Employers in industries with more undocumented and low-wage workers left the most wages and penalties unpaid.
By Kaylee Tornay / InvestigateWest / December 4, 2023
When Brandon Bondehagen filed a wage claim with Oregon’s Bureau of Labor and Industries against Revolution Film Group in 2016, he was in a comparably better spot than some of his co-workers.
Bondehagen didn’t stake his survival on the paychecks he made working for about a month as a camera assistant in the creation of “V-Force: New Dawn of V.I.C.T.O.R.Y,” a campy superhero film that ultimately was never released. But he still wanted his final paycheck of about $1,000, which never arrived, and so did dozens of other workers who also filed claims against the company, some seeking four times what Bondehagen was shorted. In total, Oregon’s labor bureau put Revolution Film Group on the hook for more than $360,000 in wages, penalties and interest.
But the company didn’t pay a dime of that total. Instead, the labor bureau paid workers more than $62,000 out of its own dedicated fund. Revolution Film Group’s parent company was also sued by its investors, filed bankruptcy in 2017 and ultimately closed. The owners did not respond to a request for comment.
“I feel worse for those folks that really took a hit,” Bondehagen said. “The fact that an employer like that can not have to ever come back and pay you, it doesn’t bode well for the employee. If you say you’re going to pay somebody, pay them.”
Brandon Bondehagen worked as a camera assistant on a film produced by Revolution Film Group in 2016. (Photo courtesy of Brandon Bondehagen)
Oregon, however, has struggled to hold employers like Revolution Film Group accountable for their failure to pay workers, the Bureau of Labor and Industries’ own data shows. Of the nearly $12 million that the agency ordered employers to pay in back wages and penalties over the last eight years, more than 40% — almost $5 million — was never recovered, an InvestigateWest analysis found.
In some industries that employ high rates of undocumented or lower-wage workers, the collection rates are far worse. In certain sectors of the construction industry, for example, the labor bureau recovered less than a quarter of owed wages and penalties from employers.
Meanwhile, Oregon lawmakers have failed to take steps that other states have taken to make workers whole and hold employers responsible, including increasing consequences for failure to pay. Oregon’s labor officials, while dealing with funding and staffing challenges, say they’ve been trying to find more ways to do so on their own.
But it’s not clear how those efforts have paid off in recent years, because an uptick in wage claims since late 2020 created a backlog. Cases now take longer to resolve, requiring greater persistence from workers to see their claims through.
A landscape that allows delinquent employers to skirt responsibility for paying what they owe is bad both for workers and employers who follow the law, experts and legislators said.
“It’s alarming, but it does not surprise me,” said Rep. Paul Holvey, D-Eugene, chair of Oregon’s House Committee on Business and Labor. “We’ve had (employers) show up in committee and testify that if the state doesn’t start cracking down on these violations, they’re going to have to start cheating just to compete. It really creates an uneven and unfair playing field.”
Legal loopholes to close
Oregon isn’t the only state that has a difficult time recovering wages and penalties for workers.
A 2018 POLITICO survey of labor agencies in 15 states found that, on average, they failed to collect 41% of wages owed in minimum wage claims. That rate was equivalent to Oregon’s during the time period InvestigateWest examined.
Labor agencies tasked with investigating wage claims take pains to ensure that employers have a fair shot at defending themselves. When a wage claim is filed, the claimant must provide evidence of what’s owed to them, and employers are able to contest the investigator’s findings.
But unscrupulous employers with know-how can use those processes to stall the collection on their debt, either by hiding their income and assets from being seized, or simply wearing down complaining workers.
“They play these shell games,” said Jenn Round, director of the Beyond the Bill initiative at Rutgers University’s workplace justice lab. Round works with state labor bureaus, including Oregon’s, to improve their collection rates and increase employer compliance with wage laws.
Round listed a few examples of actions employers can take during the investigation that confound many states’ ability to collect on debts, including transferring liability to other companies across state lines, moving assets from one entity to another, or even simply changing the name of the original business.
“To be able to track those employers down and hold them liable, it takes a lot of time, a lot of resources and a lot of know-how,” Round said. “It’s a place where a lot of agencies are weak, at all levels.”
Some state policymakers and agencies have fine-tuned their tools over the years to prevent employers from exploiting the safeguards meant to make the wage claim process fair. Oregon leaders, however, have not taken similar actions.
In 2021, Washington passed a law to help increase workers’ chances of being able to collect on their wage claims. The new law enabled workers to obtain a lien on their employer’s property even before a final judgment on the wage claim is issued. The lien keeps the property from being sold, but workers are only able to foreclose on it if they get a judgment in their favor.
The law is new and it will take time to measure its impact. But in 2022, Washington’s Department of Labor and Industries’ collection rate on wages and penalties owed was higher than Oregon’s: 66%, up from 59% the previous year.
Back in 2017, Oregon’s Coalition to Stop Wage Theft, a group of around three dozen nonprofits and community organizations, tried to get a similar law passed in Salem. It died in committee and has not been resurrected.
Other states have implemented accountability for employers who don’t pay valid wage claims. New Jersey, for example, passed a law in 2019 that empowered the state to strip employers of their business license over wage theft. The law also imposes criminal penalties for wage theft, a rare step that only a handful of other states have taken.
Oregon employers who fail to pay their workers don’t have to worry about losing their business licenses or facing criminal penalties — one exception being licensed construction contractors, whose licenses can be suspended by the Construction Contractors Board until they clear outstanding wage debt.
The Multnomah County District Attorney’s Office has explored prosecution of wage theft through an agreement with Oregon’s labor bureau to share information and even conduct joint investigations. That agreement was put into place in March 2022.
“Since any referral to (the district attorney) would be for criminal prosecution of wage theft, this is not an enforcement tool that we would use for every investigation,” said Rachel Mann, spokesperson for the Bureau of Labor and Industries. “Rather, it is meant for the most egregious of wage theft cases.”
As of October 2023, Mann said, the Multnomah County District Attorney had not prosecuted any cases under the agreement.
Backlogs create complications
When the pandemic hit, Oregon’s Bureau of Labor and Industries tried to make it easier for workers to file wage claims online by creating a new form on its website. Since then, the agency’s wage and hour division has seen a steady increase in claims filed each year, said Laura van Enckevort, division administrator.
But even with that increase, labor officials and experts agreed that the wage theft captured in state and federal data still remains an incomplete picture of wages actually stolen. That’s particularly true in industries that tend to employ lower-wage and undocumented workers, such as construction, agriculture and restaurants, they said. Oregon is home to an estimated 72,000 undocumented workers, which is similar to other states with a comparable population, according to a 2019 estimate from the Migration Policy Institute.
But it was in construction, restaurants and other such industries that workers suffered the most wage theft during the eight years InvestigateWest examined. And those employers also left the most money unpaid.
Each year on average, residential construction businesses cumulatively failed to pay more than $88,000 in claimed wages and penalties. They continue to owe more than $700,000 from the last eight years. Employers that the labor bureau categorizes as “miscellaneous business services,” which includes a wide swath of work from janitorial and landscaping to call centers, owe more than half a million dollars, and employers in crop production owe nearly $350,000.
The increase in wage claims also came after Oregon’s staff of wage investigators had decreased over the last two decades, according to a 2019 analysis by the Oregon Center for Public Policy, a nonprofit that is one of the members of Oregon’s Coalition to Stop Wage Theft. In the last two years, the Legislature has increased the labor bureau’s funding, including adding to the number of investigators.
The ratio of investigators to workers has improved, but remains lower in Oregon than in some other states. While Oregon’s wage division now has one investigator for every 204,000 workers, Washington has one investigator for approximately every 98,500 workers, for example.
The increase in wage claims and turnover in the wage division led to longer timelines for claims to be investigated and orders issued. Van Enckevort reported to the Legislature in March that wage claim investigations were taking 101 days on average.
“How many workers can hang on that long?” said Holvey, the state representative from Eugene. “And how many workers just go, ‘It’s not worth filing a wage claim’? They just take what they get and keep working, because they don’t really have a lot of choices, and they don’t want to jeopardize losing their job over it.
“It becomes a very difficult and sad choice when workers have to walk away from money that’s owed them,” he said.
Legislative action stymied
Worker advocates with Oregon’s Coalition to Stop Wage Theft said they’re frustrated that Oregon has failed to take more meaningful steps toward accountability for employers.
“I know there are some lawmakers who are concerned,” said Janet Bauer, former director of policy research with the Oregon Center for Public Policy. “The challenge is getting enough votes.”
This past legislative session, Holvey introduced a bill that would have made construction contractors liable for their subcontractors’ failure to pay workers’ wages. California and New York have passed similar legislation in recent years, looking to disincentivize contractors from hiring subcontractors who lower costs based on wage theft.
Holvey’s bill drew significant criticism from construction groups, who protested that contractors stood to be on the hook for wage theft that they didn’t know was happening. The bill passed the House, but, like many other bills, stalled during the six-week Republican walkout from the Senate.
“This is the kind of thing that’s really frustrating, when you see a good policy that’s worked in other states, yet in our state, there’s huge opposition to it,” Holvey said. “People don’t want to vote on it because they want to stay friends with the (builders lobby).”
In the meantime, Oregon’s labor bureau has focused on increasing employees’ access to the wage security fund, which was established in 1985 to pay workers whose employers went bankrupt. Today, the labor bureau will pay workers up to $10,000 from the wage security fund after a final order is issued, even if the business is still open and collections are ongoing. It is financed by employers’ unemployment insurance taxes.
InvestigateWest found that the wage security fund was used in about 31% of all valid wage claims over the last eight years.
Van Enckevort, head of the wage division in Oregon, said legislative changes in 2021 enabled workers to be paid from the wage security fund after a judgment is filed, while the collections process continues.
Round lauded Oregon’s wage security fund for being both one of the oldest and most accessible.
But its power is still limited, she said.
“What it doesn't do is actually hold the employer accountable who’s liable,” she said.
Holvey said he is working with colleagues in the state Senate to bring back a version of his construction bill in 2024, this time introducing it in the Senate. He sees it as a step to protect at least some of Oregon’s vulnerable workers.
“I remain hopeful that people will keep working on this and keep trying to address it,” Holvey said.
FEATURED IMAGE: In certain sectors of the construction industry, the labor bureau recovered less than a quarter of owed wages and penalties from employers. (Yury Kim/Pexels)
InvestigateWest (invw.org) is an independent news nonprofit dedicated to investigative journalism in the Pacific Northwest. Kaylee Tornay can be reached at kaylee@invw.org.
CORRECTION: This story was updated to reflect current policies regarding use of the Wage Security Fund.
