More wage theft claims emerge at San Jose housing site

San Jose’s labor compliance department launched an investigation of an emergency housing project after San José Spotlight exposed wage theft allegations in March.

Public Works Director Matt Cano confirmed that the city’s Office of Equality Assurance is conducting a “full review” of contractors that did work at the Monterey Bernal emergency housing site, built with several million dollars in public funds.

“Right now we are looking at every contractor, we’re looking at every contract,” Cano told San José Spotlight. “We’re looking at everybody on the project to make sure we do our due diligence and to make sure all the workers on the project get the money they may be owed, if they’re owed any additional money.”

A San José Spotlight investigation revealed many workers on the project were not paid prevailing wages, the project was ripe with safety hazards, subcontractors flouted the city’s project labor agreements and contractors committed code violations.

South Bay Piping Industry Compliance Director Mauricio Velarde called the project a “cesspool of violations.” San Jose Mayor Sam Liccardo and Gov. Gavin Newsom used the housing site as a backdrop for an October news conference on helping those in need during the pandemic, lauding how quickly it was built.

Days after the article’s publication, Cano said in a memo the city would withhold final payments from contractors until wage theft claims were resolved. The memo also noted that labor compliance was “proactively enforced.” An update to the San Jose City Council on April 30 revealed the department discovered more wage theft violations on the same site.

“Staff has notified the project’s contractors of these potential underpayments and is working diligently to verify this information, while also allowing for appropriate due process for the contractor to respond to the city’s findings,” a report to the council states.

The project’s main contractor is Habitat for Humanity and construction firm Veev is the builder. The report notes that staff working on the investigation cannot respond to specific questions immediately.

“Where (Cano) tried to downplay the violations, now he is acknowledging there is more to see than what he tried to explain,” Velarde said.

Cano said this week it’s unclear how much money workers on the housing project might have lost due to wage theft. The city notified additional contractors last week that they must comply with the investigation and will be required to pay restitution if found guilty of wage violations.

San Jose carpenter Kahree Jahi filed a lawsuit in February with the representation of Justice at Work Law Group. According to records obtained by Jahi’s counsel, workers are owed at least $150,000.

Velarde said the workers he’s talking to don’t know when they’ll be made whole.

“The workers claim that they called and left multiple messages because no one would answer the phone,” Velarde said, “prompting some workers to go to the city office only to be told that they were not on the list. Others tell me that the amount of money is hardly anything.”

If workers have questions on potential restitution, Cano said they should contact the Office of Equality Assurance at [email protected] or by calling (408) 535-8430. All complaints and questions are confidential for worker protections.

Contact Madelyn Reese at [email protected] or follow @MadelynGReese on Twitter.