Collecting Unpaid, Minimum Wages, for California’s Immigrant Workers
According to a report titled “Hollow Victories: The Crisis in Collecting Unpaid Wages for California’s Workers,” thousands of mostly immigrant workers who are employed to perform minimum- and low-wage jobs won monetary judgments against their employers but were never paid.
The report by the National Employment Law Project and the UCLA Labor Center concludes from 2008 to 2011, only 17% of court-ordered claims for back pay and labor law penalties were collected. Even after judges signed orders and employers signed settlement agreements only 42% — $165 million out of $390 million — was recovered. Meanwhile, companies representing three-fifths of unpaid-wage judgments legally vanished.
“Businesses are dissolved, licenses canceled, and it’s very hard for workers to get their money,” said Eunice Cho, a staff attorney with the National Employment Law Project and coauthor of the report.
Avoiding penalties for court-ordered back wages
Avoiding court-ordered back wages and penalties is the result of an unregulated underground economy that involves cash payments for goods, services, and labor. According to a decade-old study by the Economic Roundtable, a Los Angeles public policy research organization, more than a quarter of Los Angeles County workers are paid in cash.
For each of the 27,000 legally registered janitorial companies there are two to three underground firms, said the Maintenance Corporation Trust Fund, a nonprofit group that helps victims of wage theft.
“The lowest bidder gets the contract,” said Lilia Garcia, the fund’s executive director. “The way the irresponsible business gives the lowest bid is by breaking state wage and hour laws, not paying taxes and not paying workers’ compensation insurance.”
Advocates for low-income workers are backing a proposed bill named the Fair Paycheck Act in hopes they’ll be able to collect judgments more speedily before potential scofflaw employers can switch their identities and avoid paying employees. The Act, introduced in the Legislature, AB 1164, by Assemblywoman Bonnie Lowenthal (D-Long Beach), would slap a wage lien on an employer’s property in order to ensure assets are available to settle any unpaid wages after a judgment is rendered.
The measure ran into opposition from the California Chamber of Commerce, which added the proposal to its list of “Job Killer” bills. It has been stalled in the Assembly Appropriations Committee.
Other business trade groups and chambers of commerce have criticized the proposal, saying it “would cripple California businesses by allowing any employee, employee representative or the Labor commissioner to file super-priority liens on an employer’s real property … for an alleged, yet unproven wage claim.”
Lowenthal intends to revive her bill next year.
“AB 1164 is about fairness,” she said. “Every Californian deserves to be paid the wages they are due.”
Peter K. Levine
A Professional Law Corporation