Las Vegas Sun

October 18, 2017

Currently: 62° — Complete forecast

Daily Memo: Lost Wages:

More businesses say: We didn’t pay them ’cause we can’t

Recession brings on group wage complaints

Recently the doors at both Adam’s Ribs restaurants abruptly closed, hitting employees on their way out sans paychecks.

This sent most of them straight to the office of the Nevada labor commissioner to file complaints that they were stiffed out of three weeks of pay.

The scenario is not uncommon these days: Businesses close and workers go unpaid.

“I looked at the total number of wage claims the other day and was horrified,” Labor Commissioner Michael Tanchek told me.

Claims for unpaid wages are up significantly this year compared with last, because of the crippling recession. Last month 311 claims were filed, compared with 211 in March 2008.

In better times, wage disputes with companies would usually involve a single employee. But lately, as businesses collapse under the weight of the falling economy, the commissioner is seeing more complaints of the Adam’s Ribs variety, in which entire groups of employees file claims.

“One guy will come in, and word gets out. Then we have the whole business to deal with on one case,” Tanchek said.

The labor commissioner’s primary function is to enforce Nevada’s labor laws, and resolving wage disputes is a considerable part of the job. An employee who believes he has been shorted his pay files a claim for the amount he says he is owed. The labor commissioner’s office sends a letter to the employer, who has 10 days to respond with either a promise that the employee will be paid or a dispute of the employee’s claim. If an employer can provide proof that the employee’s claim is bogus, the case is dropped. If the issue is murky, there might be a hearing to decide who is right.

If the employer fails to respond and the investigator determines money is indeed owed, the labor commissioner issues an order for the wages to be paid. That’s what happened in the case of Adam’s Ribs. Eleven workers are due $24,000 in back wages and penalties.

If owner Adam Carmer fails to pay within 60 days of that order, the matter goes to Justice Court for judgment.

All of this is easier when the economy is humming. As lead Southern Nevada investigator Larry Dizon puts it: “Either you owe or you don’t owe,” so when an employer ignores the labor commissioner, it’s normally because “Mr. Employer just wants to play hardball.”

But less so these days. In the past six months or so, many employers are responding to claims, acknowledging they owe, and not being able to do anything about it.

“With the economy the way it is we’re seeing situations where employers are saying: ‘Yeah, we know we owe them money. We just don’t have it. We can’t pay them, can’t pay us, can’t pay our bills, can’t pay anything,’ ” Tanchek said.

An example of just how hard it is out there: A couple of months ago a homeless employee filed a claim against an employer who, it turned out, had also become homeless, Tanchek recalled.

“We’re seeing people getting caught in problems that in normal times or better times they wouldn’t get caught in,” Tanchek said.

But whatever the reason for failing to pay employees on time, delinquency costs employers money. Nevada has a law that entitles employees to be compensated at the same rate for each day their former employer fails to pay them, up to 30 days. When the employer comes to the table, the commissioner usually negotiates those fees, because 50 percent of something is better than 100 percent of nothing.

In this economy, though, laid-off employees could be waiting a long time for their cash.

One can’t get blood out of an turnip.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy