Every day in Pasadena — and in almost every city in America — employers steal their workers’ wages. They force employees to work off the clock. They fail to pay legally required overtime. They steal workers’ tips. They pay employees by the “piece” of work, which rarely adds up to the hourly minimum wage. They hire a husband and wife to do a job together but only pay them for the work of one employee. They hand workers an envelope that has less money than they promised to pay. Or they simply refuse to pay workers at all.
Wage theft is a crime that costs American workers billions of dollars every year. The problem is so widespread that there are currently two bills in Congress — the Wage Theft Prevention and Wage Recovery Act (sponsored by Sen. Patty Murray and Rep. Rosa DeLauro) and the Pay Stub Disclosure Act (sponsored by Sen. Al Franken and Rep. Bobby Scott) — designed to address this issue. In Los Angeles alone, a recent UCLA study found that every week low-wage workers in the city lose $26.2 million to wage theft. The UCLA researchers discovered that even when the state Labor Commission or courts found that an employer had committed wage theft, half of them never paid back any wages. In fact, 83 percent of workers who hold a court-ordered claim to receive their unpaid wages never see a dime.
Over a third of workers employed in Pasadena earn less than $15 per hour. Because of wage theft, quite a few earn less than the legal minimum wage.
Every week, workers go to the Pasadena Community Job Center to report that their employers have ripped them off and ask for help. In some cases, employers owe them a few hundred dollars. In other cases, the amount exceeds $10,000. In every case, workers who are victims of wage theft face dire consequences. If they don’t get paid, they can’t pay their rent. And if they can’t pay their rent, they get evicted, forcing their families to move to overcrowded quarters or even become homeless.
• Rosa, a longtime Pasadena resident, was hired to clean a home for $10 an hour. Her boss, a business owner, also enlisted Rosa’s help at a candle store in Pasadena. In February 2015, Rosa was told that her services were no longer needed, and was dismissed without being paid for her last 40 hours of work. Rosa is still owed a total of $400, but her former employer refuses to pay.
• Florentino, also a Pasadena resident, worked for 22 days at three different construction sites doing demolition work for the same contractor. The contractor agreed to pay him $100 per day, but by the end of three weeks had only paid $700. Upon confronting the contractor and demanding his money, Florentino was again promised the balance of his wages. But after that last discussion in December, the contractor vanished. Florentino is still waiting for the $1,500 he is owed.
• Irma was hired for a monthly salary of $1,200 to work as a dishwasher at a Pasadena restaurant. Irma’s hourly wage was under $4 hour, a violation of the law. Over the course of seven months, Irma received just $4,500. Without adding the applicable penalties for delayed payment and lack of work breaks, Irma is still owed over $15,000.
The workers who show up at the Job Center are the tip of the iceberg. Many Pasadena workers bring their complaints to their clergy or friends who don’t know how to advise them on what to do. A significant number of workers don’t know their rights under the minimum wage laws. Some workers are afraid to speak out, fearing that they will get fired for complaining.
Wage theft occurs in the shadows, invisible to most people, but it has a devastating impact on families and illegally deprives them of wages they are owed and which they would spend in the local economy.
Employers who engage in wage theft are very diverse. Workers complain that they are ripped off by restaurants, construction contractors, car washes, warehouses, janitorial services, and Pasadena residents who hire people to clean their homes, take care of their children, and tend to their lawns and gardens. But there are many other types of businesses that could also be inducted in Pasadena’s wage theft Hall of Shame.
Earlier this month, the Pasadena City Council adopted, by a unanimous 8 to 0 vote, a citywide minimum-wage policy that could make the problem of wage theft either better or worse, depending on how well the city government enforces the new law. Under the new ordinance, the minimum wage will be $10.50 an hour starting on July 1 — 50 cents above the state minimum wage. It will increase to $13.50 by 2018, at which point the city will examine the impacts of the law on the local economy. As he has said many times, Mayor Terry Tornek expects that the City Council will then vote to gradually raise the minimum wage to $15 an hour by 2020, after which it will increase each year by the rate of inflation, as outlined in the ordinance.
Most Pasadena employers are honest and responsible and will no doubt comply with the new law without being pressured to do so. But there are a sizable number of employers — the “bad apples” — who will violate the law, either because they aren’t aware of their legal responsibility or because they intentionally and unscrupulously cheat workers out of the pay they are owed. Either way, the city government has a responsibility to enforce its new law. We enact laws to prevent people and businesses from doing bad things and to punish those who engage in bad behavior.
The timing is urgent, because the new minimum wage begins on July 1. City staffers are now at work devising an enforcement plan, which they will unveil to the City Council and the general public in the next month or two. A growing number of cities in California and around the county have adopted municipal minimum-wage laws. Each has been faced with the obligation to develop an effective enforcement strategy. Based on those experiences, we know what needs to be done in Pasadena to implement the City Council’s unanimous mandate. The city must:
• Inform and educate businesses about the new wage requirements and workers of their rights to report suspected theft of their wages. This can be done by city staff but it should also include partnering with nonprofit community groups that have knowledge about these issues and whom employees trust.
• Investigate claims of workers who believe they’ve been paid less than they’re owed.
• Facilitate wage payment mediation between employees and employers, or, in the event of failed negotiations, refer cases directly to a local labor standards office with the power to initiate administrative hearings that could lead to corrective actions against employers, including paying workers triple damages, fines, and potential loss of business licenses for chronic violators.
Thanks to Pasadenans for a Livable Wage — a broad coalition of faith-based and community organizations, nonprofit service providers, enlightened businesses, and immigrant rights and labor groups — our city has joined the growing number of communities that have adopted minimum wage laws.
But passing a good minimum wage law is only the first step in improving the lives of Pasadena’s residents, lifting thousands of families out of poverty, and injecting tens of millions of dollars into the local economy. The city government also needs to devote sufficient resources to make sure that the new law is enforced. Only then will the City of Roses truly become the City of Raises.
Pablo Alvarado is the executive director of the National Day Laborers Organizing Network. Peter Dreier is chair of the Urban & Environmental Policy Department at Occidental College. Both are longtime Pasadena residents.