How Santa Clara County is Fighting Wage Theft

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Episode Transcript

This is a computer-generated transcript. While our team has reviewed it, there may be errors.

Ericka Cruz Guevarra: I’m Ericka Cruz Guevarra, and welcome to The Bay. Local news to keep you rooted. You would think – hope, even – that if you were a victim of wage theft, that there’s a process in place to help you get what you’re owed. And there is a state agency in California set up for that. It’s just the process doesn’t always work the way it’s supposed to.

Farida Jhabvala Romero: There’s only 13 people in the whole state dedicated to helping thousands of these low income workers try to recover that money that the state found their due.

Ericka Cruz Guevarra: Many businesses that have committed wage theft are often able to avoid settling that debt in California. That’s why officials in Santa Clara County have implemented a local solution to this problem by pushing some local businesses to pay up or lose their right to operate today. How one Bay Area County is helping put money back in the hands of workers.

Farida Jhabvala Romero: So I went to downtown Gilroy and it was a couple of months ago.

Ericka Cruz Guevarra: Farida Jhabvala Romero is a labor correspondent for KQED.

Farida Jhabvala Romero: It was really hot and super sunny, and I met a group of people who were doing outreach work, partnering with the County of Santa Clara to educate food businesses in that area about their responsibilities as employers. And one of them was Melissa Sanchez. I have a.

Ericka Cruz Guevarra: For sure for you here to give to the owner, if you don’t mind.

Farida Jhabvala Romero: She would go into businesses and they would, like start chatting. They’re just trying to tell people what’s going on and also let them know about a county program called the Food Permit Enforcement Program and delivering pamphlets about it.

Melissa Sanchez: And your name again? I’m sorry.

Ricardo Rivas: My name is Ricardo.

Melissa Sanchez: Oh, hi, Ricardo. I’m Melissa. Yes.

Farida Jhabvala Romero: One of the people she met was Ricardo Rivas. He’s the manager of a restaurant called Tempo Kitchen and Bar. And Ricardo ended up saying he was very interested in attending the the free training and that he wanted to make sure that the restaurant was treating workers fairly. And then he got information about the food permit wage theft enforcement program as well.

Ricardo Rivas: There’s so many different things involved with between state and county and federal laws, especially as far as labor goes. So being able to stay compliant with it, ensure that we are treating our workers here fairly and accordance to the law is definitely a major importance for us.

Ericka Cruz Guevarra: So Melissa and the people that you were out there following were really out there trying to reach out to business owners about this program in Santa Clara County. Before we dig into it, what is the problem that this program is trying to solve?

Farida Jhabvala Romero: The county started this program because they’re putting some resources down to try to stem labor violations like wage theft, which is when workers are not paid what they’re owed under the law, like meal and rest breaks and overtime, minimum wage. There’s a state agency that investigates those cases When workers complain, it’s called the labor commissioner’s office. There is a list of cases where the Labor commissioner’s office has found that the worker is owed wages by an employer. But many times workers end up not getting any of that money paid. Statewide, the Labor commissioner’s office told us that there are more than 6500 of these cases of people with unpaid judgments that remain open, totaling more than $85 million. And this process, Ericka, can sometimes take years. The state has a very tiny department. It’s called the Judgment Enforcement Unit. They focused on helping low income workers get money back. They’re super understaffed. They said there were 22 positions statewide and only 13 were filled. That means there’s only 13 people in the whole state dedicated to helping thousands of low income workers try to recover that money. People who don’t want to pay will often move money around or put it in somebody else’s name. Close the business, declare bankruptcy. You know, it can be a really long, you know, process. So a lot of people end up just, you know, never seeing that money ever again.

Ericka Cruz Guevarra: This has been a problem that a lot of people have been talking about in Santa Clara County. Right.

Farida Jhabvala Romero: Workers rights advocates in the county have been pushing for years to get more local city and county governments involved. The way they see it, as often, there aren’t enough consequences when businesses are found to owe workers wages.

Ruth Silver Taube: I believe it’s a business model.

Farida Jhabvala Romero: Ruth Silver Taube is an attorney who coordinates the Santa Clara County Wage Theft Coalition.

Ruth Silver Taube: There’s a subset of businesses that just don’t want to pay these judgments because they want to make more money for themselves.

Farida Jhabvala Romero: So these worker advocates, like they’ve been pushing for more local consequences for businesses who have these unpaid judgments with the labor commissioner’s office.

Ruth Silver Taube: We do need more enforcement that that to me, is a huge problem because even if you win, it doesn’t matter. The worker needs that money. We need that money in the worker’s pockets.

Ericka Cruz Guevarra: What role exactly is the county playing in this and what are they doing?

Farida Jhabvala Romero: What the county does is they regularly get a list of all these businesses in the states with unpaid judgments. Then they figure out which ones are food businesses with permits in the county. They target the person named in the in the actual judgment. Then they’ll send the business a letter. And if the business doesn’t respond in 45 days, the county can take their permit to operate away.

Jessie Yu: The county focuses on food from its because we see a nexus between vulnerable worker populations and a large number of labor violations in the food retail industry.

Farida Jhabvala Romero: Jesse Yu heads the county’s Office of Labor Standards Enforcement. The county is in charge of issuing these food permits. So the way they think about it is, well, the businesses need to comply with all the laws, and that includes making sure they don’t have any of these unpaid judgments, that they don’t owe money to the state or workers in the county.

Jessie Yu; That’s exactly kind of where we see we fit in is just really complementing and supporting the federal and state process. Because even though a judgment is issued, sometimes the business doesn’t pay. And so we’re hoping to leverage our food permits to ensure that payment happens.

Farida Jhabvala Romero: It’s definitely a very different message when the county is threatening to revoke your permit to operate, you know, you would have to close your business if you don’t have this permit. And so it is creating more local consequences for for these businesses.

Ericka Cruz Guevarra: As I understand it, this program has actually been pretty successful, it seems like, at getting wages back into the hands of workers. I believe that the number is $125,000. Is that right?

Farida Jhabvala Romero: Yeah. They’ve said they’ve recovered $125,000 so far. It’s definitely, you know, nothing to sniff out, especially for the workers who were able to actually recover, you know, thousands of dollars on wages they were owed. I did get in touch with workers who got money after the food permit program got involved in their cases, but none of them wanted to speak publicly. You know, they did not want to be quoted because they didn’t want to be associated with a wage dispute. And, you know, sometimes their former employers in the same community had one worker tell me that their employer goes to her church. Businesses that paid these judgments after the food permit enforcement program sent them letters. You know, we’re in touch with them. They also didn’t want to be quoted or identified in the story.

Ericka Cruz Guevarra: Zooming out, Farida, I’m curious how unique a program like this is. The people who follow.

Farida Jhabvala Romero: Labor enforcement nationally that I talked to said this was a pretty unique program in the sense that the county is actively trying to identify and reach out to businesses doing investigations of their own, sometimes into a business, and also having this big outreach component. So, you know, it sounds like Santa Clara is trying something new. I heard words like innovative, you know, like pretty unique. That’s how people describe the county’s work on this.

Ericka Cruz Guevarra: Are there other cities that have tried to do something like this?

Farida Jhabvala Romero: Outside of Santa Clara, there’s other types of efforts I’ve seen. Like recently, San Diego County launched a new program called the Workplace Justice Fund. And so what the county is trying to do there is identifying workers who have these unpaid judgments in San Diego County. The county will front them up to $3,000 to help them stabilize financially. And at the same time, the county has its own collections agency, you know, with professional people who do this for a living, you know, And so they’ll take over the workers case, you know, and try to help them recover funds.

Ericka Cruz Guevarra: Well, what would it take to get something like this going on a larger scale for you to.

Farida Jhabvala Romero: I think what would it would take is just counties elsewhere deciding that they they want to try this out. You know, our feeling that this is a big enough problem for them that they that they want to focus on it in this way. You know.

Ericka Cruz Guevarra: Or a big enough priority.

Farida Jhabvala Romero: Exactly. Like the situation of of having workers who’ve gone through this system that is supposed to, you know, help them and also help enforce labor laws. It has a bunch of impacts not just for the workers but for the state as well, because these workers are often really low income. They end up relying on food stamps and other programs that are supported with our tax dollars. Then the state also misses out on payroll taxes. And so it affects people in different ways. And then for the businesses, it’s unfair when a business is following the rules and then, you know, has to spend more money on their workforce following the law. And then they’re competing with businesses that are not doing that. And so it’s cheaper for them. So there’s also an issue of fairness. And leveling the playing field for for business owners is how the county and workers rights advocates and and the folks that are doing this outreach to businesses talk about this problem.

Ericka Cruz Guevarra: Why do you think this is happening now and in this place in particular, Santa Clara County?

Farida Jhabvala Romero: This has been a years long push by people who want to see change on wage theft in this state. It’s the most populous county in the Bay Area. There has been a concerted push there, but also in other parts of the state to get local governments to use their authority to, you know, intervene in this problem, help the state with enforcement of labor laws and see some real change, you know, for for workers who who have been victims of wage theft. And then it also sends a really strong message to businesses in the county and employers that somebody is watching and that there are local consequences.

Ericka Cruz Guevarra: Well, Farida, thank you so much.

Farida Jhabvala Romero: Thank you.

Ericka Cruz Guevarra: That was Farida Jhabvala Romero, a labor correspondent with KQED. This 30-minute conversation with Farida was cut down and edited by producer Maria Esquinca. Alan Montecillo is our senior editor. He scored this episode and added all the tape. And if you haven’t already, please consider leaving The Bay a review on Apple Podcasts. For one, I really like reading them and also it helps other people find our show. The Bay is a production of member supported KQED. I’m Ericka Cruz Guevarra, see you next time.