San Jose to expand wage theft policy as Silvery Towers contractor goes to court

In the wake of federal proceedings against an unlicensed Hayward subcontractor accused of holding more than a dozen workers in San Jose against their will, city lawmakers on Tuesday prioritized expanding wage theft protections to construction workers.

The move comes as part of an increased effort to crack down on battling wage theft, human trafficking and other workplace mistreatments since subcontractor Job Torres Hernandez was allegedly found harboring undocumented immigrants in slave-like conditions at the Silvery Towers construction site in late 2017.

The city’s current wage theft protections exclude the construction industry and private development. The new proposal would expand the policy to include those workers. The policy will mandate that contractors sign a form ensuring that they’re complying with the law and disclose previous wage theft violations before being issued a business license, allowing the city to deny new permits to contractors with outstanding violations or avoid hiring them on publicly-funded projects.

“When I heard about this I wanted to do anything in my power to stop that from ever happening again,” Downtown Councilmember Raul Peralez said Tuesday.

Hernandez’s trial began Monday in Oakland, where government prosecutors accused Hernandez of recruiting workers from a newspaper ad in Tijuana and misleading them by promising secure wages and legal status in the U.S. Once in Hayward, the workers were forcibly kept in a warehouse with squalid conditions, denied wages and threatened with violent retaliation if they decided to leave.

Conditions were so extreme, according to the federal lawsuit filed in January, that workers lived without running water, were locked inside the warehouse at night and forced to sleep on cramped wooden bunk beds.

In one instance, the suit claims, an injured worker was denied medical treatment in the U.S. and sent back to Mexico. In another, a worker received a one-time payment of only $8,000 after working 18 months.

If charged, Hernandez could face at least 10 years in prison.

“We do hear about these cases often. Where you find trafficking, you find wage theft,” said labor rights attorney Ruth Silver Taube. “Trafficking is wage theft, plus you’re not free to leave and you’re working off a debt.”

According to Silver Taube, the enhanced San Jose ordinance disincentives wage theft in the construction industry and among contractors and developers. “I think it will be a benefit to the city,” she added. “And it’s good for the construction industry because it will create a level playing field. If you don’t pay your employees, it’s unfair competition.”

The expansion of the ordinance had immense support from the public on Tuesday and received votes from six city councilmembers.

“The proposed provisions and amendments to the existing policy and ordinance will ensure that another Silvery Towers does not occur again and that the City is not blindsided by another atrocity,” Peralez, along with Vice Mayor Chappie Jones and Councilmembers Magdalena Carrasco and Sergio Jimenez wrote in a memo supporting the policy.

“Before, we did not expect public works to be exempted, but now with the project of Silvery Towers, we believe it must be included,” added Frances Herbert, Carrasco’s chief of staff. “The issue with Silvery Towers was with a subcontractor. Very rarely do these cases go to the federal court. It’s up to us at the local level to ensure that they’re following state and local law.”

Councilmember Johnny Khamis spoke against the local wage theft expansion, saying state law already provides those protections. But advocates pointed out that while the Division of Labor Standards Enforcement pursues judgments against local violators, the judgements often go unpaid.

According to @JohnnyKhamis, wage theft is already taken care of by state policy. Yes, DLSE pursues judgments against violators, but then judgement go unpaid and developers keep building. By amending San Jose's wage theft policy we can push bad contractors to actually pay workers!

— Jeffrey Buchanan (@JRBinSV) March 6, 2019

The expanded ordinance will also include a provision requiring contractors who engage in wage theft to repay any taxpayer subsidies with interest.

Following Tuesday’s action, city officials will begin working on crafting the updated policy.

Contact Nadia Lopez at [email protected] or follow @n_llopez on Twitter.