Wednesday, June 20, 2012

Deadbeat employer website now up

The Government of Alberta has set up a website identifying deadbeat employers—those who owe workers wages. There are about 1700 employers listed on the website and they collectively owe 3500 workers nearly $14 million. 

Publically embarrassing employers for breaking the law is an excellent (and cost-effective) enforcement tactic. That said, Alberta’s first stab at this does not go far enough because it only shows employers who owe wages (the deadbeat employers).

It doesn’t tell us which employers shorted workers wages but then paid up when they got busted. And it doesn’t tell us which employers made workers work too many days in a row or hired children illegally.

In that way, this website doesn’t do anything about the real problem facing employment standards—which is there is no disincentive for breaking the law. In fact, the reverse is true. Employers have an incentive to break the law—which is saving some money—because the worst consequence they face is having to pay what they should have paid in the first place.

There are several ways this effort could be improved. The government could name every employer who violates any part of the employment standards code each month and tell us what they did. That creates an immediate and embarrassing consequence for the employer. Just telling us who the deadbeats are doesn’t help—these employers clearly don’t care one way or the other and may not even be in business any more (as the list goes back 10 years).

A second solution is fining employers for violating the law. That creates an actual incentive for employers to comply with the law because they’ll be financially punished when they break it.

A third solution is increasing the number of random inspections each year. Right now, employment standards is mostly complaint-driven. Complaint-driven systems basically don’t work. A US study found 130 overtime pay violations for every complaint filed-- some industries have up to 800 violations per complaint. We see similar rates of non-reporting in other Canadian jurisdictions.

By contrast, random inspections unearth all manner of non-compliance and ensure that the law is actually followed. Right now we see a small number of random inspections. Under a 1000 a year is the number I’ve heard, but I can’t substantiate that anywhere because the government doesn’t disclose that information. With 140,000 employers and over 2 million workers, there is basically no chance of an employer getting caught breaking the law and no real penalty if they do get caught.

Along with the deadbeat employer website, the government has rolled out a series of new videos about how to comply with employment standards. Education is nice and all, but bundling the deadbeat website together with education frames violations as rooted in ignorance. This is a nice storyline for a pro-employer government and is likely necessary to get buy in from the Minister and caucus. But it obscures that employer greed is also a factor in violations—a big factor.

Consider SSEC Canada Inc., a subsidiary of a Chinese company. It owes about $3.5m to a variety of Chinese nationals who were brought to Alberta to work in 2009. The government discovered this money was owed when it was investigating a pair of fatalities in Fort McMurray. And the employer clearly bilked its workers out of their pay—pay the government hasn’t collected and (in the Legislature) admitted it will likely never collect. 

Education can’t remedy that. Only penalizing employers for violating the law can.

-- Bob Barnetson


  1. A fascinating post by David Doorey on this issue here:

    His take is that, when an employer makes the shit list (I'm paraphrasing...), they should be subject to a modified set of unionization rules that makes it easier for workers to bring in a union (because clearly a union is necessary).

    The reasoning is quite compelling and the proposal is quite (technically) workable, Whether a government that is as pro-business as Alberta's would consider such a step is a different question.

    Over to you, Minister Hancock... .

  2. An interesting editorial from the Edmonton Journal:

  3. Trucking is filled with deadbeat employers. A typical ploy is to hire a guy and then think they can "trap" him into staying and working for:
    Less wages than were promised
    Less than full time work
    Expecting violation of hours of service
    Expecting operation with mechanical defects
    Expecting significant work done WITHOUT pay.

    When a guy refuses and quits, the "employer" claims the driver has a "bad attitude" and refuses to pay.

    Another common ploy is for the "employer" to call the police and claim he is being harassed to evade payment.

    People should know that the wait to get a case heard by the labor board is up to a year and there is little that can be done to enforce a judgement.

    Instead of the government going on ad nauseum about it's mythical ability to create jobs, perhaps they should focus more on protecting the jobs that already exist.

    Note that the web page Truckers Report, has a section in forums for naming deadbeat employers. A simple google search of an employers name will usually come up with the posting.

    Another way for people to protect themselves is to continually look at job boards even when they are not looking for a job, especially the popular one with the funny name. "Employers" that are constantly looking week after week are usually deadbeats or general problem employers.

    It should be noted that this particular website is for profit and although they say they allow users to flag ads, they do not.

    Canadians should consider using the non profit website Craigslist that is free of advertising and is quick to remove ads that users find unacceptable.