Another Texas city steps up on wage theft — but state efforts remain underfunded

by | Feb 4, 2022 | Economy, Policy


Austin City Council recently passed a resolution to address wage theft among construction firms, becoming the third major Texas city to do so after Houston and El Paso.

The resolution will create an ordinance that allows the city to assist employees with filing wage theft complaints. 

Wage theft occurs when employees are paid below the $7.25  minimum wage, paid less than they were promised, or not paid at all. 

The ordinance will also see improved collaboration with local law enforcement to address allegations of wage theft, and create a database of violations committed in Austin — similar to the Texas Workforce Commission, which maintains a list of businesses and individuals that are facing wage theft claims greater than $2,000. 

Workers Defense Project, a labor group for immigrants and construction workers that backed the resolution, says wage theft is a civil rights issue in Texas, the deadliest state in America for construction workers.

“One construction worker dies every three days,” said Fabiola Barreto, Austin policy coordinator for Workers Defense. “And with rampant wage theft and discrimination in Texas, construction workers don’t even have basic protections, such as workers compensation.”

Barreto said Austin’s new resolution will hopefully prevent bad actors from stealing wages and give construction workers more visible avenues to reclaim their wages, something that is especially important to immigrant Texans who are the most at-risk from such labor law violations.

“Unfortunately, that’s something that we hear at Workers Defense all the time, that somebody’s boss has threatened them with deportation if they ask for their wages again or retaliate,” Barreto said. 

“Our members have faced various forms of wage theft, no matter if it’s $50 or $500, all labor is valuable and bad actors need to be held accountable,” Barreto said. 

More than one in five of Texas construction workers have experienced wage theft, according to a 2020 report by researchers from Workers Defense and the University of Texas at Austin. 

That same report found that Texas construction workers lose an estimated $117 million a year due to wage theft, causing an estimated $8.8 million to go missing from the state’s annual tax revenue. 

To put that figure into perspective, in the 2022-23 biennium, the Texas Legislature appropriated $8.1 million to the Texas Workforce Commission’s labor law enforcement Payday Law program that handles wage theft claims. In other words, those stolen wages could very well pay for the state employees whose job it is to seek them out.

“The Texas Workforce Commission is doing the best with what they can, they are severely underfunded,” Barreto said. “In addition to that, with COVID there was a lot of strain within a lot of state agencies.”  

Since 2010, the TWC has received more than 150,000 wage claims and ordered $113.5 million worth of wages due from offending employers. 

On average, the state agency receives 12,931 claims a year, although the number of claims received and investigated by the agency has significantly declined since the pandemic began, from 11,779 in 2019, to 9,952 in 2020 and 7,448 in 2021. In general, the claims investigated and received by the agency have steadily dropped in the past decade.

In an email, a spokesperson for the Texas Workforce Commission said staff has been closely monitoring wage claim intake numbers since the beginning of the pandemic.

“We were unsure how the unprecedented job separations and unemployment claims during that period would translate into claims for unpaid wages,” they said. “As the data shows, there has been a reduction in the number of wage claims filed from the pre-pandemic period.”

“Our top priority was to ensure that we had the resources available to address any potential increases in filing volumes, but that did not happen,” they said. “We continue to analyze the FY20 and FY21 data to try and better understand if there were economic or other conditions that led to reduced wage claim filings, but as of now, we have reached no definitive conclusions as to why filings during the pandemic fell from prior years.”

The same phenomena can be seen at a national level too. An analysis by the left-leaning think tank Economic Policy Institute found that wages recovered for workers dropped significantly during the pandemic. In 2020, the U.S. Department of Labor recovered 20 percent less for workers than in 2019, and data from other state labor agencies also showed a decline in their ability to recover stolen wages. “These trends are likely a result of both continued low levels of enforcement and increased complaints overwhelming investigators during the pandemic,” researchers wrote, advocating for an increase in state-level funding for labor agencies. 

In Texas, where Gov. Greg Abbott is seeking re-election and has hit the campaign trail to boast about job figures, the state agency program devoted to making sure Texans receive wages from those jobs operates on a shoestring budget that has only grown about 1 percent since the incumbent governor entered office in 2015, from $8 million appropriated in 2015, to $8.1 million in the last two regular legislative sessions.

When adjusted for inflation, Abbott has overseen the labor law enforcement program’s steady decline from consistent underfunding that has come back to bite Texas in one of its most vulnerable moments.

fernando@texassignal.com | + posts

Fernando covers Texas politics and government at the Texas Signal. Before joining the Signal, Fernando spent two years at the Houston Chronicle and previously interned at Houston’s NPR station News 88.7. He is a graduate of the University of Houston, Jack J. Valenti School of Communication, and enjoys reading, highlighting things, and arguing on social media. You can follow him on Twitter at @fernramirez93 or email at fernando@texassignal.com

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