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First wage theft complaints filed in Houston

I hope these workers get the justice they seek.

For three years Erik Lopez and his three brothers say they each often worked 80-hour weeks, building highway ramps and trash landfills for city projects.

Yet they say their employer refused to pay them overtime. Nor did the company provide tax forms, such as a W-2, instead giving them cash or personal checks so the brothers couldn’t pay their taxes – and stayed off the company’s books.

“(My boss) would tell me it didn’t really suit him to pay me overtime,” said Lopez, 30, a native of Guerrero state in Mexico, who came to Houston 14 years ago seeking work. “I worked all the time, but we struggled paying our bills.”

It was not until he heard about Houston’s wage theft ordinance, passed last November, that he realized he had some recourse. With the assistance of the nonprofit Faith and Justice Worker Center, Lopez and 12 others on Tuesday became the first to file a complaint under that law, saying they’re collectively owed more than $200,000 in unpaid wages for work performed for sub-contractors on city-funded sites.

[…]

Yet workers most affected by rogue employers are often those too afraid to complain. Jose Santa Cruz, a 33-year-old father of two from Michoacán, Mexico, said his employer didn’t provide safety equipment and threatened to call Immigration and Customs Enforcement if his workers reported violations.

Finally, when the boss said he might stick employees with the bill for broken heavy machinery, Santa Cruz just didn’t come back.

Now he said his employer owes him more than $900 in wages and he’s yet to find steady work. “I’m counting on some friends to pay the bills,” he said.

About half of all construction workers in Texas are foreign-born, many of them lacking work authorization, according to a 2013 survey led by the Workers Defense Project.

Researchers found more than 20 percent of Texas workers say they were denied payment for their construction work and 50 percent reported not being paid overtime.

See here, here, and here for the background. The city ordinance isn’t about enforcement per se, it’s about barring firms that have had wage theft complaints enforced against them from doing business with the city. The workers themselves are generally left to pursue the complaints. What isn’t discussed is what the penalties are for committing wage theft. These are usually treated as civil offenses, and as Catherine Rampell documents, the problems are widespread and involve much bigger players than construction firms.

In the past few weeks, New York Attorney General Eric Schneiderman extracted settlements from dozens of McDonald’s and Domino’s locations around the state for off-the-clock work. Last month, workers in California, Michigan and New York filed class-action lawsuits against McDonald’s alleging multiple charges of wage theft. These suits have upped the ante by implicating the McDonald’s corporation, not just individual franchisees, in bad behavior. The plaintiffs allege that McDonald’s corporate office exerts so much control over franchisees — including by monitoring their hourly labor costs through a corporate computer system — that it had to have known what was going on.

“It doesn’t take a company dictating the specific method for violating the law in order to obtain those violations,” Michael Rubin, an attorney with Altshuler Berzon LLP who filed the California suits, told me. “If you keep coming with this directive that labor costs must be lowered, there are only a finite number of ways that can be done, most of which are unlawful. The lawful ways get exhausted quickly.” (McDonald’s said in a statement that it is “undertaking a comprehensive investigation of the allegations.”)

These cases aside, wage theft mostly goes unreported. Workers who do report the stolen wages to authorities — lately, at the urging of national labor campaigns such as Good Jobs Nation — can wait months before an investigation is resolved, even though they probably need the missing money to pay their next electricity bill. (This has been the case with fast-food workers employed by government contractors at the Ronald Reagan Building and International Trade Center, who filed a wage-theft complaint with the Labor Department last summer.) The consequences for wage theft are rare, small and not particularly deterring. Even when government investigators pursue these complaints, for example, criminal charges are rarely filed.

Harsher penalties, including prison time, should be on the table more often when willful wrongdoing is proved. Thieves caught stealing thousands of dollars from someone’s home can go to jail; the same should be true for thieves caught stealing thousands of dollars from someone’s paycheck.

Can you even imagine our Attorney General filing lawsuits and pursuing these complaints against corporations? I know, right? Greg Abbott would be in court arguing that the workers have no right to sue and that the companies are immune to such lawsuits in Texas. Such amusing thoughts aside, it’s a good question why complaints like these aren’t generally punished with jail time. I mean, if someone reached into your bank account and took a week’s pay from you, you’d call that theft and would consider jail time to be a possibility for the thief. How is this any different? It’s a disgrace that this happens to anyone. As a society, we should not tolerate it and we should take all reasonable steps to prevent and punish it.

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One Comment

  1. The Dude says:

    This sounds fishy, there needs to be an audit or inspector general review. If these were city projects for 14 years why didn’t anyone that does contract compliance and payroll audits on city construction contracts catch this? And, why didn’t any of the federal auditors for city projects funded by federal dollars catch this?

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