Category Archives: Wage Theft

NWJP wins important court decision implementing new law in construction

A chronic problem in the construction industry in Oregon has been the use of “labor contractors” to recruit workers for tasks like roofing, framing, drywall and painting. These recruited workers are typically misclassified as employees of the labor recruiter, not the construction contractor. This allows the construction contractor to avoid liability for paying the wages of those workers who make their project possible. The labor recruiter often doesn’t have enough money to pay wages, and historically, it was extremely difficult to collect from the construction contractor.

A few years ago, working with our partners in the Oregon Coalition to Stop Wage Theft, our clients achieved a major improvement in the law when the legislature applied the Oregon Contractor Registration Act (OCRA) to the construction industry.  OCRA requires that construction contractors only use labor recruiters who are licensed by BOLI and have posted a bond to guarantee payment of wages. Under this law, it is the responsibility of the construction contractor to check licensing and only hire reputable subcontractors to recruit their work force.  If they don’t check the license, construction contractors are explicitly liable for any wages and statutory damages owed to the workers.

Most construction companies have seemed to be either unaware of OCRA or ignoring their obligations under it.

In March, NWJP clients won an important ruling in federal court on OCRA claims.  The case involved five roofers who were not paid for a number of weeks of work.  They had demanded their wages from the roofing company as well as from the unlicensed labor recruiter.  Neither entity was willing to pay the full amount of wages owed.  NWJP represented the workers to sue both the labor recruiter and the construction company to collect what they were owed.

Two years after the roofing work was performed, NWJP attorney Kate Suisman successfully argued that the roofing company had failed to find out if the labor recruiter it used was licensed.  In the first written opinion applying OCRA to the construction industry, Judge Michael Simon of the US District Court of Oregon found that the large roofing company was a joint employer of Plaintiffs, had used an unlicensed labor recruiter in violation of OCRA and was therefore liable to the workers for wages and penalty damages.  The ruling in this case shows that construction companies who use unlicensed labor recruiters can be held liable for workers’ wages and substantial penalty wages under OCRA.

In fighting their case, these workers hopefully have gotten the attention of the construction industry, and have established a precedent that will help many workers in the future.

Holding County Contractors Accountable

Danya Moodabagil is one of our fabulous paralegals. She also acts as a volunteer for the Multnomah County’s Labor Compliance Program (LCP). Still in its pilot phase, the LCP was launched in 2019 and was modeled on a program at the Los Angeles Unified School District. This program will be a way to ensure that contractors on County construction projects are in compliance with all labor and wage requirements.

Wage theft and wage and hour violations are especially prevalent in the construction industry. Due to numerous accounts of these violations on the part of contractors in Multnomah County, the Labor Compliance Program is the county and community’s response to defending workers’ rights to a prevailing wage.

The LCP team will be staffed by a Labor Compliance Officer and up to 10 community volunteers. Teamed up in pairs, volunteers will interview workers and inspect the site for key violations. While volunteers do not act to directly enforce labor compliance, their job is to verify that all county employed contractors are following the prevailing wage laws and wage and hour laws when paying their workers and ensuring that all construction sites are in compliance. All forms and reports are submitted to the Labor Compliance Officer, who will then forward non-compliance reports on to the Bureau of Labor and Industry. After completing training and orientation, Danya received her first county site visit request last month, and she will be conducting many more visits throughout the year.

The Labor Compliance Program hopes to prove the necessity of this work and that guaranteeing labor compliance on all County projects will ensure better protections for our local construction workers!

Terry Lansing from the Bakers’ Union Asks You to Support NWJP

As we wrap up this turbulent year, we want to share accounts of our collaboration with a few of our partners in the fight against worker exploitation.

First up is Terry W. Lansing from the Bakers’ Union:

Dear Supporter of Workers’ Rights --

I am writing to share a small example of the work that NWJP does and how it brings about big changes for all Oregon workers and their families.

Throughout the year 2015, the Oregon AFL-CIO and the National AFL-CIO worked with our Bakers & Grain Millers Local 114 in an ambitious campaign to assist the workers employed at Portland Specialty Baking (PSB), to join together to form a Union to improve their wages, benefits, job safety, and other concerns.  Of the 188 workers at this bakery, almost all were immigrants and refugees, and for many, this was their first job in the United States.  Over a dozen languages were spoken among the workforce. This bakery was profiteering from the labor of some of the most defenseless workers in our society. Preying on language and cultural differences, PSB maintained difficult working conditions, long hours, and brutal and shifting schedules.

While our mass meetings with multiple translators were effective, the company-hired union buster was just as effective at intimidating the workers with lies such as the union would take away all of their vacation pay if they got fired. In the end, the union buster successfully scared the workers away from joining together, but there were many heroic workers who would not stand down.

That is where NWJP came in.  In interviewing these bakery workers, the NWJP attorneys made a startling discovery:  the Oregon Bureau of Labor & Industries (BOLI) was giving erroneous instructions to all manufacturing employers regarding how to pay overtime under Oregon law.  Workers were being shorted overtime wages.  There are two Oregon overtime laws for manufacturing:  overtime after 10 hours in a day; and overtime after 40 hours in a week.  BOLI instructed employers to only pay the higher of the two, not both overtime wages independently.  And this has been going on for decades.  NWJP argued that this is not right and stated their case to BOLI.  And Oregon BOLI agreed, and revised the instruction to employers.

If a worker in manufacturing worked 11 hours for 5 days, under the wrong instruction, the worker would get paid 5 hours of overtime.  Under the NWJP discovery, the worker would get 9 hours of overtime.  This was a huge win by NWJP for all Oregon manufacturing workers.  But like anything else, it does not end here.

When BOLI issued the new instructions, the business community erupted in outrage.  Their lobbyists immediately petitioned the Oregon Legislature for relief and a return to the original instructions.  Thus began a political journey spearheaded by the Oregon AFL-CIO and working with the NWJP attorneys to protect the new instructions or get something better.  It was a bruising 2016 legislative session of proposals and counter proposals.  The end result:  the Legislature gave back the previous overtime pay rule, but in exchange the Legislature approved HB 3485 which enacted strict limits on mandatory and permitted hours in a work day and work week with a $3000 penalty per incident (a law with real teeth in it).  But the law went further: in recognition that labor unions are the true voice of a group of collective workers, the law exempted employers with a represented work force so they could negotiate for themselves what works best.  If employers with non-union work forces did not like these new restrictions, these employers could recognize their workers in a Union and negotiate something different.  This was another huge win for workers in manufacturing, because once Union, they could negotiate all terms and conditions of work.

In addition, NWJP also filed a class action law suit on behalf of all Portland Specialty Bakery workers, past and present, regarding numerous other legal violations, and this is ongoing.

You can see how much energy and work NWJP does on behalf of all workers.  In this example, what started as a drive to assist the most defenseless of workers, ended up being a progressive change to Oregon work week laws for all of Oregon’s manufacturing workers. 

Please support the Northwest Workers' Justice Project for all they do.

Respectfully,

Terry W. Lansing
Secretary Treasurer
BCTGM Local 114

Terry gives NWJP a great deal of credit, but it’s only because of the partnerships with organizations like the Bakers’ Union that we are able to make significant advances like this.

With your support, we can develop even more partnerships, and win even bigger battles! As we saw in the recent election, the Northwest is ready to lead the way – we soundly defeated the anti-immigrant Measure 105, and elected pro-worker candidates at all levels locally. But we certainly have our hands full if we want to build a better future for all workers.

As NWJP celebrates our 15th anniversary, we are asking everyone to join us as we commit to another 15 years of solidarity. I am hoping that you will help us by donating $15 a month to support our ongoing work.

Sincerely,
D. Michael Dale

P.S. NWJP is a non-profit that receives no funding from the government, and depends on the strong support of champions for justice like you in order to stand with workers like those at Portland Specialty baking. You can help by donating online to the NEED Fund to support NWJP’s work at www.nwjp.org/get-involved


If you would like to make a non-tax-deductible gift directly to NWJP, please send a check made out to "NWJP" to 812 SW Washington, Ste. 225, Portland, OR 97205. Tax-deductible donations to support our work can be made to our 501(c)(3) partner, NEED Fund.

Hotel Housekeepers Finally Win Hard-earned Wages

Ana and Marina (not their real names) worked cleaning a motel in North Portland for many years. For much of their time there, they earned minimum wage for their work cleaning guest rooms. As part of their duties, they were also expected to do the motel laundry. They didn't receive an hourly wage for that work, but rather a lump sum payment with every paycheck that did not even approach minimum wage. They did not receive overtime pay, though they regularly worked 7 days a week. Their employer tried to disguise its wrongdoing by paying only some of their hours on their paycheck, and the rest in cash or personal checks, often accompanied by an accounting of sorts on a small slip of paper that only further confused the workers.

After receiving complaints, the US Department of Labor investigated the motel for wage and hour violations in 2013. The motel owners pressured Ana and Marina to lie to the investigators about the hours they worked. The DOL ultimately approved a small settlement for a short time period of federal violations, but did not address the systemic problems with the motel's pay practices. The owners were undeterred, and did not improve the motel's pay practices going forward.

When Ana and Marina finally left their jobs at the motel, after a series of conflicts and escalating threats by the owners, they came to NWJP looking for help, arriving with a briefcase full of records dating back to 2008. After more than a year of litigation in federal court, NWJP was able to negotiate a settlement with the motel for $60,000. Both clients were pleased to have the motel make some amends for the many years in which they were underpaid and overworked.

NWJP Fights for Workers on Many Fronts

NWJP recently submitted an amicus or "friend of the court" brief to the United States Supreme Court on behalf of truck drivers and workers' rights organizations in New Prime v. Oliveira, a case dealing with forced arbitration as it applies to truck drivers.  Public Justice, a public interest law firm, had successfully argued in the First Circuit Court of Appeals that truck drivers are not covered by the Federal Arbitration Act (FAA) and could therefore litigate their workplace complaints in court despite having been forced to sign an arbitration agreement.  (NWJP recently opened a clinic to help workers who are forced to arbitrate- see link.)  But the Supreme Court accepted certiorari of the case, meaning the justices agreed to review it next term.

NWJP attorney Kate Suisman, working with Nieves Bolaños of Potter Bolaños, a Chicago firm, wrote a brief supporting the decision of the First Circuit from the point of view of other impacted truck drivers.  The attorneys contacted truck drivers across the country to collect their stories.  Many of these drivers are misclassified as “independent contractors” and therefore don’t receive most of the benefits we associate with employment: job security, overtime premiums, workers’ compensation insurance, unemployment insurance and many others.  Instead, these workers have to buy or lease their own truck and pay all its expenses.  Some truck drivers work full time or more and still can’t afford to pay their rent.

In New Prime v. Oliveira, the trucking company is arguing that its truck drivers are independent contractors, and therefore not covered by the provision in the FAA that says the Act does not apply to “contracts of employment” of certain transportation workers. Kate and Nieves’ brief showed the many ways that the amicus drivers are treated like employees, and the uncertainty and difficulty they face as misclassified workers.

You can read the workers’ stories and the rest of the brief here.  The workers’ stories start on page 26.

Introducing Maggie Black and the Low-Income Worker Housing Stability Project

The Low-Income Worker Housing Stability Project will aim to address what the Willamette Week* classified as the "thorniest problem" that Oregon faces: homelessness, and lack of affordable housing. Complementing what we already know to be true about employment law, we aim to concretely prove a connection between wage theft (and other forms of employment abuse) and housing instability. Then, we will muster evidence to prove that implementing a small, revolving loan fund, with the loan secured by the client’s ultimate civil recovery, would be an effective strategy to preserve family housing during the interim of fighting a wage theft case.

We are pleased to announce that Maggie Black has been hired to coordinate this project. Originally hailing from Fairbanks, Alaska, Maggie moved to Portland in 2011 and graduated with a BA in Spanish Literature from Reed College in 2015; she is fluent in Spanish and English. After having worked directly with people experiencing homelessness on housing initiatives, she is excited to further pursue the investigation of housing as a key player in the cycle of poverty— and particularly how violations in the workplace may trigger these issues. Together with NWJP staff, she will be researching the ways in which wage theft directly contributes to homelessness. Her project will include analysis of the devastating effects of loss of income leading to loss of housing, via community discussions; client testimonials; and frank, honest conversation regarding the often seemingly despairing intersectionality of wages and the rising cost of rent.

If you are someone who is interested in being part of the conversation or has personally experienced a loss of a home as a result of unjust workplace circumstances, please do not hesitate to reach out to Maggie or the rest of the staff at Northwest Workers’ Justice Project.

New Anti-Wage Theft Law with Real Teeth Starts to Take a Bite out of Wage Theft in Construction

In our March eNews, we wrote about filing suit on behalf on Tomas and Matthew.* Tomas and Matthew worked for a small construction labor contractor, who hired them to perform manual labor on a general contractor’s projects. After a few months of work, their paychecks started bouncing, and then the boss started avoiding them. Ultimately, they were left unpaid for months of work.

When we last updated you on their case, we were hopeful about the impact that a law we worked hard to pass in 2013 might have on their case. And we are excited to announce that we were right!

HB 2977 amended an existing law that protected farm and forestry workers to also include the construction industry. This law, called the Oregon Contractor’s Registration Act (OCRA) now requires lower level construction contractors—those that supply workers but don’t provide building materials or heavy equipment and don’t take out the building permit—to get a license from BOLI. (We call these contractors “labor brokers.”) To get a BOLI license the labor broker must post a bond, which unpaid workers would be able to tap to collect their wages. But labor brokers are notorious for flaunting the law - stealing wages, misclassifying workers as independent contractors, and then disappearing or running out of money before they can be held accountable. So what good does it do to add additional requirements for them to ignore?

The real lynchpin of HB 2977 is that it makes construction contractors who knowingly use unlicensed labor brokers liable for the actions of the unlicensed contractor. So responsible construction contractors now have a choice: hire a licensed labor broker and know they are dealing with a quality operation, or, hire an unlicensed labor broker and risk having to pay the workers’ wages (and various other substantial statutory penalties) themselves if the broker fails to comply with the law.

Due to the recent slump in the construction field, compliance with the law has been slow to catch on. But this fall we were able to secure a sizeable recovery from the general contractor who contracted with the unlicensed labor broker who hired Tomas and Matthew. With this settlement, we won justice for Tomas and Matthew. But just as importantly, we were also able to begin the process of educating general contractors that hiring unlicensed labor brokers puts them at risk. Because nothing helps spread the word like a general contractor who finds himself holding the bag.

*Not their real names

Restaurants Need to Do More Than Ethically Source Their Food

Leonora and Fernando* came to NWJP with an all too common story. They worked in a restaurant, as a cook and dishwasher. For years they had worked long hours, six to seven days a week, doing whatever needed done behind the scenes in the restaurant to bring amazing food to the table on sparkling clean dishes.

Despite their tireless work their paychecks never quite seemed right. They were paid for most of their time, though not the 15-20 minutes they were often required to come in before their shift. And they were not paid an overtime premium for any of their many hours over 40 in a given week.

This is one of the most common stories we hear at NWJP. The Oregon restaurant industry is thriving; it has brought innovative, delicious, and ethically sourced food into the spotlight. But it also has a serious problem with wage theft, especially among those workers that are tucked away behind the scenes, often invisible to customers.

Fortunately Leonora and Fernando's story ends well. Confronted with the evidence, the restaurant owner quickly acknowledged her wrongs and we were able to negotiate a resolution that resulted in our clients receiving all their unpaid wages, and significant penalties, as well, to help compensate them for the time and energy they had to put into enforcing their rights.

Not all workers are as successful in fighting their exploitation. Which is why we have to find a way to improve the food scene in Oregon from the inside out and make treating workers ethically as important as finding ethically sourced ingredients.

*Not their real names

Temporary H-2B Rock Splitter Resolves Wage Dispute

A few months ago we told readers about a  case  brought by a temporary foreign worker imported to Idaho and Utah to work in the mountains splitting and packing granite rock under a temporary H-2B visa. The H-2B regulations required that the employer pay the worker a prevailing wage of $9.18 per hour, with time and a half for overtime. The reason for this requirement is to protect the wages and working conditions of U.S. workers from being undermined by the use of temporary foreign workers under substandard conditions.

However, workers at the mountain quarries involved in this case were paid on a piece rate basis, without any compensation for the many hours of overtime they worked. Our client filed suit against the quarry company and its principal owner for violation of the Fair Labor Standards Act and the H-2B regulations in U.S. District Court in Idaho with the able help as local counsel of former NWJP board member Maria Andrade and her associate Chris Christensen from Boise.

This case was recently settled to the worker’s satisfaction.

 

From Michael’s Desk

Photo by Doug Yarrow

As the 2017 session of the legislature draws to a close, it’s perhaps an apt time to assess the state of law-making in Oregon as it affects the most vulnerable workers in the state.  It’s kind of a mixed bag.

An important dynamic during this past session was that the leadership wanted new taxes to close a looming budget deficit, and evidently felt that it was necessary to have business buy-in for whatever taxes were to be passed. During most of the session, this gave the business lobby a huge advantage in being able to kill, modify or stall bills they did not like. Much of the wage theft agenda fell victim to this dynamic.  Many other pro-worker initiatives also were initially stalled.

On the other hand, especially after the talks about taxes finally failed, a number of very important, pro-worker measures were enacted, making this, on balance, a fairly successful session for workers, especially immigrants.  Licensing of building services contractors, the nation’s first law entitling at least some workers to fair scheduling, penalties for making workers submit false wage records, medical coverage for all children in Oregon, regardless of immigrant status, a ban on state agencies disclosing personal data to assist federal immigration agencies, implementation of anti-profiling recommendations, health equity, equal pay for equal work for all suspect classes, and a procedure for formerly incarcerated workers to obtain a certificate of compliance with law in order to find work were all adopted by the end of the session.

These are important advances for working people and should be celebrated.  Legislators involved should be congratulated.

On the other hand, the legislature in many respects failed in the task of making sure that workers who labor get paid fairly for their work.  Wage theft is a huge and growing problem in Oregon, affecting workers, fair employers and our communities. The bills offered by the Coalition to Stop Wage Theft died in the legislative process.  Workers not paid the minimum wage must still confront the risk of having huge attorneys’ fees assessed against them; efforts to make it easier to collect wage judgments and help for community organizations to help low wage workers through the complicated wage collection process were not enacted.

So it was kind of a mixed bag.