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August 13, 2024

Cities can get money from reporting labor violations, but few have

JOSÉ LUIS MARTÍNEZ / CT MIRROR Labor organizations rallying in Stamford in July 2023.
By José Luis Martínez, CT Mirror

Police departments across the state received about $22,000 in civil penalty revenue in 2023 after reporting wage and workplace violations to the state Labor Department, according to recent data.

State investigators can impose civil penalties, which range anywhere from $300 to $5,000 for each violation, on businesses if they find labor law violations.

In the 1990s, civil penalties went only to a dedicated fund, which the Labor Department had used for internal expenses such as enforcement staff. In 1997, the law was changed to allow cities to take half of the civil penalties imposed if they were the ones to report the labor violation to the state.

While the law provides a small financial incentive to police departments to report violations of wage and labor law, not many police departments have taken advantage of it.

Labor Department data shows that in the 2023 fiscal year, only eight police departments received civil penalty revenue after reporting labor violations.

 

The largest of them, the New Haven police department, received about $2,500 after reporting a local business that was found to be improperly classifying employees as independent contractors, a tactic often used by employers that want to cut costs illegally. The other $2,500 went to the Labor Department.

“There's no financial incentive for us,” said Officer Christian Bruckhart, the New Haven police department’s public information officer. “The incentive would be, if you have an establishment that's damaging the neighborhood fabric of an area and creating issues where the neighbors are complaining, that would be the incentive, because we would want to rectify those issues, but there's no financial incentive for us to do it.”

Bruckhart noted that allegations of unpaid wages are not under their purview, so they always refer those complaints to the state Labor Department.

“With some of these stores, it's finding which agency is sort of most responsible for what's going on,” Bruckhart said.

The labor violations referred by police departments ranged from not providing pay stubs to not paying minimum wage or overtime, but the violations cited most often involve workers’ compensation law, as was the case in New Haven.

Current state law requires companies to have workers’ compensation insurance for their employees so that benefits can be provided to employees who are hurt or get sick on the job, but violations of this law, by misclassifying employees as independent contractors, have been found over 4,000 times by the Wage and Workplace Standards Division in the state Labor Department.

A nearby department, the Ansonia police department, received $5,100 in civil penalties, the highest amount among police departments in 2023, after reporting a local smoke shop that was in violation of labor law by not keeping time or wage records for employees and for violating a stop-work order for over a week.

The other police departments that received money are in southwestern Connecticut: Milford, Monroe, Naugatuck, Waterbury, Westport and Fairfield.

The Milford and Fairfield police departments received no more than $500, while the others received no less than $2,500.

This financial incentive mechanism seems to be unique to Connecticut, according to Terri Gerstein, a workers’ rights lawyer of more than 20 years who served in leadership roles within labor departments in New York, was a researcher at Harvard Law School and the Economic Policy Institute and now heads the NYU Wagner Labor Initiative.

“I am not familiar with other laws elsewhere that create this kind of incentive. I’m interested to know if there have been many referrals over the years,” said Gerstein, who has conducted research into how local cities leverage local laws to enforce labor violations. “In my experience in New York, workers rarely/almost never went to police when they weren’t paid their wages.”

Regardless of who reports the labor violation, the complaint would be added to the Labor Department’s increasing backlog of complaints, meaning that the worker has to wait months to hear back about their case and the police department would also have to wait months to receive the civil penalties, if any. As of this year, the backlog is about 1,000 complaints, up from 200 in late 2020, and legislative proposals that would have increased the number of investigators have failed to pass two years in a row.

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