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View Winners → Pasadena Affordable Housing Project Sullied by Accusations of Wage Theft
News Dec 26, 2017
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The Summit Grove affordable housing project, which sits on the former site of a nuisance liquor store, was acquired by Heritage Housing Partners with $1.3 million worth of city funding. – Rendering courtesy Heritage Housing Partners
By Gus Herrera
One of Pasadena’s newest sites for affordable housing has come under scrutiny as two construction workers recently filed a complaint with the Labor and Workforce Development Agency (LWDA), alleging systematic wage theft by the project’s general contractor, RAAM Construction Inc.
The complaint, filed on Dec. 14 by Pasadena residents Lorenzo Aragon and Bayron Lopez, claims that RAAM and its agents required “workers to give kickbacks to the project’s foremen, failed to pay them for overtime and weekend work, denied them statutorily-required meal and rest breaks, and misclassified them as independent contractors rather than as employees,” according to a press release by the grass-roots group Pasadenans Organizing for Progress (POP!).
Aragon and Lopez are seeking to collect up to $1 million in fines, 25 percent of which they will keep – the other 75 percent will be paid to the LWDA, if the agency ultimately decides to follow through with prosecution.
According to Caleb Soto, staff attorney for the National Day Laborers Organizing Network (NDLON), if LWDA does not follow through, “then the workers’ attorneys will file an action in Los Angeles Superior Court to recover unpaid wages, damages for wrongful termination, and the fines for the violations against all of the construction workers.”
The Summit Grove affordable housing project, located at the corner of Orange Grove Boulevard and Summit Avenue, is partially funded by the city. The site is the second example in Pasadena history of the city using inclusionary housing funds to help developers purchase a nuisance property.
The Summit Grove site, formerly Andy’s Liquor, has been vacant since October 2015, when Heritage Housing Partners (HHP), a Pasadena-based non-profit, received approximately $1.3 million in city gap funding to successfully purchase the property, according to a staff report from March 14, 2016.
When completed, Summit Grove will provide 21 units (one two-bedroom unit and 20 three-bedroom units) for low- and moderate-income first-time homebuyers.
HHP has a storied history working with the city, building and selling over 130 affordable residences since 1988.
That said, it is important to note that the legal action is directed solely at the general contractor RAAM – in fact, Pablo Alvarado, executive director of NDLON, even praised HHP’s efforts to create affordable housing in Pasadena, “the Summit-Orange Grove Housing Project … is a laudable effort by the city to address Pasadena’s affordable housing crisis. We fully support city funding of the project. However, it is unconscionable that low-income workers who are part of the class for whom the affordable housing is being developed are exploited by wage theft from a contractor’s agents during the construction of the housing.”
Unfortunately, wage theft continues to be a widespread problem all across the country – a recent study by the Economic Policy Institute (EPI) revealed that $2 billion were recovered for workers in 2015 and 2016 by federal and state departments of labor, attorney generals, and class action settlements.
“These data make it clear that wage theft is a widespread epidemic across our economy and not merely the practice of a few unscrupulous employers,” reads the study.
Furthermore, EPI cited a 2008 survey which found that “43 percent of workers who complained to their employer about their wages or working conditions experienced retaliation.”
Aragon claims that he was fired after alleging the wage theft and Lopez “alleges that he quit because of the wage theft and was therefore ‘constructively discharged.’”
“At first, I was afraid to speak out for fear of losing my job,” said Lopez at a rally held last week, “I thought it would be best to stay quiet, keep my head down and keep working. Now I realize that I have rights and so do all workers. We all deserve to be paid what we are owed.”
“All I want is justice and to be paid for the work that I did,” said Aragon, “we have families to feed and we work hard to provide for them. I think that the fair thing to do is to pay us for all the work that we did.”
