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wage theft

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.

Council passes wage theft ordinance

Well done.

Houston City Council voted unanimously Wednesday to adopt an ordinance aimed at deterring companies from stealing workers’ wages and ensuring the city does not hire firms that do, though supporters acknowledged the measure’s limited reach.

The seemingly easy vote masked months of lobbying and negotiations among Mayor Annise Parker’s administration, council members, workers rights groups and business organizations. The item was pulled from last week’s agenda for some final tweaks in talks with lobbyists for builders, contractors, restaurateurs, building owners and hotel operators.

[…]

Laura Perez-Boston, director of the nonprofit Faith and Justice Worker Center, flooded the chamber with supporters each time the item came up, citing statistics: 100 daily wage theft complaints in the Houston area; $750 million in local wages lost annually to the practice.

“It’s certainly not everything we would want, but I do think it is a substantial step in the right direction,” she said. “And although you may see there aren’t a lot of main contractors that are found guilty of wage theft, there are a lot of subcontractors.”

Joshua Sanders, a spokesman for the trade groups, said the law strikes a balance in that it has teeth but avoids duplicating existing processes. He rejected the idea that the draft had been hollowed out via negotiations.

“What they did with this ordinance was to say, ‘We’re one of the largest employers in Houston, we’ve got a policy now that allows us to scrutinize and penalize and refuse to do business with individuals who’ve been convicted of wage theft,’ ” Sanders said. “They’re taking this position as an employer and they’re setting a standard and an example.”

See here, here, and here for the background. As Texpatriate noted, CM Helena Brown was absent, so don’t read too much into the fact that it passed unanimously. There’s certainly room for improvement in this ordinance, since it only affects a firm that has been convicted of wage theft and has exhausted all its appeals, but just having this ordinance is a big step forward. I would like to see the matter revisited before the end of Mayor Parker’s next term to ensure that the law has had the intended effect and to strengthen it if needed. But the first step is always the hardest, and getting this on the books is a big deal. Kudos all around. PDiddie has more.

Wage theft ordinance back before Council

It should be up for discussion this week.

“Wage theft is defined as a situation in which someone employs someone to perform a service, not intending to pay them wages. That’s an extreme offense,” [City Attorney David] Feldman said. “The city has an interest in knowing if that type of conduct is taking place under a public contract. That’s one reason why this ordinance affords a process for that kind of complaint to be brought directly to the city.”

Workers who believe they have been improperly denied pay can file civil complaints with the Texas Workforce Commission or in court, or pursue criminal complaints with police and prosecutors. Most workers choose the state agency, but Feldman said that the process is hopelessly slow.

A coalition of builders, contractors, restaurateurs, building owners and hotel operators has argued that existing civil and criminal processes should take priority, particularly since the proposed city ordinance levies sanctions only after existing remedies are exhausted. Coalition member Joshua Sanders, executive director of developer-led Houstonians for Responsible Growth, said city involvement in fielding wage theft filings could result in companies being unfairly snubbed if complaints later prove to be without merit. However, Sanders said, the trade groups are open to further discussions.

“We are not supportive of wage theft. The city should set an example in not doing business with these types of individuals,” Sanders said. “But we don’t want a process set up to where individuals can go shame businesses by filing unmeritorious complaints. There’s a system in place that supersedes the city and our ordinances, and there are processes in place there that are effective and work.”

[…]

The proposal would bar the city from hiring people or firms that had been assessed civil penalties or judgments related to wage theft or that have been criminally convicted of the offense, provided all appeals are exhausted. Those with final criminal wage theft convictions also would be denied 46 types of city permits and licenses for five years. Feldman has said criminal wage theft convictions are rare.

See here for the previous entry – this ordinance was first proposed in July – and here for some background on the issue. There’s not a lot of detail in the story so I’m not sure what the point of contention is. I hope we all agree that people should be paid the wages they were promised without any subsequent conditions, and that the city should not do business with anyone that rips off its workers in this fashion. Assuming we are in fact all on board with that, then we should be able to work out the details of how to enforce it. If anyone is not in agreement with this, then I look forward to hearing what their arguments are, because I’m having a hard time imagining what they could be. Stace has more.

What’s on the agenda for Mayor Parker in her third term

Now that Mayor Parker has been safely re-elected, with a better-than-expected margin, what does she plan to do from here?

Mayor Annise Parker

Mayor Annise Parker

A triumphant Parker on Tuesday lauded her “decisive” victory but quickly shifted her focus to the coming two years, listing her third-term priorities as jobs, economic development, rebuilding streets and drainage, and financial accountability.

“There are no quick fixes. We’re rebuilding Houston for the decades, and we’re doing it right,” she said. “My election is over, but the work is going to get much tougher. … The next two years starts tonight.”

Parker had said for weeks she expected to avoid a runoff, and lately has acted the part, saying Monday she intended immediately to place controversial items before the City Council.

An ordinance targeting wage theft should be on the Nov. 13 agenda, she said, with a measure restricting payday and auto title lenders shortly to follow. Both items were discussed by council committees earlier this year before disappearing in favor of bland agendas during the campaign.

The council also should vote on a controversial item rewriting regulations for food trucks before year’s end, Parker said.

She said she also wants to pass a nondiscrimination ordinance similar to an item recently passed in San Antonio that prohibited bias against gay and transgender residents in city employment, contracting and appointments, and in housing and places of public accommodation.

Parker also has said she wants to expand curbside recycling service to every home in Houston, to finish an effort to reduce chronic homelessness, and to give Houston voters a chance to change the city’s term-limits structure, likely from three two-year terms to two four-year terms. She singled out homelessness and the Bayou Greenways initiative, a voter-approved effort to string trails along all the city’s bayous, Tuesday night.

Parker also has highlighted pending projects: the city is halfway through moving its crime lab from the Houston Police Department to an independent lab; voters’ narrow approval of a joint city-county inmate processing center on Tuesday will let the city shutter its two aging jails.

The mayor twice has failed to persuade the Texas Legislature to give her local negotiating authority with the city’s firefighter pension system; she will get another crack at it in 2015.

Another reform Parker said she wants to tackle is increasing water conservation in Houston, saying “we are one of the most profligate users of water of any city in Texas, and that has to change.”

A lot of this should be familiar. The wage theft ordinance was brought up in August to a skeptical Council committee, and the Mayor promised to bring it up on October 23. Payday lending is a to do items due to legislative inaction. The call for a more comprehensive non-discrimination ordinance was a recent addition that came in the wake of San Antonio passing its more muscular NDO. The crime lab and closure of the city jails are long-term projects that will move forward. It will be interesting to see where Council is on some of these, and it may be better for a couple of them to wait until the runoffs resolve themselves and bring them up next year. Finally, on the subject of water usage, there’s a lot we could do to affect that.

The one cautionary note I would strike is on term limits. You know how I feel about term limits, so I’m not going to go into that. My concern is that this necessarily means a change to the city charter, and that implies the possibility of a larger can of worms being opened. Which, maybe Mayor Parker would welcome, I don’t know. I personally have a hard time shaking the feeling that the goal of this exercise is to curtail the power of the Mayor one way or another – I have a hard time seeing us move to a City Manager form of government, but things like giving Council members the power to propose agenda items are in play. Which, again, may be something the Mayor wants to discuss, and even if it isn’t may be a good thing for the rest of us to talk about. I’ve said I’m open to the conversation, and I am. Doesn’t mean I’m not thinking about the possible ways it could go.

One more thing:

Parker said Tuesday she would not be a candidate for any office in 2016.

That was made in the context of speculation that the Mayor’s current agenda for Council might presage a run for statewide office. I don’t know what the Mayor’s plans are for life post-Mayorship, but I can say with a reasonable degree of confidence that of course she wouldn’t be a candidate for office in 2016. What office would she run for? The only statewide positions are Railroad Commissioner and judicial seats, and unless she wants to move out west and run against Steve Radack, the only county office that might fit would be Tax Assessor. The question to ask is whether she might be a candidate for office in 2018, and even I would have to admit that’s way too far off to really care about right now. Let’s see how these next two years go, and we’ll figure it out from there.

Council to consider wage theft ordinance

Good.

The Houston City Council may step up its efforts to combat wage theft, sanctioning companies that deny workers pay to which they are entitled and monitoring firms accused of doing so, regardless of whether they do business with the city.

City Attorney David Feldman laid out a proposed ordinance to a City Council committee on Tuesday, receiving a generally positive reaction from council members and worker advocates, who flooded the chamber in yellow or teal T-shirts, representing the Fe y Justicia Worker Center and Texas Organizing Project.

Workers who believe they have been improperly denied pay can file civil complaints with the Texas Workforce Commission or in a justice of the peace court, or pursue criminal complaints with police or prosecutors. Feldman said most workers who file complaints choose the state agency.

The city’s best chance to help, Feldman said, is to create a database of companies found guilty of wage theft and to keep a watch list of firms accused of the practice, in the hopes of using its leverage as a source of contracts, permits and licenses as a deterrent.

“Obviously, we do have a large amount of buying power, purchasing power, a large number of contracts, and, obviously, we want to make sure the city of Houston says, ‘We’re not going to be doing business with somebody that’s found to be guilty of this type of activity,'” Councilman Ed Gonzalez said.

Existing city rules state that firms who commit wage theft can be barred from city work, but do not specify how the city would identify offending companies, Feldman said.

Stace was on this earlier and then again afterward. This is a very basic premise: People who do work deserve to get paid for it, and they deserve to get paid what they were promised, without delays or extra conditions or any other BS. Denying someone the pay they were promised is wrong and should carry consequences. This has been a huge national problem lately, and it’s a disgrace. What was especially encouraging about this proposal was the overwhelming agreement that this ordinance would do good. It’s a shame that it’s needed, but it will be good to have it. Contact your Council member and let him or her know that you support this, too.

Wage theft

Any employer that would do this is scum.

[Wage theft] reflects a changing economy in which low-wage work has increased, more companies try to cut labor costs to stay afloat in a sour business climate, and fewer workers belong to unions that might protect them. At the same time, budget-cutting state and federal governments do not enforce wage laws as aggressively as they once did.

Wage theft can be as simple as stealing tips from restaurant servers, illegal deductions from a worker’s paycheck or failing to pay overtime or the legal minimum wage. It also can take other forms, such as classifying workers as “independent contractors” to avoid paying unemployment insurance.

Millions of workers are losing pay, with the majority in low-income service industries such as fast food, domestic work, agriculture, retail, hotel and tourism, and home health care. It’s also a big problem in the warehousing and construction industries, which employ large numbers of recent immigrants and undocumented workers, who are reluctant to complain, fearing scrutiny of their immigration status.

[…]

Nearly two out of three low-wage workers experienced some form of wage theft each week, according to a 2009 survey of 4,400 low-wage workers in Chicago, Los Angeles and New York. On average, these workers lost $51 a week in unpaid earnings, the survey found.

The lost wages add up. Workers in Houston lose more than $753 million a year, according to a recent study.

The U.S. Department of Labor, which monitors compliance with federal wage laws on behalf of more than 130 million workers, has only 1,000 enforcement agents. State wage-and-hour investigators are equally scarce in the wake of massive budget cuts.

Last year, Texas lawmakers closed a loophole that let employers escape prosecution if they pay workers only a portion of the wages they’re owed.

You can find that study here, and a writeup about it and related matters at The Nation. Imagine if your boss could get away with paying you less than you’re owed. Imagine if you had no good recourse to get the wages you’re supposed to get. That would suck, wouldn’t it? Meanwhile, in related news here in Houston, janitors who are fighting for a living wage have been illegally barred from their jobs after staging a one-day walkout to highlight the fact that the average janitor in this town gets paid about $9,000 a year. How much would you have to be paid to do that kind of hard, dirty work? I’ll bet you won’t find any management types stepping in to do those jobs in the event of a protracted dispute. See here and here for more. If we can’t do right by the people who clean up after us, how can we do right at all?