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More funding needed to combat local wage theft, report says
by Cody Wright
Percentage of minimum wage complaints filed with the OLSE by industry (2004-2013). Source: San Francisco Wage Theft Task Force Final Report 2013. Graphic by Sara Bloomberg/Bay News Rising
What’s worse than working for low wages? Finding out after the fact that you’ve been working for free.
By 2012, reports of wage theft had become so egregious that the San Francisco Board of Supervisors unanimously ordered a task force to probe the problem and prescribe remedies. Now, a report by the task force pounds the board for doing too little for too long.
As many as two-thirds of workers have been victimized by pay violations, the 37-page report says, which may include employers failing to pay for all the hours worked, withholding overtime pay, making illegal deductions from paychecks, misclassifying employees as independent contractors, and, in some cases, stiffing them entirely.
At particular risk are recent immigrants who fear deportation, speak little English and understand even less about their rights as workers, the report says.
Studies bear this out. In one undertaken by the National Employment Law Project, more than three-quarters of immigrant employees said they had been underpaid or not paid at all for work done in the preceding week.
And a 2011 report by the Chinese Progressive Association focusing on Chinatown restaurants found that one out of every two workers was paid less than the minimum wage.
“All workers are protected under California Labor Laws, regardless of immigration status,” said Josue Arguelles of Young Workers United, an advocacy organization.
Federal law also mandates minimum wage, regular breaks and overtime pay.
But, “laws are only as strong as their enforcement,” said Donna Levitt, division manager at the City of San Francisco’s Office of Labor Standards and Enforcement, which is tasked with enforcing legislation passed by the city’s voters. And the office has its hands full.
Since San Francisco’s Minimum Wage Law took effect in 2004, the office has regained $6.5 million from employers across San Francisco. Last year, it secured $525,000 in back wages and penalties from Dick Lee Pastry—the largest wage theft case in the city’s history.
“San Francisco has led the way in enforcement and minimum wage,” said Shaw San Liu, lead organizer at the Chinese Progressive Association, a nonprofit organization that advocates for working-class newcomers.
The enforcement office “is unique to San Francisco,” he said. “Workers need to know their rights to be able to enforce them.”
With only five full-time enforcement officers working to recoup lost wages, a backlog is building.
The supervisors voted last week to implement only one of the task force’s recommendations in the city’s final budget: a $170,000 funding increase to come from the city’s general fund for this and the following fiscal year—enough to pay for one additional enforcement officer.
The task force identified at least five positions that need to be filled.
Task force findings
Made up of worker advocates, city departments and business owners, the task force’s 2013 report said the Office of Labor Standards and Enforcement lacked the resources to carry out its mission.
The city should increase funding to the enforcement office and fill all vacant staff positions immediately, as well as revoke or suspend city permits for employers who are found non-compliant with labor laws, the report said.
In addition to hurting San Franciscans who already struggle to earn a living, wage theft punishes law abiding businesses by creating unfair competition and costs the city plenty in tax dollars, the report also said.
Effects of minimum wage increase unknown
Passage of the Minimum Wage Act of 2014 is likely in November. According to a poll obtained by the Chronicle, nearly 60 percent of people polled support the increase from its current $10.74 an hour.
What effect will a higher minimum wage have on wage theft? Labor and enforcement officials suggested it could lead to a spike in violations.
“I think that OLSE audits will find significantly larger amounts of back wages owed,” Levitt said. “But I have no basis to predict the number of complaints we will receive.”
The exact number of wage violation in San Francisco is unknown, but the city and the labor and enforcement agency is hoping their efforts are having preventive effects.
“Employers will always find a way to skirt the law,” Liu said. “But we want workers to come together. We are about the education, awareness and the empowerment of workers.”
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