Pasadena Wage Theft Enforcement Increasing

Graph showing amount of wage theft per year versus other property crimes. – Courtesy Photo / Tvol (CC BY-SA 3.0)

By John Orona

You can lock your door at night, avoid that dark alley, clutch your purse and hide your wallet, but the odds are if you are getting robbed it’s happening at work.

According to an Economic Policy Institute estimate, wage theft – the denial of wages or benefits an employee has earned – costs workers in the U.S. $40 to $60 billion annually, more than robberies and all property crime combined.

In 2016, Pasadena joined the fight against wage theft after its minimum wage ordinance provided the city with an enforcement mechanism to go after businesses not paying the new city-wide minimum wage.

“Employers abuse us by paying us whatever they want,” Soila Muñoz, a bakery worker and house keeper, told the Pasadena City Council through a translator. “They never paid me the legal minimum wage and they mistreated me a lot. I never left because I needed the money,” Muñoz said.

According to a 2014 Department of Labor report, California minimum wage laws are violated 327,000 times every week and more than 10 percent of workers in the state make less than the minimum wage. In 2010 the UCLA Labor Center found that in LA County alone workers lose $26.2 million every week to wage theft, attributing 55 percent to minimum wage violations.

In Pasadena however, there have only been 23 reported cases and about a quarter of those were determined to be unfounded, according to Code Compliance Manager Jon Pollard. Most of the violations were due to awareness issues, with employers believing they fell under the slower rising minimum wage for businesses with fewer than 26 employees.

“Some of the employers that had issues did not know that the city aggregates employees throughout the country,” Pollard said. “So if you have 10 employees in Pasadena [but more in other cities] you might think you’re a small employer.”

Wage theft has an immediate effect on working families, but the economic strain also ripples throughout the economy. Minimum wage violations alone led to more than 40,000 additional California families -115,000 people – being under the poverty line and to a loss of $74 million in federal income tax and $14.4 million in state income tax, according to the Department of Labor.

The CA Labor Commissioner handles wage theft crimes throughout the state but with the 2016 ordinance the city can now deal with offenders on an administrative level while working with state for more serious cases if needed. So far, no cases have risen to the infraction of misdemeanor level.

“After President Trump ascended into power, more people are becoming the victims of wage theft, and our city is no exception,” Executive Director of the National Day Laborers Organizing Network (NDLON) Pablo Alvarado told City Council. “There are more people coming forward to the workers center with cases of wage theft but there are less people willing to go through the process because of the widespread fear in our communities,” Alvarado said.

NDLON runs the Pasadena Community Jobs Center and has contracted with the city to provide outreach and education to communities that wouldn’t normally interface with a government agency to make sure workers know their rights. The NDLON and the city are also partnering with the Pasadena Chamber of Commerce to make sure businesses know their rights and responsibilities.

The total amount of wages recovered from the city’s new enforcement program was not available but Alvarado estimates that about $72 thousand in unpaid wages have gone back to workers in the city.

The city will be ramping up its awareness campaign ahead of the July 1 minimum wage increase.

“It’s not the city’s objective to penalize a business owner,” Pollard said. “But that’s the risk they face.”