Santa Clara County pilots program to combat wage theft

Santa Clara County is doubling down on its efforts to eliminate wage theft following a report showing $128 million in unpaid fees.

Earlier this month, the county launched a pilot program that proactively identifies contractors working with the county who have outstanding final judgments against them and determines whether to disqualify the contractor from doing business with the county.

County Executive Jeff Smith said the pilot program comes at an “opportune time.”

“COVID-19 has been extremely challenging for businesses and this, in turn, has severely impacted our workforce,” he said. “This program sends the message to potential vendors that the county will not tolerate contractors who commit wage theft, discriminate or retaliate against their employees.”

The program is managed by two county departments, and includes oversight for contracts related to facility and building operation, including maintenance, furniture and office equipment.

A report from the Santa Clara County Wage Theft Coalition published earlier this year found a total 25,856 reported wage theft cases across multiple industries in Santa Clara County, affecting more than 32,000 employees and amounting to $128 million in unpaid wages.

“COVID has really impacted our communities, and we anticipate there may be some additional claims that come the way from COVID,” Monica Tong, program manager with the county’s Office of Labor Standards Enforcement, told San José Spotlight. “It’s important for us to make sure workers are being treated lawfully and fairly. Lots of folks are struggling now and I think now more than ever it’s important our working families are staying safe.”

Tong said the program is a way for the county to better put its stated values into practice.

“We work toward safe, fair and lawful workplaces for all our community,” she said. “It’s a way we can help our community by using the county’s leverage and purchasing power to tell folks that wage theft is not acceptable here.”

According to the coalition, Santa Clara County has some of the highest instances of wage theft in the state. County law already requires contractors to comply with applicable employment laws, but enforcement of these rules is a different problem.

“Despite the progress that the state and local governments have made to combat the problem, workers continue to face wage theft in huge numbers,” the report says. “Even those who successfully file claims against their employers, enduring legal proceedings that can take months or years, largely fail to collect the back wages they are awarded.”

The report continued to explain that “the crisis of wage theft” only worsened since the beginning of the COVID-19 pandemic, and “exacerbated labor trafficking, health and safety violations, job losses, pay decreases, and retaliation against workers.”

Santa Clara County has about $4 billion worth of recurring contracts for goods and services.

Cities like San Jose have a long history of persistent wage theft issues. A recent San José Spotlight investigation revealed numerous allegations of wage theft and unsafe working conditions on a public works project built last year intended to provide emergency shelter to the city’s homeless.

“The county is committed to being the best place to work in Silicon Valley,” said Supervisor Cindy Chavez. “This program ensures not only that workers are paid fairly and treated with respect, but also that contractors have a level playing field where everyone plays by the rules.”

The county created similar programs in years past with a more limited scope. In late 2019, it launched a food permit enforcement program, which allowed the county’s labor enforcement departments to suspend food vendor licenses from businesses with outstanding wage theft judgments.

According to a county analysis, between January 2015 to September 2019,  restaurant owners in Santa Clara County owed nearly $5 million in back wages to employees, or an average of about $2,900 per employee.

The Contracts Enforcement Pilot Program will use judgments issued by the California Division of Labor Standards Enforcement and orders from the Federal Department of Labor to determine whether a contractor should be disqualified from working with the county.

According to the county, the pilot program will last through the summer and will be up for permanent approval at the end of this year.

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