Budget cuts pull teeth from state's wage laws

Government budget cuts have gutted the enforcement of wage laws in Maryland, leaving thousands of workers without protection against employers who cheat them out of pay.

Maryland decided last year to save money by leaving wage law enforcement to the U.S. Department of Labor. But a growing number of Maryland workers and government officials say the federal agency hasn't filled the void.


As a result, Marylanders are increasingly vulnerable to exploitation by cash-strapped or dishonest employers -- just when the workers, caught amid economic turmoil, most need protection.

"It is just unbelievable. I couldn't get anyone to help us," said Sandra Bennett, a former GBS Inc. employee. She tried and failed to get state and federal attorneys to help her and 45 co-workers collect more than three weeks' worth of unpaid salaries.


After being turned away by the state and federal labor departments, Ms. Bennett and her co-workers had to hire a private attorney -- at a cost of $7,000 so far -- to seek the money.

"Especially in these times, this is ridiculous," Ms. Bennett said, adding that she often hears of workers denied pay or overtime they've earned. "So many people could really use it now."

No one knows how many workers are being cheated by employers. Neither the state nor federal government keeps complete statistics any more.

But everyone agrees that Ms. Bennett is not alone.

"Companies are ripping off employees . . . and there is no place to help them," says Nancy Burkheimer, Maryland's assistant secretary of licensing and regulation.

To save the state about $700,000 a year, the licensing secretary's office shut its 15-person wage law enforcement division in November 1991.

The knowledge that the federal government had locally based workers to enforce child labor, minimum wage and overtime laws "had an enormous amount of play in the decision," said Ms. Burkheimer.

But many have been disappointed by the Department of Labor's response.


Investigations into workers' complaints are inadequate and take far too long, the House Committee on Government Operations said in a report issued last month. The committee blamed the problems on deep staff cuts at the department's wage and hour division.

The committee also said that when the government finally doespress charges against an employer, it tends to settle for pennies on the dollar.

Department of Labor officials say they are doing the best job they can with the resources and authority they are given.

Spokesman Robert Cuccia defended the agency, saying it conducted "60,000 investigations into child labor, overtime and minimum wage violations last year, and we recovered $100 million in back wages . . . We've done a remarkable job."

But even agency officials say they can't help Marylanders in one important task: collecting back pay.

Baltimore-based labor department investigators say they are turning away as many as 100 calls a day for help in collecting back pay. Why? Because while Maryland law requires employers to pay workers promised wages for their time, federal law requires payment only of the $4.25-per-hour minimum wage for time worked.


If someone calls to complain that an employer has refused to pay wages, "We tell them we can't do anything about it," says Erica Williams, an investigator for the department's Baltimore office.

Mr. Cuccia says the department's investigators recommend that workers who are owed back pay go after their employers themselves. "They can go to small claims court where they don't need an attorney, or they can get a Bar Association referral," he said. There are ways for workers to collect money that they are owed, he says.

But Marylanders who have taken that route say that in many cases, workers are simply stuck.

Joseph Grigg of Timonium is involved in one of the last cases handled by the state before its wage and hour division closed.

Although he claims he is owed about $40,000 in unpaid commissions by a previous employer -- an unusually large claim that could generate hefty attorney's fees -- he's had a tough time finding a private attorney to help him.

"What if somebody was owed $2,000? They wouldn't have a prayer," said Mr. Grigg. "You can't get a lawyer to represent you."


Despite the growing number of stories like those of Ms. Bennett and Mr. Grigg, government officials say there is little hope the state will reopen its wage law enforcement office any time soon.

This fall, administrative analyst Dave Smulski studied the office's closure and decided it was "too early to determine the effects."

Workers upset about the lack of enforcement haven't contacted state and federal legislators, and the news media haven't reported a rush of complaints, Mr. Smulski says. "There wasn't a major outcry."

So Mr. Smulski recently recommended that the General Assembly study the issue, to determine whether Maryland workers can collect their money without the state's help.

Besides the federal government and small claims court, Baltimore City residents can file claims with the city's wage and hour division, Mr. Smulski notes.

"This is a golden opportunity to see whether these people do have some recourse."