In a war against wage theft

“At his day thou shalt give him his hire, neither shall the sun go down upon it, for he is poor and his life depends on it. …” – Deuteronomy 24:15

Last week, Los Angeles’ City Council voted to raise the minimum wage to $15 per hour by 2020. The decision was greeted with tremendous fanfare. A companion vote, arguably of equal importance to low-wage workers, received almost no attention. Alongside the minimum wage vote, the City Council asked the city attorney to draft an ordinance to create an Office of Labor Standards to enforce the new minimum wage and other basic labor standards. 

The ugly truth is that many workers in Los Angles don’t make the minimum wage. In a city unflatteringly dubbed “the wage theft capital of the nation,” an increase in the minimum wage without enforcement would leave behind our city’s most vulnerable and impoverished workers. 

The garment industry, which accounts for 45,000 manufacturing jobs in Los Angeles, is awash in wage theft. The typical garment worker is paid a “piece rate” of a few cents per garment, which almost never amounts to the minimum hourly wage. Bet Tzedek Legal Services, the nonprofit firm where I practice, has represented hundreds of garment workers in wage claims. A recent client reports regularly working 55 hours per week, sewing clothes for many well-known fast-fashion designers, and receiving between $260 and $340 per week. The problem is so pervasive that she is one of several repeat garment worker clients my firm has represented. 

Wherever there is an industry employing low-wage workers, wage theft is often not far behind. It is usually hiding behind layers of subcontracting and in the shadows of the underground economy. For example, two young female janitors came into our office last month. They worked at a local movie theater chain but were paid by an out-of-state subcontractor. They worked more than 50 hours per week for a biweekly “salary” of $650. When one of them complained about their wages, they were quickly replaced. 

These experiences are not the exception. A 2010 UCLA study found that 88 percent of low-wage workers in Los Angles experience a form of wage theft on a weekly basis. Nearly 30 percent of low-wage workers surveyed did not receive the minimum wage. In total, Angelenos lose $26.2 million in wages per week to wage theft. Across every metric, the rate of wage theft in Los Angles was higher than in New York and Chicago. 

Meanwhile, the current enforcement mechanisms and resources are woefully inadequate. The most exploited workers in our local economy are isolated, fearful of retaliation and confronted with significant cultural barriers to asserting their rights. For workers willing to come forward, the state labor commissioner wage claim process takes well over a year and can be futile. Between 2008 and 2011, only 17 percent of those who won their wage claims before the labor commissioner were able to recover any payment whatsoever. Rather than pay owed wages, employers nimbly transfer assets, relocate and create new corporate shells. 

Without outside intervention, industries can quickly slide down a wage-theft rabbit hole. Where bad actors thrive, competition by employers playing by the rules becomes nearly impossible. Indeed, it is hard to imagine how a fast-fashion garment factory paying its workers properly could survive, given the rock-bottom industry standard. It has to be the role of government to ensure a level playing field or labor standards quickly devolve into lofty goals. 

By creating a local wage enforcement office, Los Angeles is joining other progressive cities such as San Francisco, Seattle and Washington, D.C., and that are striving to create that level playing field. San Francisco’s office is often cited as the gold standard. It employs a field enforcement model that cites any violating employer for owed wages to all employees, not just individual complainants. The office also engages in strategic outreach and partnerships with community organizations. As a result, the office actually collects the back wages it assesses. In 2013, it recovered nearly $1.5 million in wages. 

The next few weeks are crucial to the fate of the Los Angles office. The city attorney submitted a draft ordinance to the City Council last week. Parts of the draft, adopting San Francisco’s field enforcement model and fine structure, are encouraging. However, despite a request from the City Council, the draft does not include any wage lien mechanism for owed wages. Nor does it include the criminal misdemeanor provision recommended by advocates. Finally, the license revocation provision is puzzlingly limited to police permits rather than all licenses within the city’s control. 

Any unit created this spring will undoubtedly be underfunded. The City Council itself noted that its proposal funds only five investigators, whereas the San Francisco office has a staff of 25 for a city a quarter the size of Los Angles. This is all the more reason that lawmakers must equip the office with the most effective tools available. 

The minimum wage ordinance has the laudable goal of lifting low-wage working families out of poverty. But those who need it most will not benefit without meaningful enforcement. The City Council cannot solve this problem overnight. But by ensuring that an effective ordinance gets over the finish line, it can make Los Angeles a leader in wage theft reform, not just in wage theft.

Danielle Lang is a staff attorney in Bet Tzedek Legal Services’ Employment Rights Project. The program helps low-wage workers and trafficked laborers who were illegally denied earned wages or suffered illegal retaliation for asserting their rights. Since its founding in 2001, the program has obtained $36 million in judgments on behalf of 5,500 workers.