institute analysis using Current Population Survey microdata.

10. Economic Policy Institute analysis using Current Population Survey microdata.

11. See Washington State Department of Labor & Industries, “Proposed Washington State Rule Would Restore Labor Protections for Thousands of Overtime-Exempt Workers” (press release), June 5, 2019.

12. Economic Policy Institute analysis using Congressional Budget Office January 2019 10-Year Economic Projections and Bureau of Labor Statistics Research Series on Deciles of Usual Weekly Earnings of Nonhourly Full-time Workers from the Current Population Survey, 2018.

13. This projection assumes salaries at the 40th percentile grow 0.5 percent faster annually than inflation.

14. For a longer discussion of these methods of adjustment, see Lonnie Golden, “Long-Overdue Overtime Update Will Give Boost to Workers and Economy,” The Conversation, July 17, 2015.

15. See John Pencavel, “The Productivity of Working Hours,” Economic Journal 125, no. 589 (2014): 2052–2076; Lonnie Golden, “The Effects of Working Time on Productivity and Firm Performance, Research Synthesis Paper,” International Labor Organization (ILO) Conditions of Work and Employment Series 33 (2012); Allard E. Dembe, J. Bianca Erickson, Rachel G. Delbos, and Steven M. Banks, “The Impact of Overtime and Long Work Hours on Occupational Injuries and Illnesses: New Evidence from the United States,” Occupational and Environmental Medicine 62, no. 9 (2005): 588–597; Heather Boushey and Bridget Ansel, Overworked America: The Economic Causes and Consequences of Long Work Hours, Washington Center for Equitable Growth, May 2016.

16. Mika Kivimäki et al., “Long Working Hours and Risk of Coronary Heart Disease and Stroke: A Systematic Review and Meta-Analysis of Published and Unpublished Data for 603,838 Individuals,” The Lancet, August 20, 2015.

Amy DeBisschop
Acting Director of the Division of Regulations, Legislation, and Interpretation
Wage and Hour Division
U.S. Department of Labor
Room S-3502
200 Constitution Avenue NW
Washington, DC 20210

Re: Comments on Regulatory Information Number (RIN) 1235-AA24: Regular Rate Under the Fair Labor Standards Act

Dear Ms. DeBisschop:

The Economic Policy Institute (EPI) submits these comments in response to the Department of Labor’s proposed rule, “Regular Rate Under the Fair Labor Standards Act.” EPI is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals.

EPI makes three points concerning this proposal.

1. The Fair Labor Standards Act (FLSA) requires employers to pay covered, nonexempt employees an overtime rate of 1.5 times their “regular rate of pay” for hours worked in excess of 40 in a workweek. It defines “regular rate of pay” broadly to include “all remuneration for employment paid to, or on behalf of, the employee” with the exception of a small number of specific exclusions, including “payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause; reasonable payments for traveling expenses, or other expenses, incurred by an employee in the furtherance of his employer’s interests and properly reimbursable by the employer; and other similar payments to an employee which are not made as compensation for his hours of employment.” The Department is proposing to add employer-provided tuition payments and reimbursement plans to the list of examples of “other similar payments” that may be excluded from the regular rate.

However, the Department’s current proposal lacks an analysis of whether a tuition program primarily benefits the employee or mutually benefits the employer and the employee. There are a wide variety of scenarios under which employers offer tuition benefits: employers may offer tuition benefits for discrete professional development courses, or broad reimbursement for any type of general education course, or retroactive limited educational loan repayment. They may specify the coursework that employees must pursue to be eligible for tuition payment, or require enrollment in a particular institution. EPI recommends either removing tuition benefits from the proposed revisions or setting forth factors to help determine when a tuition benefit is functioning like compensation for work. Such factors might include whether the employer has limited the institutions, subject matter, or courses that may be reimbursed or whether the benefit is contingent upon the employee’s perceived seriousness about a career with the company or maintenance of a certain GPA.

2. “Call-back pay”—additional compensation for calling an employee back to work without prearrangement to perform extra work after the employee’s scheduled hours have ended—can be excluded from the regular rate if the payments are “infrequent and sporadic.” The Department is proposing to remove the restriction that in order to be excluded from the regular rate, call-back pay must be “infrequent and sporadic.” The Department should withdraw this proposal and allow the language in the existing regulations to remain. When call-back payments are not infrequent and sporadic, then they are essentially compensation for work that is chronically irregular, and must be included in the regular rate.

This question is of increasing importance as a large share of employees, particularly low-wage hourly employees, regularly experience significant changes in their work schedule. For example, a national survey of early-career adults found that over a third (38 percent) know their work schedule only one week in advance or less.1 As such, in broadly excluding call-back payments or payments similar to call-back pay from the regular rate without any reference to the regularity of such payments, DOL will be creating an exception of real significance for certain categories of employees.

3. The FLSA permits employers to exclude from the regular rate certain premium payments for work in excess of—or outside of—specified daily or weekly standard work periods or for work on certain special days like weekends or holidays. Moreover, this extra compensation may be credited toward the overtime payments required by the Act. This premium pay is unique in that it is the only type of compensation that is excludable from the regular rate and also creditable toward overtime compensation.

While the FLSA does not require premium pay to be paid pursuant to a written contract in order to be excluded from the regular rate, the FLSA clearly requires that such premiums be paid pursuant to a legitimate, established agreement or policy so as not to create a means for employers to artificially lower the regular rate and avoid their full statutory overtime obligations. The Department is proposing to cut any reference to an employment agreement or contract to avoid any confusion that premium pay can only be excluded under written contracts or agreements. But instead of cutting these references as proposed, the Department should add language, such as “contract, handbook, policy, or explicit agreement or understanding.” This would clarify that even if premium pay need not be paid pursuant to a formal written contract, some form of prior agreement or understanding must exist between the employee and employer if the employer is to properly exclude premium pay from an employee’s regular rate and use it to take a credit against overtime obligations.

Thank you for the opportunity to submit comments on the NPRM. Please do not hesitate to contact me at 202- 533-2560 if you have questions.

Sincerely,

Heidi Shierholz
Senior Economist and Director of Policy

Economic Policy Institute

1. Susan J. Lambert, Peter J. Fugiel, and Julia R. Henly, Precarious Work Schedules Among Early-Career Employees in the US: A National Snapshot, Research brief issued by EINet at the University of Chicago, August 2014.