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Corporations have paid out $8.8B as a result of so-called ‘wage theft’ litigation

Many large corporations operating in the United States have boosted their profits by forcing employees to work off the clock, cheating them out of required overtime pay, and engaging in similar practices that together are known as “wage theft,” according to a new report, Grand Theft Paycheck: The Large Corporations Shortchanging Their Workers’ Wages, published by the Corporate Research Project of Good Jobs First and Jobs With Justice Education Fund. Among other things, the analysis found that corporations paid out $8.8 billion is successful wage theft cases brought against them.

Overview. Through a detailed analysis of federal and state court records, the report shows that these corporations have paid out billions of dollars to resolve wage theft lawsuits brought by workers. Walmart, which has long been associated with such practices, is at the top, but the list of the most-penalized employers also includes Bank of America, Wells Fargo, and other large banks and insurance companies, as well as major technology and healthcare corporations. Many of the large corporations are repeat offenders—450 firms have each paid out $1 million or more in settlements and/or judgments.

The report summarizes a year-long compilation and analysis of 1,200 successful wage theft litigation cases brought against large companies that have been resolved since the beginning of 2000. These cases, in which employers have paid out a total of $8.8 billion, involve occupations ranging from cashiers and security guards to financial advisors and pharmaceutical sales representatives. The same group of companies paid another $400 million in penalties to the U.S. Department of Labor’s Wage and Hour Division during that period.

Three-quarters of the $9.2 billion in overall penalties came from the giant companies included in the Fortune 500, the Fortune Global 500 and the Forbes list of the largest privately held firms.

Highly profitable. Many companies accused of “wage theft” are highly profitable, according to the report. Among the dozen most-penalized corporations, all but two had an annual net income of more than $2 billion in their most recent fiscal year. AT&T, JPMorgan Chase, and Wells Fargo each had more than $20 billion in profits. These companies pay their chief executives generous salaries, bonuses, and perks—CEOs at AT&T, Bank of America, JPMorgan Chase, and Walmart each receive annual compensation of more than $20 million, according to the report.

Most penalized corporations. Among the dozen most-penalized corporations, Walmart, with $1.4 billion in total wage settlements and fines, is the only retailer. Second is FedEx with $502 million. Half of the top dozen are banks and insurance companies, including Bank of America ($381 million); Wells Fargo ($205 million); JPMorgan Chase ($160 million); and State Farm Insurance ($140 million).

Most penalized industries. The report reveals that, owing to Walmart, retailing is the industry with the highest aggregate penalties ($2.7 billion) imposed on large companies. Financial services ($1.4 billion) comes in second, followed by freight and logistics ($828 million), business services ($611 million), insurance ($557 million), miscellaneous services ($486 million), healthcare services ($417 million), restaurants and foodservice ($397 million), information technology ($335 million), and food and beverage products ($315 million).

Repeat offenders. More than 100 companies have paid penalties in three or more collective action lawsuits, according to the report. Bank of America and its subsidiaries did so more than two dozen times.

Private suits. Half of the private lawsuits documented in the report came from California, which has a rigorous labor code that can be enforced either in state court or in combination with federal rules in U.S. courts.

Sealed settlements. The totals and rankings are based on penalties that were publicly disclosed, although the report documents 127 additional cases involving 89 large companies that petitioned courts to keep the details of their wage settlements confidential. AT&T, Home Depot, Verizon Communications, Comcast, Lowe’s, and Best Buy each had multiple sealed settlements, according to the report.

Corporate misconduct database. Along with more than 300,000 other regulatory penalties, the data used in the report can be viewed and downloaded from ViolationTracker.org, the nation’s first comprehensive database on corporate misconduct.

Following California’s lead. The report attributes California’s high rate of private suits to the state’s strengthening of its anti-wage theft laws in a manner that all states and, where applicable, localities could do. “California provides a model for other states to emulate to ensure that working people have access to courts to hold cheating bosses accountable and that agencies have resources they need to enforce the laws,” according to one of the report’s authors.

“Our findings make it clear that wage theft goes far beyond sweatshops, fast-food outlets, and retailers,” Good Jobs First Research Director Philip Mattera, the lead author of the report, said in a statement. “It is built into the business model of a substantial portion of Corporate America.”

“At Wells Fargo, aggressive sales quotas based on exploiting vulnerable customers forced me into 12-hour shifts with no breaks and no food allowed—and threats to withhold my paycheck if I didn’t sign off on working extra hours for free,” says Kilian Colin, who worked for the bank between 2013 and 2016 in southern California.

Good Jobs First, based in Washington, DC, describes itself “as is a non-profit, non-partisan resource center promoting accountability in economic development.” Its Corporate Research Project provides research resources for organizations and individuals concerned about all forms of corporate accountability. Jobs With Justice Education Fund describes itself as “a national network expanding people’s ability to come together to improve their workplaces, their communities, and their lives.”