San Diego employers don’t pay back workers in 70 percent of wage theft cases
Kadie Durocher looked through memorabilia she collected while working at American Voodoo, a San Diego restaurant. Aug. 22, 2016. Megan Wood, inewsource.

San Diego employers don’t pay back workers in 70 percent of wage theft cases

American Voodoo, a short-lived restaurant in University Heights known for its “Cali-Creole” cuisine, was mentioned in several local reviews for its upscale comfort food a couple of years ago. But the establishment was better known by some of its employees for not meeting payroll.

Victims of wage theft often don’t have the resources to fight for pay they are owed.

“The owner had a great way of creating an illusion from the inside, he hired amazing designers, contractors to make the ambience feel like a movie set,” said Kadie Durocher, a former server at American Voodoo. “He lacked common sense of budgeting, when he could barely make his rent or meet payroll.”

Durocher and former coworkers are among the nearly 2,000 low-wage earners in San Diego County who have filed complaints with the state Labor Commissioner’s Office but are still owed wages.

inewsource analyzed 6,553 wage complaints filed with the Labor Commissioner’s Office in the past five years and found that workers collected what they were owed in only about 30 percent of cases that the commission verified.

Worker advocate organizations hope that percentage will improve because enforcement efforts are undergoing restructuring in response to new state and local laws.

A widespread issue

Wage theft occurs when an employer doesn’t pay minimum wage or overtime, asks employees to perform a task before or after his or her regular shift, violates meal and rest break rules, or steals tips.

Data from the state shows that employers in San Diego County owe their workers $2 million in back pay for overtime and meal and rest breaks since 2011. Minimum wage violations account for more than $184,000 due in back pay.

Alor Calderon, director of the Employee Rights Center, a local nonprofit worker rights group, said the number of wage theft incidents is greatly underreported because employees fear retaliation, don’t understand basic rights, and don’t have the financial resources to pursue a complaint.

Wage Theft: Marycruz’s Story

A local restaurant study conducted last year by San Diego State University and the Center on Policy Initiatives, a nonprofit that advocates for working families, surveyed 337 restaurant workers and observed 40 local restaurants. The study found that 77 percent of these workers said they had wages stolen the previous year.

Other investigations

Most California Labor Commissioner’s Office investigations begin when an employee files a formal wage theft claim. Sometimes, however, the office launches an investigation after an anonymous tip. On Oct. 11, one such tip lead to a $1 million finding against Family Residential Care LLC and Del Cerro Assisted Living, a nursing home serving patients with Alzheimer’s and dementia with homes in El Cajon and La Mesa.

The investigation found that the caregivers, many of them recent immigrants from the Philippines, were required to work 24 hours a day, 5 days a week. Some of them had to sleep in patients rooms. During that time, investigators found, the employees were paid $4 an hour and charged $180 a week for food and lodging.

The database complied by inewsource tracks wage theft complaints initiated by specific employees, and does not include anonymous tips such as this one. A spokeswoman for the Department of Industrial Relations, which houses the labor commissioner, said the business owner in this case is appealing the findings.

The San Diego Restaurant Association dismissed the findings of the study because it believed the sample size was too small.  Jill Esbenshade, author of the study and a sociology professor at SDSU, said researchers made it clear the study didn’t represent all of San Diego, but it gave people an idea of what’s happening.

The restaurant association strongly opposes wage theft, said spokeswoman Sharokina Shams. She pointed out that wage theft also harms restaurants that operate properly, because they have to compete with places that unfairly keep money due to their employees.

Durocher, the former server at American Voodoo, said that after her second check bounced she was assured by the owner of the restaurant, Joshua Hamlin, that she would soon be compensated. However, the restaurant closed and eight workers filed complaints for unpaid wages amounting to $77,000.

“I hung on even when I wasn’t getting paid and people quit, because I had given up my unemployment benefits prior to taking this job,” Durocher said.

Efforts to find Hamlin for comment were unsuccessful.

The Employee Rights Center collected 145 surveys of workers and reported in 2015 that more than half of callers with wage complaints were from the restaurant, retail-customer service and janitorial industries.

Years later, no payment

Marycruz Resendiz said she has been cleaning stores in San Diego since arriving in the United States 24 years ago. Resendiz and her husband worked for Violante Services for seven months.

Resendiz said the company contracted with her and her husband, Daniel, but only she received paychecks. She said the amount didn’t cover the time they worked, which was nearly every day from 5 a.m. to 10 a.m. and then from 2 p.m. to 8 p.m. as janitors in clothing stores. Resendiz said her husband worked most of the second shift alone.

She said they weren’t paid at all in the last couple of months they worked.

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Resendiz and her husband left their jobs, and she filed a wage complaint with the Labor Commissioner’s Office, which found that she was due about $15,000. That amount included her husband’s wages and payment for overtime, unauthorized deductions, penalties and interest. Four years later they are still trying to collect.

“I went to court last month and they said my money was in collections, that I had to wait,” Resendiz said. “But, I said, how much longer do I have to wait? Another four years?”

A couple of referrals later she found herself at the Employee Rights Center, which has provided her with legal services. She said she was told recently by her attorney that she will soon be able to see some of that money.

Calderon, the ERC director, said only a small subset of people decide to pursue a wage theft case after consulting with them and getting information about the process and their odds of winning.

“It’s been hard to take time off work to go here and there for the case,” Resendiz said. “But, it’s part of what I’ve done to try and recoup my money.”

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New enforcement tools

Experts told inewsource that navigating wage enforcement can be difficult for workers because they often don’t have the time or money to hire someone to collect on their behalf. But Senate Bill 588, known as the Fair Day’s Pay Act, was signed by Gov. Jerry Brown last October and is supposed to change that in two major ways:

First, employers can now be held personally liable for unpaid wages. Until now, employers could easily shield themselves behind their failed businesses or even open new ones under different names, said Tia Koonse, policy analyst from the UCLA Labor Center.

Second, the labor commissioner can directly collect the assets instead of leaving that up to the worker.

Koonse said elimination of liability loopholes addresses an enforcement issue.

“You would get a judgment and let’s say it was a victory on paper, well that’s it,” Koonse said. “It’s not surprising that we found for the last 10 or 20 years only 12 percent of people have collected wages from their claims statewide.”

San Diego and other cities are trying to implement the new law, Koonse said, but it is in the preliminary stage as investigators are trained how to find an employer’s assets and work with advocacy groups.

Peter Brownell, research director for the Center on Policy Initiatives, said enforcement is a key issue and the Labor Commissioner’s Office has only a small staff to carry it out.

The office is currently hiring for the enforcement division, according to Paola Laverde, a spokeswoman for the Department of Industrial Relations.

The state is working with San Diego to help administer ordinances voters approved in June that increase the minimum wage and require earned sick pay. City Councilman Todd Gloria, who spearheaded the changes, said the city has approved a wage enforcement budget of $400,000.

Worker advocacy groups hope the new city enforcement will create an easier path for workers to file and collect.

The joint enforcement means the city and state agencies will refer cases to one another, share resources and educate employers. For example, the city could refer a case to the state when it feels that certain licenses, permits or contracts should be revoked.

Gloria said the best strategy to reduce wage theft is a robust education campaign, real penalties for deterrent purposes and follow up with the workers who file complaints.
Workers who think they have been shorted on wages can contact the Department of Labor Relations, the Employee Rights Center or the Center on Policy Initiatives.

About this data

inewsource filed public records requests with the state to analyze wage theft in San Diego County. The Department of Industrial Relations replied with data that indicated 6,553 wage complaints had been verified in the last five years. The data includes the amount of back wages the employer paid but it may not include interest, court fees or other penalties due to delays in updating the database.

In analyzing the state data, inewsource identified several dozen discrepancies. State officials corrected them but more may exist.

“Data must be entered manually in this database, so some human error does occur,” Paola Laverne, a Department of Industrial Relations spokeswoman, wrote in an email. “In addition, this is an old database system which has been identified as having multiple problems. The Labor Commissioner’s Office is transitioning to a new database system.”

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About Pilar de Haro:

Pilar de Haro
Pilar de Haro worked as the Dow Jones News Fund summer intern at inewsource. To contact her with tips, suggestions or corrections, please email pilardeharo56@gmail.com.