Silver Taube: San Jose tackles wage theft and workplace abuses

There are two important ordinances in San Jose that will impact workers.

The first, the Responsible Construction Ordinance, was passed unanimously in concept on Dec. 12 with the San Jose City Council set to return to the ordinance on Jan. 23. The council directed staff to conduct more extensive outreach to developers, contractors and lenders before Jan. 23 and return with an amended ordinance that addresses specific issues. The policy has been in the works for years and was a priority for the council as early as 2019. Similar policies have been enacted in Sunnyvale, Milpitas and Mountain View.

Wage theft is rampant in the construction industry and labor trafficking is also prevalent.

The Wage Theft Coalition’s 2021 report found 12,376 Santa Clara County construction workers have been victims of wage theft, robbed of more than $46 million dollars. That includes only cases where workers had the courage to file claims. According to a landmark study by the UCLA Labor Center and the National Employment Law Project, only 17% of wage theft judgments in California are ever collected.

The notorious Silvery Towers labor trafficking case involved construction workers in San Jose who were not paid, threatened with harm to their families and locked in a shipping container-like warehouse. This policy aims to prevent another Silvery Towers and to combat the epidemic of unpaid wage theft judgments in the private construction industry.

The policy, approved in concept, is aimed at private construction and does not affect construction under 10,000 square feet. It therefore has no impact on single-family home construction or home improvements

In its current form, the ordinance requires the applicant for a building permit to sign an acknowledgment of responsibility that states the owner and contractors are responsible for ensuring the contractor and all subcontractors on the project pay any wage theft judgments they have received before or during the construction of the project, and that a violation will result in withholding of the certificate of occupancy.

The ordinance also contains a pay transparency certification for each project that requires the owner, contractor and subcontractor to sign under penalty of perjury that they have no unpaid wage theft judgments. If the owner fails to submit the pay transparency certification or, if the director of public works has sustained a complaint of an unpaid wage theft judgment that has neither been cured or reversed on appeal, no certificate of occupancy will issue until the judgment is paid or a bond is posted. The city may also issue administrative citations, fines and penalties.

The ordinance that was approved in concept is complaint driven, and any person who is aware of an unpaid wage theft judgment against a contractor or subcontractor can file a complaint and must provide a copy of the judgment. The affected worker must sign a declaration under penalty of perjury that the worker is owed the unpaid wages. The contractor or subcontractor may appeal, and the hearing officer must provide a written decision within 10 working days of the hearing.

The ordinance in its current form permits the owner, contractor and subcontractor to cure a violation at any time or post a labor payment bond, release bond or similar security to ensure that the wage claim and penalties are paid.

The ordinance prohibits retaliation against workers when they report unpaid judgments or cooperate in an investigation.

Another bill, the Fast Food Fair Work bill, that will soon be before the San Jose City Council Rules Committee, will address the abusive working conditions that many fast-food workers face. Fast-food workers are disproportionately likely to experience wage theft, harassment, discrimination, retaliation, inadequate paid leave, and unpredictable schedules.

Fast-food restaurants are often magnets for violence inside and outside the stores, posing dangers to consumers, workers and the public at large. A 2021 UCLA and UC Berkeley study identified 77,200 violent or threatening incidents across 643 locations in California that resulted in a 911 call for police assistance between 2017 and 2020. Many of these locations generated as many as seven calls per week, and McDonald’s locations alone account for 47,600.

Although Gov. Gavin Newsom signed a bill, AB 1228, that establishes a “fast-food council,” it would not have the authority to regulate paid sick leave, vacation or predictable scheduling for franchisees. This bill would create and require robust, in -person training to be provided by a nonprofit, public or academic organizations or group of organizations familiar with issues faced by fast-food workers, especially in Santa Clara County and with experience designing curricula and conducting trainings.

Until fast-food workers know their rights, wage and hour, discrimination, health and safety, anti-retaliation laws will not be enforced.

The bill would also provide for paid leave for fast-food workers to attend the training and general paid leave for fast-food workers accrued at one hour for every 30 hours worked, to be capped at 72 hours. In addition, it would ensure public safety in and around fast-food restaurants by requiring they maintain at least one security guard at all times employees are present at the restaurant.

The bill would require fast-food businesses transferring ownership to retain workers during a 90-day transition period and continue to retain employees who perform satisfactorily during that period. In addition, it would provide predictable scheduling standards for fast-food workers.

San Jose should join Sunnyvale, Milpitas and Mountain View in enacting the Responsible Construction Ordinance in its current form. It will help to ensure that the huge number of unpaid wage theft judgments in the construction industry will finally be paid. If enacted, the Fast Food Fair Work bill will go a long way in combating wage theft and the epidemic of violence in the fast-food industry and ensuring that workers know their rights and have predictable schedules.

San José Spotlight columnist Ruth Silver Taube is supervising attorney of the Workers’ Rights Clinic at the Katharine & George Alexander Community Law Center, supervising attorney of the Santa Clara County’s Office of Labor Standards Enforcement Legal Advice Line and a member of Santa Clara County’s Fair Workplace Collaborative. Her columns appear every second Thursday of the month. Contact her at [email protected].