Report Suggest $900M in ‘Wage Theft’ Impacts 250,000 Iowa Workers

(Radio Iowa) A new study suggests Iowa workers are underpaid by at least 900 million dollars a year. Common Good Iowa, the group issuing the report, calls that wage theft. Sean Finn, the report’s author, says an estimated 250-thousand Iowans are impacted.

“That means that on average one in seven workers in Iowa are shorted $300 a week,” Finn says. Finn says some workers are not paid the overtime they’re owed or their employers fails to follow minimum wage laws. Other full-time workers are misclassified as a independent contractor, which Finn says lets the employer avoid paying taxes and benefits.

“Theft in Iowa whether it’s larceny, robbery, burglary — all of those crimes, costs around $90 million a year according to the FBI,” Finn says. “We estimate wage theft being at least $900 million a year, so this problem is ten times greater than other theft and, at the same time, very little is being done to stop it.” Finn’s report is titled “A Heist in Plain Sight” and he argues businesses that are violating wage laws are hurting responsible employers who are following the rules.

“Businesses are using wage theft to cut costs and illegally cut corners,” Finn says. “They can artificially lower their costs and offer lower bids on projects or just run with lower operating costs, maybe keep their prices lower.” The Iowa Workforce Development agency is using part of a federal grant to investigate businesses that may be misclassifying employees as independent contractors. Last year the agency collected a quarter of a million dollars to settle 341 claims over unpaid or underpaid wages.