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UPDATE: Wage theft victims could soon get relief

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Posted at 7:00 AM, Jan 18, 2016
and last updated 2016-02-01 15:03:15-05

UPDATE: Six members of Cincinnati City Council voted Monday to support a new measure to stop "wage theft" on city economic development projects.

Wage theft is the term used when an employer refuses to pay workers money that they are owed by stealing their tips, refusing to pay overtime, requiring employees to work "off the clock" or simply withholding pay.

More than 50 people packed Cincinnati City Council Chambers Monday to support the new ordinance proposed by Vice Mayor David Mann.

The measure would apply to any developer that gets a financial incentive from the city worth more than $25,000. If the city or another agency determines the company has committed wage theft, city officials would have the ability to recover the incentives and forbid the company from doing business with the city for a period of time.

"Treating people like slaves is wrong," said Councilman Christopher Smitherman. "It's a conservative principle that your word is your bond. There's no gray area here around political parties, in my opinion."

The full Cincinnati City Council could vote on the ordinance as early as Wednesday. 

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CINCINNATI — Rolando moved his young family from Guatemala to Cincinnati four years ago in search of a better life.

He found it as a construction worker doing steady work and earning enough that he could support his wife and two children and still have money left over for savings.

But then he got ripped off by a man who only paid him $200 of the $600 Rolando was owed for his final month's work. And another boss refused to pay him for two weeks of work after Rolando left for a different job.

Rolando was one of scores of local victims of what is known as "wage theft." That's the term used when an employer refuses to pay workers money they are owed by stealing their tips, refusing to pay overtime, requiring employees to work "off the clock" or simply withholding pay like Rolando's bosses did.

Click here to watch a video about wage theft by the Cincinnati Interfaith Workers Center.

"It's not easy when they steal your salary because we live on the money that we're making every day," Rolando said through an interpreter. "My hope is to get back the money they owe me because I have a family."

Wage theft was the topic of a forum held Friday by the Woman's City Club of Greater Cincinnati at Mount Auburn Presbyterian Church. Rolando spoke there at the request of the Cincinnati Interfaith Workers Center, which is working to help him recover his wages. WCPO agreed to withhold his last name so as not to interfere with his ability to get work.

He told WCPO later that he is the sole breadwinner for his family. When he doesn't get paid, it's his 4-year-old daughter and nearly 2-year-old son who suffer, he said.

He has borrowed money to help buy food and pay his bills and rent. But paying back those loans makes it harder to save when he gets another job, he said.

"It's a very heavy burden," he said through an interpreter. "When they don't pay me, I have to suffer through a lot."

It is, of course, illegal for an employer to steal from its employees by refusing to pay them what they are owed. But the state agency appointed to investigate "wage theft" cases is woefully understaffed, said Brennan Grayson, director of the Cincinnati Interfaith Workers Center. And federal authorities only go after companies with a lot of workers who are affected, he said.

For workers who are victims of wage theft, the situation can feel pretty hopeless.

That could change soon with a city ordinance that Cincinnati Vice Mayor David Mann plans to introduce in the coming days.

David Mann

If adopted, the ordinance would apply to any developer that gets a financial incentive from the city worth more than $25,000, whether that's a loan, tax abatement or grant. If the city or another agency determines that the company has committed wage theft, city officials would have the ability to recover the incentives and forbid the company from doing business with the city for a period of time.

"The fact is that a construction project doesn’t occur in the city these days without the developer coming to talk to the city and at a minimum getting a tax abatement," Mann said. "We want to make sure that people we do business with who benefit from our dollars follow the rules."

'A Big Hammer'

That's important for moral and economic reasons, Mann said.

Cincinnati's persistent problem of childhood poverty is made worse when children's parents aren't being paid what they're owed.

And the employees most often hurt by wage theft are workers in low-wage industries and immigrants, Grayson said.

In the case of undocumented immigrants, they have the same rights under federal employment law as U.S. citizens, Grayson said. But if they are fired as a result of discrimination, they don't have the right to be reinstated. That's because a 2001 U.S. Supreme Court decision determined federal immigration laws take precedence over labor laws, he said.

But there's a financial incentive for the city, too.

When workers are paid less than they are owed or are paid improperly as "independent contractors" instead of employees, the city gets reduced payroll taxes as a result. And the city uses those payroll taxes to fund basic services.

Mann and Grayson said they hope if the ordinance is approved, the threat of losing city incentives and being barred from working with the city would help create a culture of compliance here.

"That's a big hammer," Mann said. "And this would enable the administration to use it."

Mann said he expects to file the ordinance sometime the week of Jan. 18. After it's filed, it could take several weeks for the measure to make its way through City Council's committee structure.

Still, Mann is optimistic that he will have the support he needs on City Council and from Mayor John Cranley to get the measure approved.

When asked at the Woman's City Club event what the argument could be to vote against a measure that requires companies to follow the law, Mann quipped: "It's related to the argument that there's no climate change."

The Cincinnati Interfaith Workers Center's Just Pay Cincy campaign has been advocating for some time to stop wage theft in the region. Mann's chief of staff, Pete Metz, worked closely with Grayson on the ordinance that Mann will introduce.

Over its 10-year history, the center has helped workers recover more than $1 million in wages, Grayson said. Based on studies conducted in other cities, he estimates Greater Cincinnati workers lose as much as $50 million each year to wage theft.

"It's really very simple," Grayson said. "Everybody should be paid for every hour that they work."

Brennan Grayson speaks at the wage theft forum.

For more information about the Cincinnati Interfaith Workers Center, click here. For more information about the center's Just Pay Cincy campaign, click here.

For more information about the Woman's City Club of Greater Cincinnati and its emphasis on addressing income inadequacy in the region, click here.

Lucy May writes about the people, places and issues that define our region – to celebrate what makes the Tri-State great and also shine a spotlight on issues we need to address. Childhood poverty is an important focus for her and for WCPO.

To read more stories by Lucy, go to www.wcpo.com/may. To reach her, email lucy.may@wcpo.com. Follow her on Twitter @LucyMayCincy.