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Labor Council

Regional Coalition Stepping up Efforts to Fight Wage Theft

Feb. 2017

A coalition of organizations, many of which led campaigns to raise the minimum wage in Bay Area cities, are stepping up their efforts to enforce local wage laws and to fight “wage theft” that robs workers of the pay they have earned.

At a press conference in Oakland January 5, advocates and low-wage workers talked about the need for minimum wage laws to be enforced so all workers, whether or not they are legally authorized to work in the United States, are paid for their labor.

McDonald’s worker Tina Sandoval, an activist in the Fight for $15 movement, said workers at McDonald’s had won a settlement from the fast food giant for wage theft. “Whatever our legal status, it is not OK to take away the money we have earned,” she said.

wage theft

Fast food worker Rico Johnson.

Fast food worker Rico Johnson, also active in the Fight for $15, said, “Greedy corporations feel they can deny our wages and our wage increases. It makes the idea of achieving the American Dream a fallacy and leads to misery for workers. We deserve $15 and a union now, and greedy corporations deserve to be shut down if they deny us our earnings.”

Derek Schoonmaker of Centro Legal said community outreach and educating workers about their rights is an important part of making sure workers’ wages are paid. He said his organization represented insulation installers who had health issues due to exposure to hazardous materials but who feared coming forward to file complaints. “It takes community support and organizations for workers to feel safe about coming forward as they face real threats and retaliation from employers,”

Schoonmaker said. He pointed out that after Oakland voters passed a local minimum wage and sick leave law, the city council also set aside funding for community-based organizations to help workers protect their rights, file claims, and pursue remedies. “Oakland’s program borrowed from the successful programs in San Francisco and Seattle, because workers may be reluctant to go to a government entity but will go to a non-profit organization for help,” he said.

Bradley Cleveland from the Raise the Wage–San Mateo coalition and the San Mateo County Union Community Alliance said after last year’s successful campaign to raise the minimum wage in San Mateo, “This year we will focus on enforcing wage laws, because with a new administration in Washington, we don’t think the Department of Labor will enforce minimum wage laws.” With the nomination of a Fast Food executive to lead the U.S. Department of Labor, low-wage workers will depend on local and state agencies to investigate wage claims and enforce wage laws, he said. The San Mateo County Union Community Alliance is a nonprofit affiliate of the San Mateo Labor Council.

Minimum wage workers across the Bay Area saw pay increases of 20 percent or more take effect January 1, when the wage floor in a dozen cities rose to at least $12 an hour. The state minimum wage only rose 5 percent, from $10 to $10.50 an hour, and only increased for employers with 26 employees or more. Cleveland noted that workers often do not see these increases due to the persistent problem of wage theft. Wage theft occurs when employers underpay their workers, deny them legally required breaks, fail to pay overtime, force employees to work “off the clock,” misclassify employees as independent contractors, or fail to make required tax and insurance contributions, among other illegal practices. Wage theft is most common in labor intensive industries that pay by the hour—the restaurant industry, construction, and janitorial services—and most prevalent among immigrant workers. “We want to combat wage theft and ensure immigrant workerswill be protected,” Cleveland said.

The U.S. Department of Labor in the Obama Administration has played a key role battling wage theft nationally. In 2016, its Wage and Hour Division investigated 5,000 cases in the food services industry—recovering almost $40 million in back wages for 44,700 affected employees. In the construction industry, the Division investigated over 3,200 cases, winning $41.7 million for almost 27,000 workers.

Cesar Sanchez, a labor compliance investigator with, said wage theft cost California taxpayers $1.2 billion in lost wages and $774 million in lost tax revenue. “Every one of us is impacted by wage theft,” he said. is a project of Smart Cities Prevail, a construction industry organization that works to build public awareness of the impact wage theft has on the construction industry and the economy. The project provides tools for policy makers, employers, workers and the public that promote enhanced enforcement of state labor laws and prevention of wage theft on public works and multi-unit housing projects.

Sanchez said without local enforcement of wage laws, some contractors take advantage of workers. “Shady contractors can just declare bankruptcy and shift ownership under new names,” he said. The cities of San Jose and Berkeley have enacted strong wage theft prevention ordinances that deny permits or licenses to contractors engaging in fraud or violating wage laws.

Berkeley’s wage theft prevention ordinance notes that the “Deputy Labor Commissioner conducted 985 inspections in the private construction industry in 2012-13, yielding 595 citations that assessed $5.3 million in penalties. Enforcement actions, however, are dwarfed by the number of contractors and projects. Over 300,000 state-licensed contractors performed about $48 billion worth of private construction work in the state in 2014. The mismatch between the resources of the state and the scope of the issue of fundamental wage protections through disclosure and transparency requires the involvement of local government police powers.”

“We need government, labor, and the community to stand together,” Sanchez said.

Ken Jacobs, Chair, UC Berkeley Labor Center.

Ken Jacobs, Chair, UC Berkeley Labor Center, said cities and the state of California need to work together. He said 15 cities increased wages but studies show one in three minimum wage workers were victims of wage violations. Jacobs said while the state has a strong Office of Labor Standards Enforcement (OLSE), more needs to be done. He outlined some of the best practices for ensuring workers are fully paid for their work. He said education and outreach are important to make workers aware of their legal rights, and enforcement of wage laws needs to be pro-active. “Minimum wage workers are a vulnerable population and are less likely to speak up and complain,” he said. Jacobs said San Francisco’s OLSE audits compliance, targeting industries known for wage theft. He added that enforcing agencies need to be staffed and cities need to work with local organizations that have connections in their communities.

The Wage Coalition in San Mateo is using text messaging to spread the word about the new minimum wage. Workers who text “wages” or “salario” to 650-235-4969 will receive information—in English and Spanish—about the law and how to enforce their rights.

- Paul Burton











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