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On Labor Day, California workers need help to survive hostile U.S. Supreme Court (CA)

BY ELIZABETH STEELMAN
SPECIAL TO THE SACRAMENTO BEE
AUGUST 31, 2018 12:00 PM

While many politicians have committed to raising wages or combating wage theft and other workplace abuses, on this Labor Day we are living through a time in American jurisprudence that appears hell-bent on degrading the tools that workers rely on to enforce these commitments.

I am not just talking about the Janus ruling by the U.S. Supreme Court, which will weaken public-sector labor unions by forcing them to serve non-members for free.

Another controversial recent decision was the Epic Systems case, which effectively bars non-unionized workers from collective action and forces them to settle disputes through a mandatory arbitration process that’s controlled by the boss.

The Supreme Court deepened the power imbalance that exists between employer and employee, as if threats of retaliation don’t already prevent many workers from enforcing their rights.

In California, one in five construction workers is a victim of some form of wage theft. Generally, this means they were paid off the books, less than promised or not at all. This is about more than workers. Wage theft costs California taxpayers $8.5 billion every year and puts honest businesses at a competitive disadvantage.

Absent a union contract (which only cover about 20 percent of construction workers), a cheated worker’s best hope is some type of collective action or robust government enforcement. The Epic Systems ruling basically took the first option off the table.

To combat abuses such as wage theft, labor laws must be enforced. But only a fraction of victimized workers ever file claims and most wage theft judgments are never collected. The often lengthy and complicated process leads many workers to simply give up fighting a system they see as rigged.

States and municipalities can either accept this reality, or commit themselves to reclaiming the enforcement tools that courts have taken away from workers.

(Read More)

Bay Area Governments Taking Action on Wage Theft (CA)

Other California cities should follow the lead of Berkeley and San Jose on this issue.

By: Cesar Sanchez
August 21, 2019

Research has shown that fully one in six of the more than one million workers in California’s construction industry face some form of exploitation. Often, they are immigrants searching for a better life for their families. For unscrupulous employers, such aspirations are too often weaponized both as a recruitment tool and as a means to silence workers who might otherwise speak out against abuse.

Yet workers aren’t the only victims. Construction employers who engage in these crimes are cheating taxpayers out of billions of dollars payroll tax and workers compensation obligations each year.

Most of the time, contractors and subcontractors who engage in these practices don’t get caught or aren’t held accountable. While California law protects all workers – regardless of immigration status – the fact is that efforts to demonize immigrants by some national political leaders has only given malign employers more cover.

The City of Berkeley has gone a step further. Under the leadership of Mayor Jesse Arreguin, the city council has strengthened a measure that holds construction businesses accountable for shortchanging their workers or failing to inform them of their rights. The city’s wage transparency ordinance that was updated in June withholds a certificate of occupancy from projects where workers have alleged wage violations, requires construction employers to commit to providing workers with detailed pay stubs outlining wage rates and deductions, and publicly post contact information for state enforcement agencies at each jobsite. Without a certificate of occupancy, cheaters can’t win – their building can’t open, be sold, or start collecting rent.

Over the last several decades, construction wage theft has spiked 400 percent. Contractors who are unable to win bids based on construction competence have sought to normalize business practices that steal from taxpayers and their most vulnerable workers. As we commit ourselves to prevent the kind of abuses that happened at Silvery Towers, we must remember the best solution is not to blame or condemn the victims. Instead, it must be to disrupt the corrupt business models that perpetuate these crimes.

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Michigan Legislature Considers Package of Bills Addressing Wage Theft, Independent Contractors, and Noncompetes (MI)

The National Law Review
Friday, September 6, 2019

On August 29, 2019, legislators from the Michigan House of Representatives announced an ambitious package of 12 bills aimed at creating new criminal and civil penalties to combat employers that fail to properly pay wages and overtime pay. The legislation would also establish enhanced protections and penalties under Michigan’s whistleblower statute and create new civil remedies against employers for overzealous enforcement of noncompete agreements and for misclassifying employees as independent contractors.

Background

The bills’ highly publicized announcement, which was coordinated with local labor union leaders to occur just before the Labor Day holiday, aligns with Michigan Attorney General Dana Nessel’s Payroll Fraud Enforcement initiative. Nessel introduced the initiative in April 2019 when she created a payroll fraud hotline for reporting suspected violations of existing payroll and wage theft laws in effect in Michigan.

The new legislation would make employee-friendly modifications to several Michigan statutes, including the Payment of Wages and Fringe Benefits Act (PWFBA), the Whistleblowers’ Protection Act (WPA), the Michigan Antitrust Reform Act (MARA), and the Improved Workforce Opportunity Wage Act (IWOWA), and would amend the Michigan Code of Criminal Procedure to create a new felony offense for employers that commit a second or subsequent violation of certain provisions of the PWFBA.

Summary Analysis of the Bills

Below is a summary of the initial drafts of the ten House bills in the package that would have the most significant effect on private employers. It is important to note, however, that these are initial drafts of proposed legislation and are a long way from being enacted into law, especially given the current composition of the Michigan Legislature. However, the intense interest from the attorney general’s office and any changes in the makeup of the House and Senate could give the bills momentum.

Final Thoughts

As Jimmy Stewart taught us all in his 1939 film Mr. Smith Goes to Washington, bills introduced on the legislative floor have a long way to go before they become law. To be sure, the potential for civil fines ranging from $5,000 to $10,000 per violation, mandatory assessment of attorneys and lost wages, and the possibility of felony criminal penalties make the legislative package something that will garner a lot of attention. Moreover, given the intense interest from the attorney general’s office and Michigan labor leaders, it is unlikely that the bills will die without significant debate and perhaps some provisions being passed into law.

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Ending payday pilferage (NJ)

New Jersey strengthens its wage-theft laws

By: Daniel J. Munoz
August 19, 2019 12:01 am

Less than a day after Acting Gov. Sheila Oliver signed a measure ramping up penalties for violations of the state’s wage theft law, state regulators announced they hit an employer with a $20,000 fine for allegedly engaging in that very practice. …

Janice Fine, an associate professor who heads the Center for Innovation in Worker Organization at the Rutgers School of Management and Labor Relations, said that such a quick turnaround will shock employers engaged in the same practices and that they need to start paying workers what they are actually owed.

“If you name and shame it works,” Fine said.

Wage theft happens when an employer does not pay workers what they are owed; it can happen in service industries, blue collar sectors and office environments, Fine said. Theft can take a variety of forms: refusing to pay workers at all or refusing to pay for hours worked; refusing to pay standard hourly or overtime minimum wage rates, or refusing to pay for time out of regular shifts or “off the clock.” Employees might be given checks that bounce, have illegal deductions taken from their paycheck or deductions for meals and other breaks they did not actually receive.

At least $2 billion in stolen wages were recovered nationwide between 2015 and 2016, according to a 2017 study by the Economic Policy Institute.

The newly enacted New Jersey measure increases fines for wage theft to between $500 and $1,000 and provides for prison sentences of between 10 and 90 days for a first offense. Fines would climb to between $1,000 and $2,000 for a second offense, and imprisonment for up to 100 days. Habitual offenders could face up to five years in prison and fines of $15,000.

To force the hands of employers found guilty of wage theft, the state labor commissioner can revoke an employer’s license – effectively shutting down the business – until the correct wages are paid.

Employees can seek recovery of up to six years of stolen wages, or up to 200 percent of their stolen wages – capped at $50,000 – if business owners are found to have retaliated against workers for reporting the thefts. Proponents of the anti-retaliatory measures argue they are necessary to prevent employers from forcing workers to keep quiet about wage theft.

“Today we want to send a message to employers, the bad employers, that in New Jersey we are not going to tolerate the exploitation of any worker,” Oliver said at an Aug. 6 bill-signing ceremony in Elizabeth.

(Read More)

Officials, activists fight wage theft on the border (TX)

Mexican consulate and U.S. Labor Department seek to end workplace exploitation

by: Julian Resendiz

Posted:
Aug 23, 2019 / 03:01 PM CDT

EL PASO, Texas (Border Report) – The Mexican consulate and the U.S. Labor Department office in El Paso on Friday signed a cooperation agreement to fight wage theft and other labor violations committed against immigrants.

The consulate said it will begin a weeklong labor-rights education campaign on Monday and encourage Mexican citizens who experience workplace exploitation to file a complaint with the local Wage and Hour Division of the Labor Department.

“Everyone who works in the United States, regardless of immigration status, has rights in the workplace that are guaranteed by law,” said Mauricio Ibarra Ponce de Leon, Mexican consul general in El Paso. “We will support our community and ensure that their labor rights are being respected. This agreement allows us to send people who come to us to the appropriate (U.S.) authority.”

Jacobo Valenzuela, a representative of the Wage and Hour Division in El Paso, said his office receives some 600 labor-related complaints a year. Most complaints come from workers in the restaurant, construction and agricultural industries, he said.

Ibarra said wage-theft – which occurs when an employer short-changes an employee for hours worked, refuses to pay overtime already performed or withholds payment altogether – isn’t the only issue faced by immigrant workers on the border. The weeklong Spanish-language education campaign known as “Labor Rights Week” will also include information on filing workplace injury claims, sexual harassment and human-trafficking complaints, as well as workplace safety issues.

(Read More)

Sen. Gary Peters wants to hear from workers victimized by wage theft (MI)

By Anne Runkle
August 5, 2019

U.S. Sen. Gary Peters (D-Michigan) wants to hear from workers who have been victims of wage theft.

Peters is conducting an investigation into wage theft practices, which could include:

  • Failure to pay the applicable minimum wage
  • Failure to compensate employees for overtime
  • Misclassifying employees as independent contractors to avoid paying certain benefits or taxes.

Peters, ranking member of the Senate Homeland Security and Governmental Affairs Committee, has directed the committee’s minority staff to conduct an investigation focused on these and other actions that prevent employees from receiving all of their pay.

If you have information to share regarding your personal experiences with wage theft, visit https://www.hsgac.senate.gov/contact/investigations.

“If you put in a hard day’s work, you deserve to get paid for it. Yet every day, workers in Michigan and across the country are denied wages or benefits they have earned on the job,” said Peters. “This investigation will help expose wage theft and develop ways to hold employers who break the rules accountable for actions that hurt hard-working families.”

Wage theft has serious financial consequences for workers and businesses, according to a release from Peters. The Economic Policy Institute estimates that American workers are shorted as much as $15 billion each year due to minimum wage law violations.

Michigan has the fifth highest total of unpaid earnings in the country due to minimum wage violations.

According to EPI, from 2013 to 2015, roughly $430 million in wages were improperly withheld from Michigan workers.

Misclassifying workers as “independent contractors” also negatively impacts taxpayers. According to the U.S. Department of the Treasury, millions of employers nationwide have failed to pay more than $45 billion in employment taxes.

These practices deprive the federal government of billions of dollars in unpaid employment taxes that are used to fund Social Security, Medicare and other benefits, according to the release.

In Michigan alone, a study released in 2008 found that Michigan loses tens of millions of dollars annually from improper classification practices – depriving the state of dollars for projects like highway and infrastructure upgrades, educational programs or public hospitals.

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Minnesota Building Trades Announce Plans to Fight Wage Theft, Exploitation, Labor Trafficking (MN)

By Filiberto Nolasco Gomez
Workday Minnesota
July 26, 2019

BRAINERD
Leaders of 14 unions that represent Minnesota’s unionized construction workforce Thursday announced the launch of a new initiative to combat wage theft, exploitation, and labor trafficking, which they say pose a growing threat to the welfare of immigrant workers and the health of the state’s construction industry.

The Not On My Watch campaign will enlist union staff and rank-and-file members in efforts to identify cases of abuse, and to assist exploited construction workers. Union construction workers will be asked to wear hard-hat stickers that read “Not On My Watch” or “Ya No Mas” and participate in job-site actions to show solidarity with immigrant construction workers who may be vulnerable to exploitation by unscrupulous contractors.

“This initiative is about ensuring that no construction workers in our state are exploited and that all contractors are held accountable to the law,” said Jessica Looman, Executive Director of the Minnesota State Building and Construction Trades Council, “In Minnesota, workers stand-up for workers.”

Union members and nonunion workers joined forces last month at a rally to protest allegations of wage theft by immigrant concrete workers building the Digi-Key Expansion Project in Thief River Falls, Minnesota that was widely covered on TV and in print. A second major rally is planned for downtown Minneapolis on Monday, July 29, immediately before a Minneapolis City Council hearing on a proposed wage theft ordinance.

Minnesota Building Trades leaders were joined at the unveiling of their wage theft initiative by Attorney General Keith Ellison welcomed the announcement.

“Wage theft is theft, pure and simple. Not only does it rob workers of their ability to afford their lives, it robs them of their dignity,” Attorney General Ellison said. “It’s also often the canary in the coal mine for other serious abuses, like denial of healthcare and human trafficking, which we’ve seen right here in Minnesota. I’m proud that our new law against wage theft is the strongest in the country, but we in government can’t fight it alone. That’s why I’m grateful for the ‘Not On My Watch’ and ‘Ya No Más’ campaigns. It’s powerful that workers themselves will be on the front lines in helping us fight wage theft and helping all workers afford their lives and live with dignity and respect.”

Nancy Leppink, Commissioner of the Minnesota Department of Labor and Industry also welcomed the announcement. “The State of Minnesota is committed to combating wage theft, but we can’t do it alone,” said Commissioner Leppink. “We will need the help of labor, community leaders, responsible employers, and of course workers themselves, to make sure workers know their rights and can bring abuses to light.”

(Read More)

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ROCHESTER WAGE THEFT CASE IS THE FIRST INVESTIGATION UNDER A NEW LAW (MN)

According to The North Central States Regional Council of Carpenters, worker exploitation is a common practice in the Med City.

Posted: Jul 9, 2019 7:22 PM
Posted By: Annalise Johnson

ROCHESTER, Minn. – A group of Rochester area workers are pursuing a wage theft claim against Ed Lunn Construction. Workers allege Ed Lunn Construction duped them out of thousands of dollars in wages after working the majority of 2018 on a $40 million, city-funded affordable housing project that’s now filling with residents.

Lunn denies legal responsibility and says a subcontractor employed the workers who are accusing him of wage theft.

A new bipartisan law went into effect July 1st aimed at cracking down on wage theft. It doubles the amount of state investigators working on wage theft cases. Violaters can face 5 years prison and a $10,000 fine. The law will be enforceable beginning August 1st.

KIMT spoke to Mike Wille, business agent for North Central States Regional Council of Carpenters. The union advocates for workers rights. He tells KIMT that a labor broker business model exploits workers. He says employees often work long hours without overtime pay and don’t receive workers compensation of unemployment insurance. “They don’t get paid for the work that they performed, or they’ll perform work and they’ll withhold the money and then they’ll pay them for the past work as they do work in the future, so it’s like they’re dangling a carrot in front of this person and the carrot is the money they’re owed,” he explains.

According to Wille, roughly 70% of apartments and hotels built in Rochester in the last five years are built under this business model. “Shirking their responsibilities back onto the employees helps them keep their costs down and enables them to basically cheat and win jobs from contractors that play by the rules,” he says.

Minnesota’s new wage theft prevention law is one of the strongest in the country. “I hope it sets a precedent and a standard across the country for all states and cities and counties to abide by because there is no place for this kind of practice anywhere in the United States,” says Wille. “We’re better than that and our workers deserve better than to be cheated out of their wages.”

(See Article)

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Minnesota to open wage theft investigations unit (MN)

Written By: Tess Williams
Jul 16th 2019 – 12pm

Gov. Tim Walz signed a new law that invested $3.1 million to the Department of Labor and Industry to enforce wage and hour laws. The new law is designed to protect workers from exploitative employers who do not pay them for their work. The legislation adds criminal penalties for employers.

In turn, the attorney general formed a Wage Theft Unit to enforce the new law and litigate the cases. A press release from Attorney General Keith Ellison said wage theft includes “having hours shaved off your paycheck; being forced to work off the clock; not getting paid for overtime; being paid at a lower rate than promised, sometimes even below minimum wage; being paid in cash or other forms like gift cards, with no Social Security, unemployment or worker’s comp withheld; being misclassified as an independent contractor and more.”

Assistant Attorney General Jonathan Moler and investigator Ana Vergara will staff the unit. Any Minnesotan who has experienced wage theft can contact the attorney general’s office at 651-296-3353 or attorney.general@ag.state.mn.us.

(See Article)

Why Minneapolis passed a wage-theft ordinance that essentially duplicates state law (MN)

By Jessica Lee | 08/08/2019

The Minneapolis City Council unanimously passed an ordinance that establishes the city’s own set of rules to crack down on wage theft and force employers to be transparent with payrolls. The ordinance is similar to a state law that went into effect last month.

On Thursday morning, the 13-member council rewrote city code to give attorneys within the city’s Department of Civil Rights authority to enforce the municipal law against wage theft – which is when employers don’t pay employees, or pay them less than guaranteed – and require employers to provide earnings statements on a regular basis.

Meanwhile, a larger-scale effort is beginning within the Minnesota Department of Labor and Industry and the attorney general’s office. Last month, Gov. Tim Walz signed a bipartisan bill to establish protections for workers that substantially grow the state’s resources for investigating allegations of wage theft – guidelines that are almost identical to the Minneapolis ordinance. Supporters call the new policies necessary considering the pervasiveness of underpayment that disproportionately affects Minnesota’s communities of color and immigrants.

But while labor and social-justice advocates celebrate the new efforts, which they describe as the toughest of their kind in the country, this question remains: Why is it necessary for Minneapolis to pass an ordinance that basically duplicates state law?

The state law

The state Labor Department estimates that up to 40,000 employees in Minnesota are not fully paid what they have earned each year. Examples of wage theft are when employees clock out but keep working, don’t receive sick and safe time or time and a half for overtime, or work more hours than promised at a flat rate.

That is what prompted the 2019 change to state law. The law set aside roughly $3 million over the next two years to establish a new investigative program and help pay the salaries of about 12 new hires, including investigators, communication personnel and researchers. In an interview last week, Labor Commissioner Nancy Leppink said the department is in the process of finalizing job descriptions. Once administrators establish the new team, she said the department will create new operating and training procedures.

Currently, Labor Department investigators mostly do “records-based” investigations by examining documentation such as employees’ pay stubs. But with the funding boost, investigators will be able to travel to employees’ workplaces to do in-person interviews and look around.

“[Onsite investigations] have greater capacity to detect various, certain kinds of wage theft, and also to detect things like labor trafficking, which you’re not going to see in … simply the review of paper records,” Leppink said. “It’s clear that we need to be getting into workplaces to find workers who may not even be on the books in terms of payroll records.”

She said the state welcomes Minneapolis’ efforts to create its own team of investigators and enforcement regulations, and staff within the city and Labor Department have been meeting regularly to coordinate strategies.

“The problem is significant, and so therefore additional resources to respond to these issues are always welcome and needed,” Leppink said. “Having more hands on deck can only make for improvements on this issue.”

(Read More)