Alderman Cracks Down on Wage Theft with New Ordinance

Chicago businesses could lose their licenses if caught stealing from their employees by paying below minimum wage or withholding overtime pay.

The regulation comes from North Side Ald. Ameya Pawar, who covers the nearby 47th Ward which includes Lincoln Square and Northcenter. He recently co-sponsored an anti-wage theft ordinance that unanimously passed the city council Jan. 17.

In last decade, the wards that cover Bucktown and Wicker Park—1 and 32—have had a combined total of 24 reports of wage theft. That’s according to Arise Chicago, an organization that advocates for worker justice and education.

The center sees about 12 calls or walk-ins a day about wage theft, representatives have said. Most cases occur in the restaurant, retail and janitorial industries, said Adam Kader, the worker center director for Arise.

In September, the organization studied wage theft in the car wash industry in Chicago. One-third of employees and almost 70 percent of all car washes in the city were surveyed.

More than 75 percent of those workers earned below minimum wage and 98 percent of workers weren’t compensated for overtime hours. The average employee washed cars for 54 hours a week.

The study exposes wage theft through delayed payments, no overtime pay and unpaid off-the-clock work.

Refugees and single parents are the most likely victims of wage theft, Pawar said. His connection to the issue stems from his time working at Heartland Alliance Refugees and Immigrant Community Services.

“When you talk about building resilient communities, financial resiliency has to be a major part of that and part of what I saw in vulnerable communities… they’re working places where their employers were stealing from them,” he said.

Pawar was also a victim of wage theft. While working as a valet in high school, he earned $3 an hour plus tips.

“Getting that $3 an hour from the company was almost impossible. They delayed paying me for weeks on end, which is wage theft, and in some cases, they just wouldn’t pay me,” he said.

About $7.3 million is stolen from workers each week in Cook County, according to the University of Illinois-Chicago Center for Urban Economic Development.

“These ordinances are really important for the public to become more informed,” Kader said. “When you take clothes to the dry cleaners, ask how much workers are being paid.” 

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Pawar began working on the ordinance in the summer of 2012 with co-sponsors Emma Mitts (37) and Daniel Solis (25). Anti-wage theft, along with another ordinance regulating debt collectors, will go into effect this summer.

The second ordinance mandates a city license for debt collectors. It also requires them to provide documentation of the original debt. Sometimes, when a bill goes to collection, it’s sold from collector to collector, Pawar said. The collector that contacts the consumer may not know the original amount or bill.

With each collector claiming a fee, a $100 debt might turn into a $400 debt, he said.

“This is not a way for people to get away with not paying their debt, but we also want to protect people from getting preyed on,” Pawar said.

Not having a license or violating this ordinance can result in fines from $250 to $2,500 for the first offense. Debt collectors also must wait four years after an infraction to reapply for a license, according to the ordinance. 

Debt collection and wage theft are part of Pawar’s larger mission to protect consumers in the ward and throughout the city. 

In February 2012, he helped pass an ordinance that added credit history and unemployment amendments to the human rights framework. Along with race and sexual orientation, job advertisements cannot ban unemployed applicants. Also, employers cannot inquire or make hiring decisions based on the credit history of an applicant.