Labor office closes after budget cuts

State agency helped workers recover lost wages

scheduled to reopen in a year


A state agency that's helped hundreds of workers recoup millions in lost wages has gone on a one-year hiatus after funding was cut, leaving employees with little recourse to pursue earnings claims against their employers.

Workers for employers from strip clubs to nursing homes have recouped about $2.8 million by contacting Maryland's Employment Standards Service, a review of state labor data back to 1998 showed. But that state agency's work ended July 1 because of budget cuts and may not resume until summer, leaving thousands of Marylanders without a state or federal department to ensure companies pay them.

"It's unfortunate," said Elizabeth Williams, communications director for Maryland's Department of Labor, Licensing and Regulation. "It was a benefit to employees and for employers knowing there was this agency in place. If they were thinking about maybe not walking the straight line, they thought twice because they knew we'd follow up on complaints."

But now, Maryland workers have three main options when a company fails to pay any compensation from salaries to vacation benefits: going to small claims court, calling a nonprofit that helps employees or hiring a private attorney - which may not be worth it if the dispute is for a small amount.

While some cases since 1998 involved figures of $100,000 or more, thousands of claims were for $1,000 or less, according to a review of state records obtained by Capital News Service under the Maryland Public Information Act.

For many Marylanders, a few hundred dollars can make a big difference, according to Steve Smitson, director of legal services at CASA of Maryland, a community organization that counsels thousands of Central Americans who have fled wars and civil strife in their countries or sought better opportunities in the Washington area.

"While it may not be a significant case for a private attorney," Smitson said, "I've talked to a number of workers who have been evicted, not been able to pay rent and not had food on the table because they were not paid $350 ... I think closing of the office is a real loss."

But Smitson also said the agency lacked Spanish-speaking investigators, was problematic for undocumented workers and was too bureaucratic.

"It was a paper-driven process," he said. "It had some real glaring deficiencies in the way it went about completing its mission."

Robert Lawson, the commissioner of labor and industry, acknowledged the large amount of paperwork required and the lack of bilingual speakers, but he also said the agency worked with anyone who contacted it - regardless of whether they were documented workers.

"We did try to help every claimant," Lawson said. "Unfortunately, what we saw is when we asked for Social Security numbers, some would either hang up or not want to pursue their claim ... [but] it was our mission to help."

The Employment Standards Service was launched in 1965 to enforce Maryland's Minimum Wage Law.

It had eight responsibilities that ranged from ensuring companies held work permits for minors to prohibiting employers from requiring lie detector tests of an applicant.

Over time those tasks were stripped because of budget cuts and duplication at the federal level, leaving the agency with only one main job by 1994: wage payment.

The state cut funding July 1 for that last, unduplicated role of the 40-year-old unit after all agencies had to make reductions of about 12 percent in their general fund budgets.

Labor Secretary James D. Fielder Jr. said the department's other tasks, such as bank licensing and financial investigations, were a "higher priority" at the time than one agency's mission of making sure companies paid workers their wages.

"The best scenario, of course, is that you don't cut programs," Fielder said. "But that wasn't a choice we were faced with."

As a result, Marylanders must fend for themselves until summer, when the state may restore about $300,000 to the Employment Standards Service.

"I'm sad to see that the organization has been dissolved," said Fred Kelly, a former satellite equipment company employee who worked with the agency to get back $19,000 in lost wages. "It was really the speed with which DLLR acted that ... encouraged the company to pay."

Christopher Stollar writes for Capital News Service.

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