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Author Topic: Wage Theft is a Much Bigger Problem Than Other Forms of Theft  (Read 99 times)
Hydrogen
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June 02, 2018, 10:59:16 PM
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Wage theft—employers’ failure to pay workers money they are legally entitled to—affects far more people than more well-known and feared forms of theft such as bank robberies, convenience store robberies, street and highway robberies, and gas station robberies. Employers steal billions of dollars from their employees each year by working them off the clock, by failing to pay the minimum wage, or by cheating them of overtime pay they have a right to receive. Survey research shows that well over two-thirds of low-wage workers have been the victims of wage theft.

In 2012, there were 292,074 robberies of all kinds, including bank robberies, residential robberies, convenience store and gas station robberies, and street robberies. The total value of the property taken in those crimes was $340,850,358. By contrast, the total amount recovered for the victims of wage theft who retained private lawyers or complained to federal or state agencies was at least $933 million in 2012. This is almost three times greater than all the money stolen in robberies that year. Further, the nearly $1 billion successfully reclaimed by workers is only the tip of the wage-theft iceberg, since most victims never sue and never complain to the government.



Nevertheless, few local governments have any resources to combat wage theft, and several states have cut their labor department’s, leaving workers vulnerable to exploitation. To learn more about the devastating costs of wage theft for America’s workers and ways to combat it, see EPI’s report An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year.

https://www.epi.org/publication/wage-theft-bigger-problem-forms-theft-workers/

Here is one area where blockchain based software applications could have potential--to cut down on wage theft.

The number of hours an employee works could be coupled with the wages they're paid inside a blockchain to make the information difficult to falsify. This could help with cases where wage theft occurs. Although to be 100% honest, wage theft could be too widespread and standard a practice to be defeated at the software level. There could be a real need for state regulated push made to penalize employers for these illicit practices in order for anything else to be mildly effective.

I would be interested to know whether nefarious practices like wage theft are becoming more common, in peoples experience? The most obvious and publicized example could be employees in the gaming industry not being paid for overtime. EA games was sued more than once for this. Supposedly its extremely common in the game development industry. But I have not heard about it much in other aspects of life. I think this is an area which could be publicized more and given more attention.

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June 04, 2018, 10:48:01 AM
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Here is one area where blockchain based software applications could have potential--to cut down on wage theft.

The number of hours an employee works could be coupled with the wages they're paid inside a blockchain to make the information difficult to falsify. This could help with cases where wage theft occurs. Although to be 100% honest, wage theft could be too widespread and standard a practice to be defeated at the software level. There could be a real need for state regulated push made to penalize employers for these illicit practices in order for anything else to be mildly effective.

And how is the blockchain going to help?
It's a database, that contains data from the guys that enter it.

The company will create a so-called "smart contract" in which you receive 5000$ for 8 hours of work and it will respect the payment but in reality, will work your ass for 12 hours a day!.
We already have a contract when you get your job, you have a copy of it and you can use it in court to demand your money. With the blockchain, there will be no difference, there is no extra protection.

If they don't want to pay you, they won't and you will still have to settle this in court just like you do now.
The guys that fail to pay the minimum wage are already in the gray area and they avoid signing any papers with you, they will by no means use a blockchain solution.

Besides, the numbers pretty low, an average of 8$ a year per American worker? One hour of minimum wage pay?


Wage theft is bigger than all robberies
Wage theft is costing the average American 8$ a year

Both are correct, but one is sensational, one is meh.......




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June 04, 2018, 12:18:49 PM
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Sometimes, the employers just don`t have enough cash liquidity or revenue to pay their employees and they have to bankrupt.Is this wage theft?Not getting paid for your work is horrible and it will become a bigger problem ,because online freelance services are growing.I know that it`s easier to get scamed by a employer,when you provide freelance services.
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June 04, 2018, 11:11:26 PM
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And how is the blockchain going to help?
It's a database, that contains data from the guys that enter it.

The company will create a so-called "smart contract" in which you receive 5000$ for 8 hours of work and it will respect the payment but in reality, will work your ass for 12 hours a day!.
We already have a contract when you get your job, you have a copy of it and you can use it in court to demand your money. With the blockchain, there will be no difference, there is no extra protection.

If they don't want to pay you, they won't and you will still have to settle this in court just like you do now.
The guys that fail to pay the minimum wage are already in the gray area and they avoid signing any papers with you, they will by no means use a blockchain solution.

Besides, the numbers pretty low, an average of 8$ a year per American worker? One hour of minimum wage pay?


Wage theft is bigger than all robberies
Wage theft is costing the average American 8$ a year

Both are correct, but one is sensational, one is meh.......

I'll try to give you an example of how this could work in practice.

#1 The state could subsidize the affordable development of an open source wage and time clock accounting system.
#2 This system would be free, quickly deployable for employers and comply with standard methods of bookkeeping to help safeguard the integrity of data.
#3 Upkeep, maintenance and operation of the blockchain based system could be delegated to colleges, universities and other educational instutions as "learning" material and also potential coursework.
#4 Safety standards organizations like OSHA could be tasked with randomly showing up at workplaces to ensure employers are not abusing the system by forcing employers to work longer hours(in addition to their normal safety inspections, etc).

Such a program could have potential to improve circumstances for workers. I hear what some of you are saying and there are severe issues with taxes (and healthcare) in the united states being too unaffordable in a way which kills small businesses. High taxes and expensive healthcare has a crippling effect on the business sector, making it difficult to pay and hire workers.

In part, Trump has already taken care of that to a degree with tax cuts, but there is still plenty of room for improvement.

"Average numbers of wage theft" have potential to be misleading. Wage theft is rampant in some industries while possibly non-existent in others which makes the true loss of wages far greater than a mere $8. An example of this being rampant is in the game development sector where employees not being paid overtime wages is almost a normal practice in many instances.

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June 05, 2018, 08:28:50 PM
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Regardless of how much this sort of theft is costing the average American, it's still costing them more than robberies "on average". Being denied your rightful wage is obviously extremely bad. In some cases you might have someone losing out on thousands, others, perhaps none. But it still means that the employees in the former case suffers as a result.

I doubt that blockchain will be able to help that much, since it's still based on trust on the employers to write the rigthful data in the first place, doesn't it? It still doesn't guarantee overtime to be paid.

Quote
#4 Safety standards organizations like OSHA could be tasked with randomly showing up at workplaces to ensure employers are not abusing the system by forcing employers to work longer hours(in addition to their normal safety inspections, etc).

That could work. But how does blockchain play a role in random inspections at all?

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June 05, 2018, 09:15:14 PM
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But how does blockchain play a role in random inspections at all?
I think blockchain can play a role in random inspections by them(inspectors) comparing the data sent on the blockchain and time in and out that is on the time card of every employee. If there is a data mismatch in the time card and the data sent on the blockchain, then the employee can make an appeal to the court. This way, those inspectors can know if there are wage theft happening. Another good way to solve the problem at hand is to create a blockchain integrated app that records the data from daily time record(using the similar structure used in the app mentioned this article that will be used to prevent odometer fraud). Every time an employee time in and out, data will be sent to the blockchain showing their accurate number of working hours.
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June 05, 2018, 09:19:34 PM
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that's sad news, why people treat workers with very bad treatment, is it a dirty business act, I do not know the truth of this news, but to me this is interesting information, I do not know there is a crime like this, economic crime that terrible.
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June 05, 2018, 10:41:41 PM
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#4 Safety standards organizations like OSHA could be tasked with randomly showing up at workplaces to ensure employers are not abusing the system by forcing employers to work longer hours(in addition to their normal safety inspections, etc).

That could work. But how does blockchain play a role in random inspections at all?

I made that up off the top of my head. It could have flaws.  Smiley

In that instance blockchain would be utilized to maintain data integrity of work schedules and hours on the job. To pevent "cooking the books" or data from being easily modifiable the way it would be in a typical back end database. The role of inspections would be to ensure employees are working the hours they're scheduled without the "off the books" unpaid overtime.

This isn't necessarily anything new. Awhile ago there was a story in the news about a blockchain based ledger system being utilized in the legal marijuana industry to track products and ensure that customers are receiving what they pay for without expensive weed being substituted for weed of lesser value, etc. Also to help protect against theft and other illicit activities, et al.

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June 06, 2018, 01:30:34 PM
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This isn't necessarily anything new. Awhile ago there was a story in the news about a blockchain based ledger system being utilized in the legal marijuana industry to track products and ensure that customers are receiving what they pay for without expensive weed being substituted for weed of lesser value, etc. Also to help protect against theft and other illicit activities, et al.


From last to first Cheesy
And how is the blockchain going to prevent that?
Yeah, you scan your parcel and it shows it's the real stuff but who guarantees that the merchandise hasn't been substituted with lower quality?
It's the same stuff with cigarettes, in EU at least they have a security stamp but who checks them?
And even if they check it, how can you be sure there are not thousands of them with a copied code?

In the end, there must be a control that makes sure the blockchain data and the real-life situation are the same.
And..... we already have that with the current system.


I made that up off the top of my head. It could have flaws.  Smiley

In that instance blockchain would be utilized to maintain data integrity of work schedules and hours on the job. To pevent "cooking the books" or data from being easily modifiable the way it would be in a typical back end database. The role of inspections would be to ensure employees are working the hours they're scheduled without the "off the books" unpaid overtime.

As I said in the previous example.
When you get employed, you signed a contract.
If the company is not respecting the deal you can always go and file a claim with whatever authority is changer of that in your country.
Things worked like that for decades, the blockchain isn't bringing anything new in the picture.
Just another database, useless if the judge or the work safety inspector says otherwise.

#1 The state could subsidize the affordable development of an open source wage and time clock accounting system.

No, no and once more NO!
Why should the state use my money to help idiots who don't know how to protect their rights.
Those funds should come as a percentage fee from the ones that request assistance.

#2 This system would be free, quickly deployable for employers and comply with standard methods of bookkeeping to help safeguard the integrity of data.

You know too well, there is nothing free. Somebody must pay for that.

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June 06, 2018, 07:35:40 PM
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Here is one area where blockchain based software applications could have potential--to cut down on wage theft.

The number of hours an employee works could be coupled with the wages they're paid inside a blockchain to make the information difficult to falsify. This could help with cases where wage theft occurs. Although to be 100% honest, wage theft could be too widespread and standard a practice to be defeated at the software level. There could be a real need for state regulated push made to penalize employers for these illicit practices in order for anything else to be mildly effective.

I would be interested to know whether nefarious practices like wage theft are becoming more common, in peoples experience? The most obvious and publicized example could be employees in the gaming industry not being paid for overtime. EA games was sued more than once for this. Supposedly its extremely common in the game development industry. But I have not heard about it much in other aspects of life. I think this is an area which could be publicized more and given more attention.

This is another huge social epidemic that would continue to widen the gap between the rich and the poor because the poor are the ones needs the extra buck from overtime to augment their resources for it to be able to meet up but now being denied, it then mean they earn less, they save less which means some will have no choice than to pass the hope of prosperity to their offspring and their future generations.

I get the part on how blockchain could ensure more transparency but it does not remove the human factor because no organisation would install what they cannot control for its workers and because a lot of employees of private establishments have no labor union, they tend to be caged and in countries with huge labour, they are at the mercy of their employers in which management can mandate the number of hours employees can fill irrespective of the number of hours worked.




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June 06, 2018, 08:40:20 PM
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Sometimes, the employers just don`t have enough cash liquidity or revenue to pay their employees and they have to bankrupt.Is this wage theft?

Yes. Employers need to retain adequate liquidity to cover their payrolls. That's the most basic requirement in running a business. That's the trade-off of business: if you work for a wage, you require a steady paycheck. Your hourly wage shouldn't be contingent on the owner's risk-taking. Only the owner should be exposed to that kind of risk, since he's entitled to all potential profit.

I've personally lost hundreds of hours in wages due to off-the-clock work. I'm skeptical of how blockchains could help solve anything. Compliance with labor laws is ultimately a business decision where owners weigh the cost of violations against the cost of paying proper wages. They report what they want to report....period. If this all boils down to depending on OSHA and their local counterparts to monitor and inspect, it's dead in the water. It's just more of the same.

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June 06, 2018, 09:36:37 PM
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IMO the only way blockchain could help here is if there's an automated system that pays the worker every single day in cryptocurrency. Worker accepts BTC, leaves work, scans ID at the gate, 10 min later a bitcoin transaction appears on his wallet. Boom! Suddenly wage theft gets reduced to some insignificant number. Oh, wait, it's already an insignificant number. Smiley
The market is self regulating and you can see it here on the forum. Signature managers who were new in the business had to offer daily, or even offered upfront payments to prove themselves. If people did not trust their employers they would demand daily wages. Since employers don't have to run around town looking for people willing to work, the current system can't be that bad.
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August 05, 2018, 06:51:44 AM
 #13

Sometimes, the employers just don`t have enough cash liquidity or revenue to pay their employees and they have to bankrupt.Is this wage theft?Not getting paid for your work is horrible and it will become a bigger problem ,because online freelance services are growing.I know that it`s easier to get scamed by a employer,when you provide freelance services.
Absolutely consider these facilities, need to be further clarified. This situation is very detrimental for these employees. Measures should be taken and the security investigated by the investigators to avoid these bad phenomena. There are ways to get more revenue and profit, but doing these bad things will end well not good. Always remember.
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