Local Coalition Responds to Trump Administration by Stepping up Efforts to Fight Wage Theft

By Paul Burton, San Mateo Labor Editor

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.

Tina Sandoval joined Fight for $15 campaign to challenge “wage theft” at fast food restaurants

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.

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.

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 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.

Wage Coalition is using text messaging to educate low-wage workers about their rights under the new minimum wage law.

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.

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 workers they will 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 StopWageTheftCA.org, 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.

StopWageTheftCA.org 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.

Ken Jacobs of the UC Berkeley Labor Center calls for more local-state coordination.

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.


Minimum Wage Rises on January 1st

Low-wage workers in the City of San Mateo, and in other cities in the San Francisco Bay Area, see a big boost in their pay checks beginning on January 1, 2017, when the city’s minimum wage hits $12 an hour. The state minimum wage also goes up, but only to $10.50 an hour.

Raise the Wage – San Mateo, the labor-community coalition that led the successful campaign for the wage hike, is working with advocates from around the San Francisco Bay Area to fight “wage theft” that robs workers of the pay they have earned.

Workers can also contact the Raise the Wage Coalition directly for free and confidential information by texting “wages” to 1.650.235.4969.

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, 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.

The City of San Mateo has posted information about the new minimum wage ordinance on its website. The city is distributing a Frequently Asked Questions flyer (FAQs  | FAQs en Español) that summarizes the new regulation, and an Informational Flyer y en español.


San Mateo County Enacts “Living Wage” Ordinance

LivWage2Low-wage employees of contractors who provide services to San Mateo County will see their pay rise to $17 per hour, under the county’s new Living Wage Ordinance. The ordinance goes into effect January 1, 2017, when wages rise to $14 an hour, with a second hike to $15 an hour six months later; a third raise to $16 on July 1, 2018; before hitting $17 an hour on July 1, 2019.

While the Living Wage Ordinance covers all businesses that provide services to the county, Supervisor Carole Groom highlighted the work of nonprofit contractors in her remarks at the October 18th Board meeting.

“We value the contribution of employees of our nonprofits who perform services to the county,” such as substance abuse counseling, mental health and health care services. Groom added, “These nonprofit agencies will have an easier time recruiting and retaining employees.”

The Raise the Wage Coalition, led by the San Mateo Labor Council and the SMC Union Community Alliance, pressed county supervisors for an ordinance to ensure that when the county contracts with an outside business for services that these taxpayer dollars were not creating poverty-level jobs. The coalition argued that a single adult living in San Mateo County would need to earn at least $17 an hour to cover just the basic costs of living — housing, food, transportation and health care.

The Board of Supervisors responded by establishing a committee, chaired by Supervisors Groom and Dave Pine, to study the issue. San Mateo Labor Council Director of Community Services Rayna Lehman and representatives of the county’s nonprofit contract agencies served on the committee, which met during the winter and spring of 2016.

With the adoption of the Living Wage Ordinance, Lehman said, “The county is working to address income inequality. We are excited to work in partnership with the county as it implements and enforces the new ordinance.”

The Raise the Wage Coalition will continue to monitor the implementation of the ordinance to ensure there are no unintended consequences. Specifically, if the county does not provide sufficient funding to its nonprofit contractors, these agencies might be forced to cut services or staff in order to finance the higher salaries.

The county will increase its contracts with nonprofit agencies by $4.2 million over the next two years to fund higher staff salaries.

While county staff incorporated a number of improvements in the final ordinance, based on comments from the wage coalition and its nonprofit agencies, in a letter to the Board of Supervisors, the coalition raised a number of concerns involving the ordinance’s implementation:

  • The County should fully fund the costs of the living wage to ensure the ordinance does not result in cuts in staff or services at nonprofit agencies;
  • Annual reviews of the ordinance’s effectiveness should include any investigations, audits, and enforcement actions taken to ensure compliance; and requests for exemptions and for budget enhancements; and
  • The County should conduct random payroll audits of its contractors to ensure compliance, rather than solely relying on employee complaints.

City of San Mateo Publishes New Minimum Wage Regulations

mwo-officialnoticeThe City of San Mateo has established a web page with a summary of the regulations related to the city’s new Minimum Wage Ordinance. The City Council voted in August, 2016, to raise the minimum wage to $12 beginning January 1, 2017, $13.50 on January 1, 2018, and $15 on January 1, 2019. Thereafter, the city will adjust the minimum wage to keep up with inflation.

All businesses are covered by the minimum wage, though nonprofit organizations operating in the city have an additional year to reach the new wage levels.

The City website, www.cityofsanmateo.org/minimumwage, includes the official notice of the wage increase that employers are required to post in the workplace, a summary of what the ordinance means for both employers and employees, and frequently asked questions. All material is available in English, Spanish and Chinese.

Members of the Raise the Wage Coalition after the July San Mateo City Council hearing.

Members of the Raise the Wage Coalition after the July San Mateo City Council hearing.

A labor, faith and community groups came together as the Raise the Wage Coalition to advocate for a hike in the minimum wage. The City Council acted after conducting research on the economic and public health impacts of a minimum wage hike, surveying local businesses and holding community meetings, and holding public hearings on the issue.

While more than a dozen cities in the Bay Area have raised the minimum wage, from San Jose, Santa Clara, and Mountain View in Santa Clara County, Berkeley, Oakland and Emeryville in Alameda County, Richmond and El Cerrito in Contra Costa County, and San Francisco,  San Mateo City Council is the council to enact an ordinance in San Mateo County.

California’s $15 Minimum Wage Earthquake!

Editor’s Note: This article, authored by Martin J. Bennett of North Bay Jobs with Justice,  first appeared at Beyond Chron.

Workers rally in Sacramento in support of a $15 minimum wage.

Workers rally in Sacramento in support of a $15 minimum wage. Photo: Bradley Cleveland

Governor Jerry Brown recently signed legislation boosting California’s minimum wage from $10 to $15 an hour — a 50 percent increase that made the state’s minimum wage the highest in the nation. The hike will be phased in over six years, then automatically adjusted annually to offset rising costs of living.

According to the UC Berkeley Labor Center, affected workers will receive on average one quarter more in wages, or about $3,700 per year adjusted for inflation. An estimated 96 percent receiving pay raises are adults over 20, and on average they contribute more than half of their family income. More than half are women and Latinos.

The new California minimum is historic – it’s the largest increase in the state’s history affecting more than one third of the state’s workforce, or about 5.6 million workers.

The Governor told the Sacramento Bee at the bill-signing ceremony in April that the legislation “is about economic justice” and “the work of many hands and many minds and many hearts.” Read more

San Mateo Working Families Win Major Victories

The Raise the Wage Coalition has scored its first victory in San Mateo County. On August 15, by a 4-1 vote, the San Mateo City Council adopted the first minimum wage increase in the County. Low-wage workers will see their wages go up to $12 dollars starting in January 2017, $13.50 in 2018, and $15 in 2019. Subsequent annual increases will be adjusted according to the Consumer Price Index for the Bay Area region. Nonprofits will have an extra year to adjust to the changes.

But the adoption of a higher minimum wage was not the only victory for San Mateo working families. The Council also voted to move ahead toward adoption of a commercial linkage fee to raise revenues for affordable housing development. The ordinance includes an incentive for developers to pay area standard wages to construction workers. The second reading of the ordinance is planned for September 6, and if adopted, the City will be able to collect close to $3 million dollars for the development of affordable housing. Foster City also had its first study session on the impact fees and their process is moving forward.

And if adopting a higher minimum wage and raising affordable housing funds were not enough items for one night, the Council took on the discussion of renters’ protections. The San Mateo County Association of Realtors (SAMCAR) has been lobbying the Council to derail, delay, or entirely stop the rent stabilization ballot initiative that was put on the ballot by San Mateo residents, who collected close to 11,000 signatures. But SAMCAR failed once again. The Council voted 3-1-1 to not write an opposition argument on the ballot initiative and to allow the democratic process takes its course.

Activists, some who stayed past midnight, left the chamber with big smiles on their faces. It is not often that we get to celebrate so many victories in one single night. What is even more promising is that San Mateo is just the start. Labor and community-based organizations will continue to move a progressive multi-issue agenda across the county. The affordability crisis is energizing progressive organizations to work together strategically to improve the standard of living for all working families, and we are excited about all of the opportunities on the horizon.

San Mateo City Council Votes Unanimously to Raise the Wage

A longer version of this article, written by Paul Burton, appears in the August 2016 edition of San Mateo Labor

Over two dozen supporters of a minimum wage hike attended the July 18th hearing

Over two dozen supporters of a minimum wage hike attended the July 18th hearing

After over 18 months of work, the Raise the Wage Coalition scored a major victory July 18 when the San Mateo City Council moved to raise the minimum wage to $15 by January 2019. If the ordinance passes at its second reading in August, the first wage hike — to $12 — will go into effect January 1, 2017, with two additional raises of $1.50 an hour in 2018 and 2019. Beginning in January 2020, the minimum wage will rise based on the increase in the metropolitan region’s Consumer Price Index.

Read more

San Mateo City Council to adopt $15 minimum wage on July 18th

Press Advisory

Where: San Mateo City Hall, 330 West 20th Avenue, San Mateo

When: Monday, July 18th, 2016, 7 p.m.

For more info: Bradley Cleveland, 510.967.1066, bfcleveland@gmail.com

City Council considers two options: $15 by 2018 or $15 by 2019

The San Mateo City Council will vote to adopt a local minimum wage ordinance at its July 18th meeting. The City Council passed the first reading of an ordinance to raise the minimum wage to $15 by 2018 for large business, those with more than 55 employees, at its June 6th meeting; smaller businesses and nonprofit organizations would have two additional years to reach $15.

At the July 18th meeting, the City Council also will reconsider a second option, first proposed by Councilmember Rick Bonilla at the June 6th meeting, that would increase the minimum wage to $15 by 2019 for all businesses operating in the city. Nonprofits would be required to pay its employees $15 by 2020. Read more

Effects of a $15 Minimum Wage by 2019 in San Jose

The San Mateo City Council will vote on the adoption of a $15 minimum wage ordinance at their July 18th, 2016 meeting. To understand the likely impact of a $15 minimum wage, we publish the  following analysis of  the impact of such a wage increase for San José. Authors Michael Reich, Claire Montialoux, Annette Bernhardt, Sylvia A. Allegretto, Sarah Thomason and Ken Jacobs of the UC Berkeley Center for Wage and Employment Dynamics wrote the policy brief at the request of the City of San José. The full policy brief is available from the UC Berkeley Labor Center.

Critics of minimum wage increases often cite factors that will reduce employment, such as automation or reduced sales, as firms raise prices to recoup their increased costs. Advocates often argue that better-paid workers are less likely to quit and will be more productive, and that a minimum wage increase positively affects jobs and economic output as workers can increase their consumer spending. Here we take into account all of these often competing factors to assess the net effects of the policy. Read more

Effects of the Minimum Wage on Infant Health

HealthyBabyThe minimum wage has increased in multiple states over the past three decades. Research has focused on effects on labor supply, but very little is known about how the minimum wage affects health, including children’s health.

What follows is an excerpt from a paper, published by the National Bureau of Economic Research, that links a higher minimum wage to improved health outcomes for infants, specifically increase in birth weights driven by increased gestational length and fetal growth rate. 

The Working Paper is available from the National Bureau of Economic Research.

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