Oregon labor bureau faces massive backlog of wage claims

The Oregon Bureau of Labor and Industries is facing a massive backlog of wage theft complaints. According to its annual report, the agency saw a 208% increase in wage claims from 2020 to 2024. In response, the agency implemented an income threshold for investigations, meaning investigators are not following up on any claims from workers who make more than $25.34 an hour.

BOLI officials say the agency’s staffing hasn’t kept up with the growth of Oregon’s workforce, and they are asking lawmakers to fund more than 70 new positions. Christina Stephenson is the state labor commissioner. She joins us with more details on the agency’s nearly $18 million budget request.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. If you think you’ve been stiffed by your employer, cheated out of wages, you can take your complaint to the Oregon Bureau of Labor and Industries, or BOLI. But you won’t be alone, and there’s a chance that BOLI won’t have the resources to even investigate your case. That’s because BOLI is facing a massive backlog of wage theft complaints, one big enough that the agency is only investigating claims from people who earn less than about $25 an hour.

Christina Stephenson is Oregon’s labor commissioner. She’s asking lawmakers to fund roughly 70 new positions at BOLI to address this backlog, and she joins us now to talk about the situation. Welcome back to Think Out Loud.

Christina Stephenson: Thanks for having me.

Miller: Can you give us a sense first for … I don’t know if there is an average wage complaint, but what potential complaints look like when they come to your office? What are people saying?

Stephenson: A lot of our wage complaints are people who have not received overtime, received minimum wage. There’s meal and rest breaks as well that they haven’t received, sick time complaints, failure to be able to take their nursing mother breaks. There’s quite a bit that’s covered.

Miller: They say, “I’m looking at my paycheck, the most recent one that came, and I’m missing X money. I’ve talked to my employer.” How far along are people when they come to you?

Stephenson: Well, we’ve really seen it change over time. Previously, it might take someone $3,000 of loss on average before they would come to BOLI. It just, for whatever reason, wasn’t happening. But what we’ve seen, over time, is the amount at issue has gone down. Maybe $1,500 now is something where people are saying, “this is enough to make it worth me filing a claim.”

Miller: Do you think that is a sign of more knowledge about BOLI and that there is a place they can go? Or evidence of just economic precarity, people are in really precarious situations and not having a $1,000 is even more dire than it was a couple of years ago?

Stephenson: Well, we think it’s both. Number one, it’s been much more accessible to file with BOLI. [You] used to have to do it on paper, bring it to an office. Of course, that’s not accessible for a lot of people. As the accessibility has gone up, so have the complaints.

We also are seeing the hardship that people are reporting is extreme – 62% of people are reporting that they’re not able to meet housing, medical bills, food expenses because of the lack of wages.

Miller: So they were barely getting by, but they were getting by. But then when their wages drop unfairly, then that puts them over the edge.

Stephenson: Exactly.

Miller: Ideally, how would your office respond to a complaint when it comes in?

Stephenson: Ideally, we would be able to respond to someone within a number of weeks, two weeks I think. When we talk about somebody who is earning less than $25 an hour in particular, those are folks that it makes a difference in your ability to pay rent that month, whether or not you get your money that you’re owed, money that you earned and are entitled to. So right now, we’re looking at six months for an average in terms of being able to just assess the complaint, let alone investigate.

Miller: And during that time, it’s possible or likely that the wage theft, if it is occurring, continues?

Stephenson: The wage theft continues, the harm continues. And what we’re also seeing is that the longer people are stuck in this system that’s not moving, the more likely they are to just give up on the system.

Miller: Meaning, retract their complaint? What does it mean to give up on the system?

Stephenson: They don’t retract their complaints, so much as stop engaging with our staff who’s asking them for their pay stubs or whatever it is. I mean, the evidence is stale, the complainants have given up on our ability to do anything for them and it’s hard for them to want to invest time in that process – so they don’t.

Miller: What does the investigation actually look like?

Stephenson: The very first step in the investigation is sending out a notice of claim to the employer. And about 50% of claims are resolved at that avenue, which is why we thought it was really important to, no matter what the wage threshold was going to be, that notice of claim is going out in all claims.

Miller: So someone complains to you. And then everybody gets a letter sent out on their behalf saying, “Jane Doe says you have stolen her wages in this way.” And half the time employers say, “yeah, you’re right,” or at least that they say “OK, we will give her that money that she says she’s owed”?

Stephenson: Half the time it’s resolved in any number of ways.

Miller: What other ways? If I’m Jane Doe, the only resolution I think I want is to get my money.

Stephenson: Yeah, that’s right. Maybe by the time they get the letter, the employer has already paid, so it’s resolved because the employer paid before the letter reached them. But for the ones that it takes the letter to reach them, they’re part of that 50%.

Miller: But then that leaves half of them where the letter does not lead to a resolution. So what kind of investigation can you do, ideally?

Stephenson: Ideally, you are getting the records from the employer about the pay stubs. If the employer didn’t keep those records or never created them in the first place, then it can get more complicated. Some people write for their kids, “this is where I’m going to be at work from 8 to 5 on Wednesday,” those sort of records can help us recreate somebody’s time. Sometimes there’s witnesses. It depends on the case. Sometimes it’s just really clear: a person left on a certain day and they didn’t receive their final paycheck for three months. Those are really clear.

Miller: More than a year ago, InvestigateWest reported that from 2015 to 2020, employers in total paid less than $1 of every $10 in penalties they faced. My understanding is this is after claims were substantiated and BOLI. And these dates also, if I’m not mistaken, also predate your time as labor commissioner, ending in 2020. But this is after BOLI has said, “we found wage theft, so pay these penalties and and pay this employee.” But employers paid less than $1 of every $10 in penalties that were assessed. Why was that? What was going wrong?

Stephenson: Yeah, I mean, it’s outrageous, isn’t it? It’s outrageous. More than 40% was never recovered, 40% of wages that were assessed as owed wages and penalties.

So what is happening is it does take people, in order to go through the processes to collect on those wages. There’s a couple of pieces. Some of it is starting earlier on in the process with certain information gathering, and a lot of it is getting it through an administrative process that is completely beleaguered and does not have enough staff to to get it through the process.

Miller: So you’re saying it is a question of BOLI staffing, or is there some other judicial piece of this that’s also gummed up?

Stephenson: BOLI has an administrative prosecution team. So with additional resources at BOLI, we believe that we could increase the amount that we’re collecting. And that is part of what we’re asking the legislature for.

Miller: Have you increased that rate since you took over, or is it still at about that same rate?

Stephenson: I think it’s a great question. Our case management system is kind of end of life. It’s not a place where we are able to see amazing data. I don’t know if we have that data.

Miller: You mean the back end, the computer system you have in terms of data for even just how much money has been collected from employers who are stiffing their employees, you at the state don’t have access to that data because of your computers?

Stephenson: I wouldn’t say we don’t have access. I would say it would be difficult in terms of the amount of time it would take to obtain it.

Miller: How can you all even know how well you’re doing at your jobs then?

Stephenson: I think it’s a great question. It’s not something that has been prioritized yet, and it’s something we hope to prioritize.

Miller: Did you know the office was in this shape when you took this job?

Stephenson: Well, we knew from other reporting that there were backlogs. We knew that we would be coming into thousands backlogged in wage and hour, and civil rights. We didn’t quite know the scope of the problem, just the depth of the problem. But we also could tell that BOLI has been underfunded for decades. It has less staff than it had in the ‘80s.

Miller: When our population has doubled or something since then as a state. I’m not exactly sure what the rate is, but it may be close to that. But you have fewer people doing this investigative work.

But it also seems like you’re talking about a systemic problem here. I mean, a computer system is not staffing. It is really demoralizing that you can’t even tell me the most basic details about how your office is performing, and you’re saying that is because of software.

Stephenson: I believe it is, yes.

Miller: So let’s turn to what you’re asking for from lawmakers. Do you know how big the backlog is, or is that also in the darkness of the computer problem?

Stephenson: Well, there’s backlogs in all of the divisions. But in the wage and hour division, the current backlog is around 2,200 complaints. And the good news is that’s down about 1,000 over these two years. There were claims that were from 2022 and 2023 that our folks worked mightily to get through. So now the backlog is only 2024 claims.

Miller: How did you decide how to triage this? Can you describe the wage threshold that you instituted and why?

Stephenson: Yeah, this is one of the most difficult decisions that we’ve been forced to make. We worked with the Rutgers Workplace Justice Lab, and folks that are kind of studying the best practices for agencies like ours. These thresholds exist in a lot of other places. I think what was important for us though is to be really transparent about it. Because there’s varying degrees of transparency in this triage that’s happening.

So the salary threshold is set at 350% of the poverty line. As you said, it’s a little over $25 an hour. We estimate that that’s going to affect about 17% of workers that come to us.

Miller: Meaning, 83% of the complaints you get are people who make less than that?

Stephenson: That’s right.

Miller: OK. What was it like to institute this, to say for those 17%, “please, you can bring your complaints to us, but we do not have the resources to investigate them”?

Stephenson: I mean, it’s heartbreaking, it’s demoralizing. I guess, as somebody who dedicated their career to representing workers who had had their wages stolen or been discriminated against, telling people that we could not do everything that we think that we should do for their cases is devastating. It’s devastating for everybody who works there too. We did a ton of work, especially with community partners, to get as much communication out there as possible and get workers’ information on other avenues that they could take. And we also have a process where, if we’re able to change the threshold in the future, that we will still be able to potentially reopen those claims that were not investigated.

Miller: That would be if you get more money. What if what if you don’t get more money? Would the threshold go even lower?

Stephenson: Among the things that we have discussed in the legislature is reassessing the threshold. But more likely, it would be taking less claims altogether, of all types. Just looking at the numbers, it’s looking like 70% of claims, we just don’t have the staff to take.

Miller: Total – 70%.

Stephenson: That’s right.

Miller: Well, if that’s the case, then why have a threshold at all? Now I’m confused about what it means to not have the resources to handle the majority of cases overall, and also to say we’re only going to take ones where people make less than X amount.

Stephenson: This is the first step of the triage. We’re hoping we don’t have to get to the second step of the triage.

Miller: The second would be more drastic.

Stephenson: Right.

Miller: What does it mean to not investigate a wage claim? For example, when you said earlier that you can do an assessment and send out a letter … Does the letter still go out for people who are making $26 an hour?

Stephenson: It does.

Miller: So that may lead to resolution because an employer may get scared.

Stephenson: They may get scared or they may have additional information that helps them resolve the claim.

Miller: Do you know how often investigations are substantiated, how often it is that a claim is actually based on actual theft?

Stephenson: About 60% of our claims are substantiated, so the majority.

Miller: What exactly are you asking for from lawmakers?

Stephenson: Well, we’re asking lawmakers to help invest in the case management system that I spoke about. But really, it’s mostly staffing. So it’s getting us back to a place where we can actually do what Oregonians expect from us. They expect that if their wages are stolen, that they will be able to go to BOLI and have someone investigate their claim. They expect if they’ve been discriminated against on the job that they’ll have an investigation there as well. So it’s about a little over 70 staff, as you’ve mentioned, and about $17 million.

Miller: Republican state Representative Shelly Boshart Davis was quoted in InvestigateWest saying this, through one of her spokespeople: “Oregon bureaucrats continually ask for more money from the Democrat-controlled legislature, without having to answer tough questions about their performance because they know they will get it. We can’t afford to simply throw more money at problems without real reform.”

What’s your response?

Stephenson: I absolutely welcome all of the tough questions. And in fact, we actually requested that the secretary of state do an audit of BOLI. Because from my perspective, if anybody has extra ideas to help us improve, those are welcome.

Miller: What came from that request?

Stephenson: Well, the secretary of state is performing an audit as we speak.

Miller: What do you think your office could do? Or if not your office, then other entities in the state, to prevent wage theft from happening in the first place?

Stephenson: We spend a lot of time trying to help employers understand the rules, so that there is no question on what their obligations are – when to do the final paycheck, what minimum wage is – [give] as much information as we possibly can in terms of helping people know what’s going on. And I think that’s why the vast majority of employers support BOLI being funded, because they’re not bad actors. This is intentional utilizing wage theft as their business model. And that’s not an information problem, that’s just a cheating problem.

Miller: But in 60% of cases, that is what employers are doing. In those cases, is it your experience that this is sloppiness, or really intentional theft, that they are knowingly and ongoingly cheating their employees? I imagine there’s all different kinds of cases, but I wonder how it breaks down? “I didn’t realize that happened, I’m sorry,” versus “I’m trying to screw my employees so I can get more money.”

Stephenson: When it comes to paying employees, I think every employee deserves to work in a place where their employer has taken the time to know what the minimum wage is, to know that they have obligations to pay overtime, to know that they have the obligations to to pay sick time, those sort of things. In terms of intentionality, I would say every employer has this obligation to begin with. I couldn’t say what percentage are intentionally cheating employees.

Miller: Christina Stephenson, thanks very much.

Stephenson: Thank you.

Miller: Christina Stephenson is Oregon’s labor commissioner.

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