Employers Gone Rogue: Explaining Industry Variation in Violations of Workplace Laws

Abstract

Drawing on an innovative, representative survey of workers in Chicago, Los Angeles, and New York City, the authors analyze minimum wage, overtime, and other workplace violations in the low-wage labor market. They document significant interindustry variation in both the mix and the prevalence of violations, and they show that while differences in workforce composition are important in explaining that variation, differences in job and employer characteristics play the stronger role. The authors suggest that industry noncompliance rates are shaped by both product market and institutional characteristics, which together interact with labor supply and the current weak penalty and enforcement regime in the United States. They close with a research agenda for this still-young field, framing noncompliance as an emerging strategy in the reorganization of work and production at the bottom of the U.S. labor market.