Working “Off the Clock”- How Employers Steal Wages

Check out this short film on Wage Theft by Brave New Films!

Victory! SB 588 Signed into Law

On Sunday, October 11, 2015, Governor Jerry Brown signed an historic worker’s rights bill into law. SB 588, the Fair Day’s Pay Act, will give millions of dollars back to working individuals and their families by cracking down on wage theft.

Wage theft is a pervasive trend in the low-wage industries in which many low-wage and immigrant workers toil. It is the illegal practice of not paying workers for all, or any, of their work.

While California has some of the most protective laws in the country, low-wage workers are not immune to wage theft. In Los Angeles alone, low-wage workers lose $26.2 million in wage theft violations every week, making it the wage theft capital of the country.

Under previous state law, employers could get out of paying employees stolen wages in many different ways, by exploiting loopholes in existing law. For over three years, the Wage Justice Center, along with 60 other organizations across California, fought to pass a bill that would close these loopholes in existing state labor laws.

The Fair Day’s Pay Act creates new tools needed to put stolen wages back into workers’ pockets. It sends a strong message to employers that California supports its workers, their families, and businesses that play by the rules rather than exploit the system.

The Wage Justice Center is looking forward to implementing the Fair Day’s Pay Act to ensure that all California workers are paid fairly.

Wage Justice Center Fights Shell Corporations

The Los Angeles Times recently published an important article highlighting some of the root causes of the current wage theft crisis.

Quoting our director, the article discusses the rampant problem of shell corporations.

 

Los Angeles and Long Beach Port Truck Drivers File Class-Action Lawsuit to Recover Stolen Wages

The Wage Justice Center filed a class-action lawsuit on behalf of an estimated 100 port truck drivers who were mis-classified as “independent contractors” and systematically denied basic labor protections.

The drivers allege serious violations, including nonpayment of minimum wages, by a cluster of intertwined companies operating under various names, including: “QTS, Inc.”, “WinWin Logistics Inc.”, and “Laca Express Inc.”

The lawsuit, filed with the Los Angeles Superior Court on February 22, 2013, alleges that drivers worked punishing hours while frequently earning less than minimum wage due to illegal paycheck deductions.

The lawsuit also alleges a violation of a new state law that prohibits willful mis-classification of employees as independent contractors for the purpose of evading labor protections.

Plaintiff Cuahutemoc Cabuto explains: “I filed this lawsuit because I wanted to fight back against the injustices at this company. I work all the time, day and night, and have no money left to take home after all the deductions the company takes out of my paycheck.”

The vast majority of truck drivers working in the Ports of Los Angeles and Long Beach, the largest port complex in North America, are classified as independent contractors. Advocacy groups such as the Los Angeles Alliance for a New Economy (“LAANE”) and the Coalition for Clean and Safe Ports contend that most of these drivers are mis-classified.

Driver mis-classification allows law-breaking companies to reduce costs by 30%-40%, as they do not pay payroll taxes, giving them an unfair advantage over law-abiding companies. Additionally, drivers are deprived of key rights, including minimum wage, unemployment, and the right to form a union.

Workers like those who filed this lawsuit are demanding fair treatment and respect for their basic legal and human rights.

Car Wash Workers Stand Up Against Melrose Strip Car Wash

On October 26, 2012, the Wage Justice Center helped five workers at Melrose Strip Auto Detailing & Car Wash–located along a posh section of the famous Melrose Strip–file a lawsuit for years of unpaid wages and other labor violations.

The workers are asserting claims for unpaid minimum and overtime wages, and denial of the minimum rest and meal breaks – these are basic rights of every California worker. Many workers report being paid a flat daily rate that amounted to well below our minimum wage.

On November 9, 2012, several other workers joined the case, bringing the total claimants to nine. Workers are seeking back-wages for themselves and all of their co-workers, as well as an injunction that would prevent similar labor violations in the future.

Today, November 28, 2012, the workers stood up to the car wash publicly, announcing their lawsuit at a press conference and helping identify management for the purpose of serving the complaint.

We are honored to stand beside these brave individuals who have taken a stand against exploitation in LA’s carwash industry.

Wage Justice Wins Successor Case

Wage Justice Center wins a victory in successor liability case.

On November 1st, Los Angeles Superior Court judge Ralph Dau upheld a claim seeking to hold a machine shop liable for wages owed by a successor business. The employee’s claim stemmed from unpaid overtime wages that was already found to be owed by the California Labor Commissioner.

Unfortunately, the company ordered to pay these wages (“High Performance Tool Grinding, Inc.”) has ceased doing business and is listed as a “suspended” corporation by the secretary of state.

Despite this status, the machine shop continues to operate with largely the same employees, customer-base and management, under an almost identical name (“High Performance Tool Grinding, LLC” ).

While our client’s claim was pending before the Labor Commissioner’s office, the assets of High Performance Tool Grinding, Inc were sold to High Performance Tool Grinding, LLC.

The Wage Justice Center filed suit in July seeking to have the new company held responsible for paying the wages owed to our client. The court’s recent ruling allows this case to move forward in the face of the company’s request that the case be dismissed.

Wage Justice Center Provides Training to NELA Members

Wage Justice Center provides training to members of the National Employment Law Association in Washington DC.

On October 22, 2011, Wage Justice Center Director Matthew Sirolly led a training on wage judgment enforcement and bankruptcy issues at the National Employment Law Association’s recent conference on wage and hour law: “Securing Wages, Protecting Hours: Representing Workers In Individual & Collective Actions Under The FLSA.”

The Wage Justice Center co-sponsored this conference and appeared as part of a panel (“Cases In Crisis: Collecting Judgments & Strategies for Bankruptcy”) discussing the enforcement of wage judgments.

$85,000 Justice for Janitors

The Wage Justice Center obtained an $85,000 judgment against a real estate business that failed to pay its maintenance workers.

Two former janitors, who had provided cleaning services for a real estate business that owns numerous apartment buildings throughout Los Angeles, prevailed in court. At one time, this business held a real estate portfolio valued at more than $70MM.

Despite this business’ sizable real estate assets, the workers had not been paid their wages. Nor had the workers been able to collect on a judgment for their unpaid wages that was issued over two years ago by the California Labor Commissioner.

The Labor Commissioner had entered judgment against an asset-less shell corporation (“101 Services, Inc.”) that had apparently been set up to insulate the business’s real estate assets from liability of employee claims. Thus, a judgment against this shell corporation was unenforceable.

When the Wage Justice Center became involved, we realized a new lawsuit needed to be filed to hold the real estate corporations and their owners liable.

This victory is a judgment against one of the corporations that has title to the defendant’s real estate.

With this victory, the workers can now start to collect the wages they are owed!