City may bring new scrutiny to wage theft

Jul. 24, 2013The Houston Chronicle

The Houston City Council may step up its efforts to combat wage theft, sanctioning companies that deny workers pay to which they are entitled and monitoring firms accused of doing so, regardless of whether they do business with the city.

City Attorney David Feldman laid out a proposed ordinance to a City Council committee on Tuesday, receiving a generally positive reaction from council members and worker advocates, who flooded the chamber in yellow or teal T-shirts, representing the Fe y Justicia Worker Center and Texas Organizing Project.

Workers who believe they have been improperly denied pay can file civil complaints with the Texas Workforce Commission or in a justice of the peace court, or pursue criminal complaints with police or prosecutors. Feldman said most workers who file complaints choose the state agency.

The city’s best chance to help, Feldman said, is to create a database of companies found guilty of wage theft and to keep a watch list of firms accused of the practice, in the hopes of using its leverage as a source of contracts, permits and licenses as a deterrent.

“Obviously, we do have a large amount of buying power, purchasing power, a large number of contracts, and, obviously, we want to make sure the city of Houston says, ‘We’re not going to be doing business with somebody that’s found to be guilty of this type of activity,'” Councilman Ed Gonzalez said.

Existing city rules state that firms who commit wage theft can be barred from city work, but do not specify how the city would identify offending companies, Feldman said.

The proposed ordinance would empower a wage theft coordinator to maintain the database of offending firms and update the watch list of accused companies, investigate complaints involving city contracts, counsel workers who file complaints against Houston companies not working for the city, and monitor City Council agendas to see if a company up for a contract appears in the database or watch list.

A firm found guilty of wage theft in an administrative or legal proceeding would be ineligible to work for the city and would be unable to receive or renew city permits or licenses. A city department director wanting to grant work to a firm on the watch list would need to review the situation before forwarding the request to the council.

Firms would be removed from the watch list if a complaint is ruled unfounded; companies in the database could be removed if a conviction is overturned on appeal.

“The city needs some involvement in addressing this problem and, to be candid, I tried to take the envelope as far as I could with this ordinance without getting us into the business of creating a separate agency where we were investigating complaints all over the place,” Feldman said.

Of the council members present at the public safety committee meeting, most welcomed the proposal. Councilman Jack Christie said, “It’s obvious something has to be done.”

Councilman James Rodriguez added, “Anybody that is going to cheat workers should not be allowed to do business or have city contracts.”

Jeff Nielsen, of the Houston Contractors Association, said much of the effectiveness of the proposal likely would rest with the coordinator position. Nielsen said he is concerned about fraud – the possibility of laborers walking off the job and claiming they were unjustly stiffed – but said those qualms likely will not lead him to seek changes to the proposal.

Fast-food worker Olga Castro said she works 65 to 75 hours a week without overtime pay.

“I’m not here because of the wages my employer owes me,” she said. “I’m here because of the impunity and lack of consequences for employers like this. Many employers are committing violations of the law without receiving any penalties.”

Stan Marek, of the Marek Brothers Co. Inc., and a Greater Houston Partnership board member, said most Texas construction workers are paid in cash and get no worker’s compensation. He said the proposal should ask more of contractors.

“This is happening in my industry, and I’m ashamed of it,” Marek said. “Many of our workers are not going to come in and say, ‘I’m being taken advantage of.’ Why? Because, No. 1, they want their job, and maybe they do have a status problem. This is a huge problem for the city, for the state, and if we don’t do something about it, we won’t have a sustainable labor force for the future.”

Feldman agreed many wage theft victims do not come forward because they have status problems, adding, “that doesn’t mean that they’re any less entitled to be paid for their work.”

Richard Shaw, of the Harris County AFL-CIO, said the number of wage violations in the Houston area tops 100 a day.

“Just the deterrent alone will stop a lot of this, once they realize someone will hold them accountable,” Shaw said.