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"I was scared." How wage theft drains millions of dollars from Minnesota families – and what's being done to stop it.

How wage theft drains millions of dollars from Minnesota families
How wage theft drains millions of dollars from Minnesota families 04:01

SAINT PAUL, Minn. – The dream is to get a job you love so much that it doesn't matter the pay, but dreams by themselves don't often cover the rent, buy groceries, or pay for car insurance.

Jose Diaz Escobar learned that lesson as a teenager after moving to Minnesota from Guatemala to live with his father.

"The first thing was to pay all my bills," Escobar told CBS News Minnesota. "I got a job washing dishes at a restaurant."

Escobar would work 40 hours a week for a wage of $8.25 an hour – all while simultaneously attending Northfield High School.

"That was hard but I had to do it," he explained. "During the week it was 20 hours and on the weekends it was 20 hours. I sent money back to support my family, and I wanted to study here in college to be something in my life."

As if that wasn't hard enough, Escobar said after the first few weeks he started to notice something wrong with his paychecks: they were off by 10-15 hours a week.

"I clocked in, I signed the papers all correctly," he insisted. "I was frustrated and angry because I was working – and I was in high school. Angry and sad also because my goal was to help my family, but I couldn't help."

But those weren't the only emotions; according to Escobar, fear forced him to stay silent for two years on the job.

"I was scared I would lose my job, or someone wouldn't believe me if I spoke up."

$1.5B reported stolen across U.S.; $6.5M in Minnesota

He's certainly not alone, not in Minnesota nor across the country.

A CBS News Investigation dug into the data on reported wage thefts from state departments of labor, and found the total value of known cash withheld by employers is roughly $1.5 billion. Multiple labor officials, however, told CBS News the real number could be closer to $50 billion.

Octavio Chung, a union leader at LIUNA Minnesota Local 563, agreed that wage theft is overwhelmingly underreported.

"I hear it all the time. It's hard to tell you a number," Chung told CBS News Minnesota. "I go to job sites and I hear they're not getting paid the proper amount. It's really hard for workers to try to navigate this situation. It takes time and they get really frustrated."

In Minnesota, specifically, data analyzed by CBS News by the Department of Labor and Industry counted 745 claims of wage theft since 2010 with the total amount owed being $6,559,247.36.

The median amount for each case, moreover, was $886.50, the equivalent of about the average monthly mortgage payment in Minnesota, and also equivalent to about five weeks worth of groceries.

"They have to keep working. They have to keep feeding their families," Chung said of workers victimized by wage theft. "This process takes so long. What are they going to do? Wait? It's a process that needs more attention."

Wage Theft – Civil or Criminal?

Though wage theft is not exclusive to any state – or industry – how states fight or even define wage theft has emerged as a key divider, as many states consider wage theft as a civil matter. While this allows parties to filed suit seeking damages, it general limits enforcement powers to a state Department of Labor, which deals with other civil employment issues like overtime and base wages.

That was the case in Minnesota until 2019, when the Legislature passed a law that for the first time defined wage theft as a felony while also granting the Attorney General co-enforcement powers together with the Department of Labor and Industry.

"It has been going on, it has been rampant, it has been widespread, and devastating to family budgets, and yet it's been an under the radar issue," Attorney General Keith Ellison told CBS News Minnesota. "There's probably more money stolen in wage theft than a whole lot of financial crimes."

Though the law expanded the AG's enforcement powers, it did not fund additional manpower, and only until recently did the legislature actually fund a wage theft unit, which generally consists of two full-time investigators.

The DLI, meanwhile, with a 19-member Labor Standards Unit, still plays an integral role.

"We meet regularly, we talk about the things we're doing so we're not duplicating the effort because this isn't a problem that's shrinking," DLI Commissioner Nicole Blissenbach added. "We're optimistic. I think things are moving through, and I know we're optimistic on the cases we've referred that they will result in criminal charges."

There have been some recent success stories: Bartmann Companies, a Minnesota-based restaurant group, reached a $230,000 settlement with the Attorney General after an investigation determined the company laid off workers during the COVID-19 shutdowns without providing employees their last paychecks.

The investigation also found the group did not pay overtime wage to workers who worked over 40 hours a week.

The Attorney General also reported a $39,000 settlement with Loving Care Home Services, which was under investigation for not paying 60 employees on-time. 

Empowerment -> Enforcement

According to investigators, the work of investigating incidents of wage theft are time immensely time consuming and records intensive.

"Education is key," Commissioner Blissenbach added. "Without workers understanding and being able to raise and amplify their voices in the workplace, we don't have enforcement. If a worker is able to document when they're working, how many hours, where it was, those are the type of things we can rely on if that information is available."

Attorney General Ellison told CBS News Minnesota that building trust with employees is essential to overcome the fear factor of coming forward.

"Getting people with language proficiency is very important. Spanish, Somali, Korean, these are all great tools. If you can speak to someone that means a lot."

Octavio Chung, the union leader at LIUNA Local 563, said local and state leaders must reinforce protections for whistleblowers and preventing retaliation.

"If you are working here, you have a right as workers in this country," Chung emphasized. "Doesn't matter where you come from, what you like look. If you're working here, there are protections for every single worker."

Jose Diaz Escobar, now 23, has moved on from the service industry and joined Local 563 as he pursues work in construction. He has his own message to colleagues: there's nothing more American that advocating for yourself and your family.

"It's a good thing to give your family a better life and better future."

MORE: Wage theft often goes unpunished despite state systems meant to combat it

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