Wage theft: How to attack the issue fairly


Selena Patterson waits on breakfast patrons at The Jones Eastside at 401 NE 23rd Ave. in Gainesville, Fla., on Thursday, March 14, 2013. Maya Velesko, co-owner of The Jones Eastside and The Jones B-side, said she has always paid her restaurants' employees a fair living wage. “I don't have any fear of the impact of these ordinances going in because I know I'm on the right side of things,” she said.

Erica Brough/The Gainesville Sun
Published: Sunday, March 17, 2013 at 6:01 a.m.
Last Modified: Saturday, March 16, 2013 at 6:51 p.m.

For years, Carole Dunne worked without overtime for fear of losing her job.

Dunne, 68, of Gainesville, worked full time for a health facility for about six years, often coming in early to open and staying late to close without overtime pay.

This was years before the nation's recent economic crisis, but plenty of people were waiting and willing to take her job, she said.

“I was afraid to ask for anything extra,” she told the Alachua County Commission Tuesday. “There's a real fear factor of saying something.”

Dunne was among several residents who spoke at Tuesday's public hearing, urging the commission to enact an effective ordinance to combat wage theft locally.

Wage theft ranges from unpaid overtime and tips-only compensation to mandatory off-the-clock work and withheld final paychecks.

Florida averages 3,036 wage violations a year that are reported to the U.S. Department of Labor's Wage and Hour Division (WHD-DOL), according to a January 2012 study by the Research Institute on Social and Economic Policy (RISEP) at Florida International University. More than $28 million in unpaid wages have been recovered in the Sunshine State through various avenues, the institute says.

Three Florida counties — Miami-Dade, Broward and Palm Beach — have already developed plans to tackle wage theft within their borders.

A local coalition, the Alachua County Wage Theft Task Force, has worked for months to build community support for a countywide ordinance allowing the county to manage disputes between employees and employers over unpaid wages.

County commissioners are debating two approaches: to have the county mediate disagreements but leave deciding the cases to the courts, or to have the county adjudicate these complaints itself and have a hearing officer determine whether back wages are owed.

But as the commission considers how to approach the issue, a bill filed by state Sen. Rob Bradley, whose district includes Alachua County, could force it and other Florida counties to take the mediation track if the bill gets passed.

A local need?

Although wage theft is a nationwide problem, is it a big enough issue locally to warrant a county ordinance?

Trisha Ingle, 44, a Gainesville resident who said she has faced wage theft at three places in town, thinks so.

She said she was repeatedly shorted hours on her paychecks, and one place abruptly stopped scheduling her after she complained multiple times, she said. She said she called the federal Department of Labor twice a week for four months but never got anyone on the phone.

With thousands of students attending the University of Florida and Santa Fe College, Alachua County has a large pool of workers with little job experience who are vulnerable to wage theft, Ingle said.

Many students start their first jobs here and don't know to check their hours worked against their paychecks, she said. If they do notice, they may be hesitant to speak up.

“Most people are not going to buck the authority of their first job because it goes against the grain,” she said.

Experienced workers like herself may accept unfair wages because they need the job. Ingle said she has been paid only in tips as a bartender in the past. But she was just happy to have the money, even if she deserved more.

There were 2,077 confirmed wage theft violations in Alachua County from 2000 to 2010, amounting to a little more than $1 million in restored back wages, according to WHD-DOL data cited by the task force.

The local industries with the most offenses were health care and home care, construction, restaurant and retail.

But the true amount of unpaid wages is probably two to three times higher because so many cases go unreported, according to RISEP.

An ineffective system

The crux of the argument in favor of county wage-theft ordinances is that the current system of handling these complaints is ineffective.

Local task force member Jeremiah Tattersall said there is no place at the state level offering wage-theft help.

The Florida Legislature dismantled the state's Department of Labor and Employment Security in 2000, according to RISEP. Florida doesn't have a state equivalent to a labor department to consider wage-and-hour complaints.

Additionally, the state attorney general hadn't brought any civil action to enforce Florida's 2004 minimum-wage law as of December 2011, according to RISEP.

With no state-level recourse for wronged employees, those with wage complaints must look to the federal government for help. But that can be problematic.

There are 1.2 million workers for each Wage and Hour Division investigator in Florida, according to RISEP. That's more than eight times the national average.

Michael Young, district director for the Jacksonville WHD-DOL district office, said there are 1,200 Wage and Hour Division investigators nationwide but 8 million businesses.

“Do the math. We can't look at everything,” he said. And in Florida, there is “no other game in town” to address wage theft.

The Jacksonville office, which covers North Florida, completes a wage-theft investigation within 90 days of the complaint on average. But complaints that reveal a systemic problem may take longer to resolve due to deeper investigation.

The office usually resolves cases involving withheld final paychecks within 15 days, Young said.

If staff can't get to a case in a timely manner, they advise workers of their rights and how to bring their case to court.

Dense metro areas may take longer to complete investigations, he said.

The RISEP study cited a 2009 Government Accountability Office report in which a Miami Wage and Hour Division investigator said it would take eight to 10 months to begin investigating a new case due to the office backlog.

Young said his office prioritizes wage-theft complaints in lower-wage industries such as retail, restaurants and construction.

Employees in these sectors are less likely to go to court or take any action because they fear job loss more than other workers.

“They don't have that cushion,” he said. “They're living paycheck to paycheck.”

State solution

State Sen. Rob Bradley, who represents Alachua County, has filed a bill that would establish a uniform process for handling wage-theft complaints.

Senate Bill 1216 would pre-empt county wage-theft ordinances that, like the Miami-Dade County program, would adjudicate disputes through a hearing officer. If enacted, the legislation would direct employees to go to court instead but permit counties to mediate complaints.

Miami-Dade County's 2010 ordinance established a process through which staff first mediate wage-theft disputes, which is typically successful, Tattersall said. Miami-Dade's ordinance wouldn't be pre-empted by Bradley's bill.

If that doesn't work, a hearing officer determines whether a violation occurred. Employers who lose their cases at this stage may be asked to pay the worker's unpaid wages plus damages, as well as county administrative costs.

Since the Miami-Dade ordinance was fully implemented in September 2010, the county has recovered almost $400,000 in unpaid wages, according to RISEP.

Bradley's bill falls more in line with Palm Beach County's approach to wage theft, which refers decision-making to its court system.

Bradley said his goal is to establish a uniform process that both protects employees and reassures employers that these disputes will be handled the same across county lines.

“It's a pro-worker bill and it's a pro-business bill in that ... over time it will enable us to attract more business and create jobs in the state of Florida by having a uniform system rather than a patchwork quilt of regulations throughout the state,” Bradley said.

Under the bill, counties could enact ordinances allowing them to mediate disputes and potentially resolve them before proceeding to court. Counties could also help workers cover court filing fees.

Workers who win in court would receive their unpaid wages and get their legal costs covered, Bradley said.

The Florida Retail Federation (FRF), an opponent of the Miami-Dade wage-theft model, supports Bradley's bill and feels a consistent, statewide solution utilizing the county court system is best, said Samantha Padgett, general counsel for the FRF.

She said the FRF approached Bradley about their wage-theft concerns, prompting the creation of Senate Bill 1216.

The FRF prefers Palm Beach County's court-based system to Miami-Dade County's hearing-officer method. It would be challenging to establish a statewide adjudication system based on Miami-Dade's approach because of financial concerns, Padgett said. The state would need to develop standard rules and oversee its implementation, Padgett said.

“We have a working court system. It's not perfect, but it's the one that applies to all of us,” she said. “Our feeling is to use what's available to us right now.”

Bradley said he would prefer the Alachua County Commission wait until the state legislative session concludes before establishing an ordinance. Then commissioners will know if Bradley's bill succeeds and they can proceed accordingly.

While Tattersall agrees a statewide solution would work best, he said Bradley's bill would be problematic.

“The reason why it's a bad bill is because it takes a court system that's not very effective right now and it throws people into it, and that's their only chance of redress,” he said.

The business side

Alachua County's wage-theft discussion has elicited praise and concern among local businesspeople.

Maya Velesko, co-owner of The Jones Eastside and The Jones B-side, said she has always paid her restaurants' employees a fair living wage.

“I don't have any fear of the impact of these ordinances going in because I know I'm on the right side of things,” she said.

Velesko thinks wage theft should be handled through the county because people won't get as tied up in bureaucracy as they would at higher levels of government.

Tim Rogers, project manager for the Alachua County office of Miller Electric Company, said stronger enforcement would help employers who face competition from businesses with unfair wage practices.

A county ordinance also would keep business owners honest by dampening the temptation to engage in wage theft to cut costs, he said. While some employers will still break the rules, ones who are generally honest but susceptible to that temptation would be deterred, he said.

“Yes, there's going to be problems with it. But if we never did anything, it'll just be what it always is,” Rogers said. “Is it the end of the world if it doesn't pass? No. But I think it would be a help.”

Some business owners, however, worry about the negative impact a wage-theft ordinance could have on their companies.

State Rep. Keith Perry, president of Perry Roofing, expressed concern that the Miami-Dade wage-theft method could place additional burdens on small businesses facing unfounded worker complaints.

He said he believes people should continue to handle wage theft through the current federal and court processes.

“If we didn't have existing laws, if we didn't have existing rights in the court now, then I'd say this would be absolutely necessary,” he said of a county ordinance.

Perry said he would prefer the county educate people about their rights rather than set up what he considers a “one-sided, unjust system” that doesn't provide equal protections for employer and employee.

“You cannot have an ordinance that's written just to protect one side of an equation,” he said.

Contact Morgan Watkins 338-3104 or morgan.watkins@gvillesun.com.

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