The compliance model of employment standards enforcement: an evidence‐based assessment of its efficacy in instances of wage theft

• Author: Mary Gellatly,Eric Tucker,John Grundy,Leah F. Vosko,Rebecca Casey,Andrea M. Noack,Jennifer Mussell,Mark P. Thomas
• Date: 01 May 2017
• DOI: http://doi.org/10.1111/irj.12178
• Published date: 01 May 2017

The compliance model of employment

standards enforcement: an evidence-based

assessment of its efficacy in instances of

wage theft

Leah F. Vosko, John Grundy, Eric Tucker,

Mark P. Thomas, Andrea M. Noack, Rebecca Casey,

Mary Gellatly and Jennifer Mussell

ABSTRACT

This article critically assesses the compliance model of employment standards

enforcement through a study of monetary employment standards violations in

Ontario, Canada. The findings suggest that, in contexts where changes to the organi-

sation of work deepen insecurity for employees, models of enforcement that empha-

sise compliance over deterrence are unlikely to effectively prevent or remedy

employment standards violations.

1 INTRODUCTION

Inadequate employment standards (ES) enforcement is a widely acknowledged policy

problem across jurisdictions. There is growing recognition that the changing nature of

employment fuels precariousness in labour markets and creates an environment in

which employees face greater risk of experiencing ES violations. At the lower end

of the labour market, in industries such as cleaning, food services and accommoda-

tion, the increasing prevalence of sub-contracting and outsourcing further intensifies

competition and makes ES violations a routine strategy of labour cost containment

(Bernhardt et al., 2013; Milkman et al., 2012; Weil, 2010, 2014). The limited resources

available to labour inspectorates (ILO, 2006: para. 370) and the dominance of a reac-

tive, complaint-based enforcement system (Weil and Pyles, 2006) means that only a

small fraction of ES violations are redressed in many jurisdictions.

Some jurisdictions have attempted to buttress workplace protections through the

adoption of reforms to their ES enforcement systems (Amengual and Fine, 2016;

Davidov, 2010; Weil, 2014). Many of these reforms reflect a ‘compliance’model of

enforcement, which entails assumptions about the nature of violations and how

❒Leah F. Vosko, John Grundy, Rebecca Casey and Jennifer Mussell, Department of Political Science,

York University, 4700 Keele Street, Toronto, Ontario M3J 1P3, Canada, Eric Tucker, Osgoode Hall

Law School, York University, Mark P. Thomas, Department of Sociology, York University, Andrea M.

Noack, Department of Sociology, Ryerson University, 350 Victoria Street, Toronto, Ontario Canada,

M5B 2K3 and Mary Gellatly, Parkdale Community Legal Services, 1266 Queen Street West, Toronto,

Ontario M6K 1L3, Canada. Correspondence to: Leah F. Vosko, Department of Political Science, York

University, 4700 Keele Street, Toronto, Ontario, M3J 1P3, Canada; email: lvosko@yorku.ca

Industrial Relations Journal 48:3, 256–273

ISSN 0019-8692

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd

regulation should be implemented. The compliance model presumes violations to be

largely exceptional rather than normal behaviour and due primarily to a lack of

knowledge among regulated parties (Gunningham, 2010). It casts regulated parties

as interested in legal compliance and therefore privileges soft-touch modes of regula-

tion. The compliance model’s conception of violations and the behaviour of regulated

parties diverges sharply from a deterrence model of regulation, which views non-

compliance with the law as often intentional behaviour driven by a cost–benefit calcu-

lus and warranting punishment (Pearce and Tombs, 1990).

This article challenges the theoretical assumptions of the compliance model in ES

enforcement in a context characterised by the growth of precarious employment con-

ditions, such as low rates of unionisation and low income as well as high levels of un-

certainty, through a case study of monetary ES violations

1

—or what is known

colloquially as ‘wage theft’—in Ontario, Canada. As in other jurisdictions, the Gov-

ernment of Ontario’s recent efforts to improve ES enforcement draw heavily from the

compliance paradigm. Among other changes, starting in the mid-2000s, the Ontario

Ministry of Labour (MOL) produced more promotional material for employers

and employees on their respective rights and responsibilities under the Employment

Standards Act (ESA) and made greater use of self-help and settlements to expedite

the resolution of ES problems. Yet an analysis of administrative data on ES enforce-

ment in the province demonstrates how the compliance framework alone is a deficient

model on which to base reforms to workplace regulation. Indeed, the empirical find-

ings offered herein reveal a disjuncture between central premises of the compliance

model and employees’experience of monetary ES violations. Contrary to the compli-

ance model’s emphasis on empowered and cooperative self-regulation, ES complaint

data suggest that imbalances in workplace power constrain the exercise of employee

voice and make seeking legal redress a risky venture for employees. The characteris-

tics of the ES complaints that are investigated and validated by the MOL also suggest

that monetary violations of ES are frequently not the result of ignorance or incompe-

tence on the part of employers. Rather, the relatively large median dollar value asso-

ciated with monetary violations, and the low rates of recovery of MOL-issued

monetary orders, point towards the intentionality of violations and employer recalci-

trance in the enforcement process. Findings from this Ontario-based case study

thereby suggest that, in contexts where changes to the organisation of work deepen

insecurity for employees and augment employer power, models of enforcement that

emphasise compliance over deterrence are unlikely to effectively prevent or remedy

ES violations and can exacerbate regulatory degradation (Tombs and Whyte,

2013a). Effective workplace regulation that helps pre-empt ES violations requires

enforcement models that start from a dual recognition of workplace power imbal-

ances and the likelihood that many violations are intentional.

The remainder of this article proceeds in three parts. Section 2 defines the features

of a compliance model of enforcement and the related notion of the enforcement pyr-

amid, contrasting it to more deterrence oriented approaches. Turning to the empirical

analysis, Section 3 describes the dominance of a compliance orientation in the en-

forcement of the Ontario ESA with attention to the case of monetary ES violations.

Against this backdrop, it provides a profile of the reporting behaviour of complain-

ants and features of complaints that run counter to the image of mutual interest

1

Monetary ES violations refer to the phenomenon of employees not being paid the wages and other mon-

etary benefits to which they are legally entitled.

257The compliance model of ES enforcement

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd