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Home / Articles / News / Features /  The Unkindest Cut
cover 12.18.12
Anson Stevens-Bollen

The Unkindest Cut

Unscrupulous employers rip off workers’ wages

December 18, 2013, 12:00 am
An honest day’s pay for an honest day’s work has always been a virtuous ethic. Sweat equity and hard labor keeps a roof over your head, clothes on your back and food on your table.

It’s the kind of work that housemaids Marta Dionicio and Maria Chamale have never minded. In their world of extreme circumstances, there’s never been a fast buck. They’re used to toiling with brooms, dirty laundry and filthy toilets from dawn to dusk. Easy Street is across the tracks—in a distant town—far from the reality of their cramped two-bedroom apartment.

Wage theft common in state’s
chile fields

BY JOSEPH SORRENTINO


Victor Medina is a chilero, a chile worker. A slight man of 72, he’s worked in the fields almost his entire life and it shows: He walks bent over with a shuffling gait. One morning in early October, he left El Paso, Texas, where he lives, to pick green chiles in New Mexico. He arrived in Deming at 6 am, waiting an hour before it was light enough to work.

Chileros are paid piece-rate which means they’re not paid by the hour but for how much they pick. This year, it was usually 85 cents for a 20-pound bucket of chiles. Medina filled 60 buckets, grossing $51. According to the receipt the contratista (labor contractor) gave him, Medina worked six hours; his hourly wage was $8.50, a dollar higher than New Mexico’s minimum wage. But Medina actually worked eight hours and his hourly wage was only $6.38. Federal law requires that all workers, including those working piecerate, must earn at least minimum wage. Medina should have been paid $60. Instead of paying that extra $9, the contratista “shorted” Medina’s hours, writing down fewer hours to boost his hourly wage.

It was in no way unusual. Wage theft is rampant in New Mexico’s fields. A recent survey of 253 farmworkers by the New Mexico Center for Law and Poverty found that two-thirds of those surveyed reported having wages stolen the previous year.

Maria Martinez Sanchez, an NMCLP attorney who helped conduct the survey, said shorting hours is the most common way workers have their wages stolen. But it’s not the only way.

Many farmworkers are driven to the fields in buses or vans provided by contratistas. They typically arrive while it’s still dark and wait until it’s light enough to begin picking. According to Sarah Rich, an attorney at Texas Rio Grande Legal Aid, the Portal-to-Portal Act, a federal law, states, “Once (workers) get to the farm and they’re being told to wait, they’re basically there for the employer’s benefit…they should get paid for that time.”

Yet the NMCLP survey found that 95 percent of the workers questioned were never paid for the waiting time. Workers should also be paid for the time they wait for their money at the end of the day. They’re not.

New Mexico’s minimum wage is $7.50 an hour, 25 cents more than the federal minimum wage. Some very small farms are exempt from paying the federal rate, but the vast majority of farmworkers should be paid the higher rate. Almost all the workers interviewed for this project report being paid $7.25 an hour. The difference works out to just a few dollars more a week but it’s significant for chileros who average less than $9,000 a year. “With $8 or $10 extra, I could buy food for my children, pay a bill,” says Jorge Alferez, a 55-yearold chilero from Ciudad Juarez.

A comparison of what Medina earned that one day and what he should have earned is instructive. If he were paid $7.50 an hour for the hours he actually worked and paid for the hour he waited at the beginning and end of the day, he would have earned $75 instead of $51. If he works those hours for five days, he should earn $120 more for the week than he was paid.

At the urging of Martinez Sanchez, the state Department of Workforce Solutions recently sent an email to its staff stating that workers should be paid at least $7.50 an hour and are to be paid for their wait times.

Workers know their wages are being stolen yet they rarely complain. The NMCLP survey found that 93 percent of the time, workers who wanted to complain about working conditions didn’t because they fear retaliation. Juan Adamo, a chilero, summed up why. “All that is important is that we work,” he says. “If we complain, it will make our lives more difficult. I need the little money I do make.”

This article was reported in partnership with The Investigative Fund at The Nation Institute.

The Guatemalan immigrants do what it takes to survive, provide for their families, stay out of debt and put aside for a rainy day whatever they can afford.

When they moved to Santa Fe without documents three years ago, Dionicio and Chamale scrambled to find jobs. A church member referred them to AJ Cleaning Services. Business owners Blanca and Ernesto Talavera, they learned, might hire them to clean homes in Las Campanas during the day and business offices at night.

“We were so happy,” Dionicio tells SFR through an interpreter.

She and Chamale agreed to work for $9.50 an hour—the Living Wage in Santa Fe in 2010. The next day, when the women set off for their first shift of dusting, sweeping and toilet bowl cleansing, they had no idea they were about to become victims of wage theft that would lead to a contentious 26-month fight for nearly $2,000 in compensation.

Even with laws on the books to deter the crime, employees face long uphill battles to collect the money they’re due. Unethical employers act with virtual impunity since enforcement is lacking.

“Wage theft is a big problem in New Mexico and around the country,” says UNM Associate Professor of Sociology Andrew Schrank, who this summer co-authored Mexican Immigrants and Wage Theft in New Mexico, with University of Michigan doctoral student Jessica Garrick.

Results of the duo’s interviews with 210 immigrants at the Mexican Consulate in Albuquerque and mobile consulate in Santa Fe show close to 30 percent of undocumented workers have experienced wage theft. Another 22 percent of immigrants with legal documents to work claimed that their wages have either been shorted or withheld completely at least once.

Yet, the problem isn’t limited to New Mexico immigrants. National labor market analysts say it’s an epidemic that impacts every level of employment and industry sector, including tourism, agriculture, trades and transportation.

Even white-collar professionals have had their incomes pinched.

Wage theft occurs when workers are not paid minimum wage, are forced to work off the clock, have their tips stolen, are not paid time and a half for overtime, are ordered to shift extra hours to a new time period to avoid overtime, or never receive their final paycheck. Even college educated employees can be victims of wage theft. That happens when they’re misclassified as managers and prohibited from earning overtime. Both state and federal laws require employers to pay their staffers at least the minimum wage for every hour that is worked. In Santa Fe, employers have to abide by the local minimum wage , currently $10.51 an hour.

In fiscal year 2013, the US Labor Department’s Wage and Hour Division recovered nearly a quarter of a billion dollars in back wages for workers around the country whose employers improperly denied them pay they had earned. The cases processed during that 12-month period benefited more than 269,250 workers who were owed $250 million in back wages. Nearly a third of that money was secured for low-wage workers.

“Employers who commit minimum wage, overtime and other wage violations deny workers their full hardearned income, and we are committed to ensuring that the money is in the hands of those who worked for it,” says Laura Fortman, principal deputy administrator for the division. “That’s money that they will spend on the rent, on transportation, to put food on the table, and to buy clothes for their kids.”

Since the beginning of 2009, the Wage and Hour Division has closed 145,884 cases nationwide, resulting in more than a billion dollars in back wages for 1,238,589 workers.

Yet, that’s only a fraction of what workers claim they are owed, a figure that topped $30 billion annually in 2008 estimates.

And, not all victims report their pay shortages. People, who are victimized, according to Schrank, are also at significant risks of health and safety violations and often subjected to verbal and physical abuse at the hands of their bosses.

“Employers who violate one labor law tend to violate other labor laws,” he says. “If they’re going to steal your wages they’re also not going to provide safety equipment. In some cases, the bad apples are also going to abuse you.”

Car detailer José Martinez can relate. He and five other workers claim that they were both underpaid and abused for six years by Squeaky Clean Car Wash and Car Spa Services’ owner Jay Ritter and his managers. The workers were eventually awarded back pay.

Customers who drove away with sparkling clean vehicles and new car smells couldn’t have known the generous tips they left behind for Martinez and his buddies never made it into their pockets or paychecks.

“Our supervisors were stealing our tips,” Martinez tells SFR through an interpreter. One manager, Martinez recalls, even thanked him for buying him beers with tip money from the day before.

While state law allows employers to keep worker’s gratuities, a combination of hourly pay and pooled tips must equal at least the minimum wage.

That wasn’t the case at Squeaky Clean. Martinez’s check stubs showed he was making $9.50 an hour, but without the cash tips, Martinez says, he was really only making $5.15 an hour—not enough to pay his bills or feed his first child and then-pregnant girlfriend.

Martinez, who moved to Santa Fe from Chihuahua, Mexico, and started working at the car wash when he was 16 years old, says his money woes weren’t limited to stolen tips. Line employees, he claims, were also forced to work off the clock. Cleaners were instructed to arrive at one of the business’s two locations on Cerrillos Road by 8:15 am, but supervisors wouldn’t clock them in until after the first patrons arrived a few hours later. When customer traffic slowed down, workers were taken back off the clock, but prohibited from leaving the premises.

Verbal and physical abuse from supervisors, according to National Labor Relations Board documents, was routine.

“They’d call us fucking idiots,” Martinez says about the times his bosses got frustrated or mad about equipment breakdowns.

The abuse didn’t stop with swearing. Another worker got sprayed down with a water hose and then forced by supervisors to work outside in cold temperatures. He worked the rest of the day, Martinez says, wearing a sopping wet uniform and boots.

Martinez himself kept quiet about his pay and work environment. For months, he was reluctant to speak up—even when his health began to suffer from inhaling fumes from cleaning solvents he used at work.

“I was afraid of getting fired,” he says. Pointing to the top of his nose, Martinez says he’d get heavy bleeds. On some nights his eyes would be so irritated they stung. The skin on his hands was constantly peeling.

“They didn’t provide us with any protective gear,” says Martinez.

When the workers’ requests for glasses and gloves went ignored the men feared retaliation if they pushed the issue. Others worried managers would act on threats to notify federal agencies that could deport them (not knowing that immigration courts frown on wage theft and often give people temporary visas to pursue their claims).

Even businesses that hire undocumented immigrants are not exempt from labor laws.

“You’re still liable for paying them the minimum wage,” says Schrank.

In the immigrant community, those fears are understandable, he says.

“When you live in a society where you’ve got Arizona Gov. Jan Brewer railing against immigrants all the time, it’s not surprising immigrants are worried,” says Schrank. In New Mexico, he says, migrant workers fear Gov. Susana Martinez will eventually take away their driver’s licenses and their ability to get to work.

Wage theft problems are further exacerbated for workers who live paycheck to paycheck and can’t afford to retain a private attorney to represent their complaints. Desperate for cash, those workers often settle claims quickly and for far less money than they’re actually owed because they can’t wait for their cases to slowly work their way through the Department of Workforce Solutions Wage and Hour Division, or maneuver through the courts.

Most of the so-called “bad apple” employers have learned to play on those concerns.

“They’ve learned to work a system that isn’t sufficiently staffed,” says Schrank.

At the federal level, there’s just one agent enforcing wage laws for every 141,000 workers, and more than half of the states have cut wage enforcement personnel in recent years. And, according to the Economic Policy Institute’s Gordon Lafer, some states have even tried to eliminate those positions entirely.

That’s not the case in New Mexico. The Department of Workforce Solutions (DWS) has eight labor law administrators trained to process wage theft claims, and their work has generated some positive results.

In fiscal year 2013, almost 95 percent of the nearly 800 claims administrators received were resolved, earning workers over a half-million dollars—an increase of 47 percent over three years.

The increase in cases may indicate more people are willing to report their employers—people like Dionicio and Chamale, who tried to get a resolution with the cleaning service last January.

At her DWS hearing, Dionicio testified when she asked Blanca Talavera about getting paid after a week on the job she was told the company only paid its employees once a month. Neither she nor Chamale knew state law requires employers to print paychecks at least every 16 days.

After asking about their wages, records show, the women’s employment situation deteriorated. Chamale got fired after Talavera allegedly accused her of damaging a company car that she says she never drove. After her last day of work, Talavera told Chamale she was going to keep her wages to cover repairs—another violation of state law, since the two hadn’t agreed she’d pay for equipment damages when she was first hired.

With her friend out of work, Dionicio says she eventually decided to quit her job.

“They didn’t have the money to pay me,” says Dionicio. “Blanca told me just to wait; I’d be paid eventually.”

Without paychecks, the women were forced to beg their friends for rent money. Chamale, who was five months pregnant at the time, feared getting evicted by her landlord.

“It was awful. We didn’t have anything to survive,” says Chamale.

“We were angry and didn’t know what we could do,” adds Dionicio.

After scrambling to collect $400, the women got another referral. This time, Dionicio’s longtime partner told them they should ask for help at Somos Un Pueblo Unido’s Worker Center—an immigrant advocacy group founded in 1995 to improve the lives of immigrants. (Somos also collaborated on UNM’s wage theft study and paid for its printing.)

Alma Castro, a community organizer for Somos, wasn’t surprised when she listened to the maids tell their story.

“It’s a tale we hear way too often,” she says. Castro helped the women file claims with Labor Law Administrator Jeremy Garcia. At a hearing he conducted later, Castro introduced a secret recording she’d made during a meeting with Talavera.

On the tape, Talavera argues in Spanish about the wages owed.

“She told them she ‘won’t pay them,’” Castro tells SFR.

When it was her turn to testify, Talavera stipulated Dionicio had indeed worked 110 hours for her company, but used an alias.

That’s not a legal reason to withhold wages, however, according to the US Immigration and Reform Control Act of 1986.

Talavera also swore she’d paid for the women’s labor in cash, but could not provide paycheck stubs or any receipts. State law requires employers to maintain written payroll records for at least one year. Federal law requires records be kept for two or more years.

Garcia ruled in the women’s favor and ordered the Talaveras to pay Dionicio $1,150 and Chamale $750. The administrator even allowed the owners to set up a 12-month payment plan with the state Labor Division.

It appeared the case was over. It wasn’t. Dionicio says she only received one check before the Talaveras backed out of their signed agreement. Chamale has never received a dime for her labor.

Joy Forehand, a deputy secretary at Workforce Solutions, says when the payments stopped, the department got a summary judgment against AJ Cleaning Services, but still hasn’t been able to collect the women’s money. The case will head back to court this spring and the women hope to get a garnishment order. But Ernesto Talavera says he is prepared to fight the women’s claim.

“We didn’t get a fair hearing at Workforce Solutions,” he says.

Talavera claims he has new evidence, and told SFR he’d show it to us the day after Thanksgiving, but never showed up for the appointment or contacted the paper before press time.

For Santa Fe’s Interfaith Worker Justice Organizing Director Rev. Holly Beaumont, wage theft is “becoming too commonplace.”

It is, she says, something that’s even harder for handymen and day laborers to deal with. After getting stiffed, they’re often on their own to collect their wages, because the Department of Workforce Solutions doesn’t have jurisdiction in their cases. The only recourse for people doing odd jobs is to file a complaint in magistrate court or district court if they’re owed more than $10,000.

Bankruptcy can also be a huge obstacle. It’s complex, but the law allows employers, in some situations, to discharge workers’ wages. That’s what happened in Santa Fe in 2011.

Former employees of the now defunct China Star restaurant on Cerrillos Road say they worked up to 12 hours a day without overtime and were only paid $5 an hour; well below the then $9.85 Living Wage. A bankruptcy court originally awarded the restaurant’s workers $8,000, but they’d like to see Fusion Fire Buffet and Grill be held accountable for $622,743 in lost pay. The workers, and their attorney Karl Kalm, also claimed the new restaurant is a “continuing enterprise” operated by the same China Star group of people, but a judge dismissed that allegation in October citing a lack of supporting evidence.

When it comes to wage theft, Beaumont says Santa Feans should adopt a ‘No Tolerance’ policy.

“We should not be supporting any businesses that are stealing wages from their workers,” says Beaumont. “When people’s wages are stolen, they can’t buy gas, groceries and shoes for their children.”

Somos Attorney Gabriela Guzman agrees. She wants policymakers to help prevent more people from becoming victims.

“It hurts our economy and puts businesses that are following the rules at a disadvantage,” says Guzman.

New state laws and city ordinances are helping. Four years ago, New Mexico was one of the first states to pass anti-wage theft legislation after Somos organizers found two legislative champions.

First, in 2009, Rep. Miguel Garcia, D-Bernalillo introduced HB489. It gave workers the right to collect treble damages, extended the claim period from one to three years from the last violation (workers can still collect wages for up to 10 years), and protected employees from retaliation on the job. It also required employers to post cease and desist orders along with workplace notices describing their prior wage violations.

Somos returned to the Roundhouse with new proposals last year.

Along with Rep. Phillip Archuleta, D-Doña Ana, they persuaded Gov. Susana Martinez to sign a measure to expedite wage theft claims.

“We found these cases were taking a long time to be heard,” says Marcela Díaz, the executive director at Somos. “Sometimes it was taking as much as 18 months. Now wage theft claims are at the same level as unemployment claims.”

Despite the improvements, Díaz points to new concerns with DWS. She says the department doesn’t try to collect the maximum damages allowed for employees and hasn’t recognized the three year statute of limitations—often sending people away if their claim is over 12 months old.

“These laws are supposed to be a disincentive for employers and makes sure they won’t continue to violate the law,” she says, adding that the department needs to communicate with claimants in their native language while adjudicating their cases. Currently, claimants only receive correspondence written in English.

“They don’t understand what’s happening with their case,” says Díaz. “That’s caused them to miss deadlines and have their claims closed.”

DWS Secretary Celina Bussey defends her group’s work, but has admitted she needs more resources to confront the problem. An informational campaign, she believes, can identify misunderstandings that “inadvertently result in wage and hour issues.”

To stay ahead of the epidemic, Bussey has directed her staff to work with both employees, employer organizations and various interest groups like Somos and Interfaith Worker Justice in Santa Fe, and El Centro and the NM Center on Law and Poverty in Albuquerque.

“The New Mexico Department of Workforce Solutions takes its role as educator of the state’s labor laws very seriously,” Bussey writes in an emailed statement to SFR.

Education isn’t the only solution. Díaz and Guzman would like to see more lawyers trained to represent wage theft victims. And they’re doing more than talking about it. Last week, Somos co-sponsored a Continuing Legal Education seminar for attorneys with the help of New Mexico Legal Aid in Las Cruces, and last November, Somos teamed up with the nmhba.net/to train 16 more attorneys.

Even as more lawyers get up to speed, state Attorney General Gary King has also been vocal lately about what he calls the “wage theft crisis.” He’s worked with other AGs around the country to make sure national companies are compliant with state wage laws.

“In New Mexico, I’d like to see district attorneys be able to pursue violators,” says King. “It’s a real problem when employees can’t put food on their table.”

He’s not the only frustrated politician. Santa Fe Mayor David Coss says he has been working on the issue for the past eight years. Instrumental in creating the city’s Living Wage Ordinance, Coss now serves on a Wage Theft Task Force with King, Bussey, Beaumont, and community advocates.

The mayor would like to see penalties increased for wage law violators like Squeaky Clean.

“I used to get my car cleaned there, but not anymore,” says Coss.

The mayor who leaves office next spring has been monitoring minimum wage issues around the country and in Albuquerque, where a voter-approved $8.50 minimum wage went into effect earlier this year, and watching what’s happening in Houston, where city councilors just approved a measure to step up sanctions against companies who deny their employees earned pay. Violators there could have their business licenses, city contracts and other permits taken away.

To curb the problem, Schrank thinks the public should see wage theft in the same light as street crimes.

“If we treated those crimes as casually as we treat workplace crimes, the American people would be outraged, but for some reason, because the criminals are employers, we look the other way,” he says.

That approach works for Marcela Díaz. “When employees work they need to get paid,” she says.

That includes employees like Dionicio.

She’s back at work now, cleaning rooms at a casino resort north of Santa Fe. “I’m getting paid on time,” she says, relieved. Now, with a little money put aside for a rainy day, Dionicio musters a smile, and hopes for a White Christmas. This year, she’ll be able to afford to buy gifts for her children.

 

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