In February, when California labor officials announced the biggest wage theft case against a private company in state history, they included a warning for all bosses:
“Stealing earned wages from workers’ pockets is illegal in California and this case shows that employers who steal from their workers will end up paying for it in the end,” Julie Su, head of the state’s Labor and Workforce Development Agency, said in a press release announcing nearly $12 million in citations against RDV Construction, Inc.
RDV has appealed the penalties.
But her message didn’t include a timeline for when RDV will pay; nor do any of the other announcements from the Labor Commissioner's Office about wage theft citations. There’s good reason for this: In many cases, it takes years before workers receive even a portion of the money they’re owed. Sometimes they receive nothing at all.
Last week, Gov. Gavin Newsom signed a series of worker protection bills, including Assembly Bill 51, which bans forced arbitration, a business practice commonly used by employers to prevent workers from suing them for sexual harassment, discrimination or wage theft. Another new law extends the amount of time employees have to file civil rights complaints against their employers.
“We’re being robbed,” said Georgina Hernandez, a janitorial worker whose former employer was cited for multiple wage violations in 2014 and ordered to pay workers over $1.7 million. Five years later, Hernandez and dozens of other employees haven’t received a dime, according to labor organizers.
Wage theft — a term that covers various types of pay violations — occurs with alarming frequency in California. Many employers, large and small, shortchange their workers by not paying them the minimum wage or required overtime, making improper deductions or refusing to pay them altogether. According to the U.S. Department of Labor, minimum wage violations in California alone occur approximately 372,000 times each week.
Low-income workers (those paid less than $14.35 per hour in 2017), who make up about a third of California’s workforce, are especially vulnerable, and can suffer severe hardship when shorted on their pay. Every year, tens of millions of dollars are siphoned from workers like Hernandez, who clean restaurants, pick fruit, wait tables, repair cars, stock warehouses, sew clothes and care for the sick and elderly.
Risking retaliation, many workers seek help from the government. In California, the U.S. Department of Labor’s Wage and Hour Division enforces federal pay rules. But to add muscle to its efforts, the state Labor Commissioner's Office runs a parallel enforcement program. It allows workers to pursue unpaid wages through hearings, where administrative officers award or reject their claims.
In the majority of cases — roughly 80% — employers pay at least a portion of the claim before any judgment can be issued, said Matthew Sirolly, an attorney with the Labor Commissioner’s Office.
But when workers don’t reach a settlement, they rarely get their money. A landmark study of California wage claims between 2008 and 2011 found that just 17% of workers who won a Labor Commission judgment received even some of their pay. To avoid paying up, many of these employers shuttered their companies or hid assets, leaving workers nothing.
“Some person of authority — a judge or an administrative hearing officer — says this particular employer has broken the law and owes you money for your wages. But all it means is you get a piece of paper that they don’t have to pay,” said Matthew DeCarolis, an attorney at Bet Tzedek, a nonprofit legal aid firm in Los Angeles.
The press releases suggesting victories for underpaid workers do not hint at the years-long struggles that may lie ahead. For this story, FairWarning conducted more than 20 interviews and reviewed hundreds of pages of documents obtained under the California Public Records Act and from court files, to determine the actual outcome of these cases. In some instances, workers ultimately got nothing or, years later, are still waiting.
Take the seemingly endless saga of American Airporter Shuttle Inc. In April 2012, a van driver named Bin Wu filed an administrative claim with the Labor Commissioner that accused the San Francisco-based shuttle business of numerous violations.
Wu testified that he usually worked 13-hour days, and that the company asked him to work through meal breaks. He also wasn’t allowed to refuse assignments, but the shuttle firm classified him as an independent contractor, which would exempt them from wage regulations.
According to his testimony, Wu didn’t understand his contractor agreement because he received a copy in English, even though he speaks only Mandarin Chinese. Five other drivers subsequently filed similar claims.
In 2013, following an investigation, the Labor Commissioner issued citations to American Airporter and its owner, Phillip Achilles, saying the they illegally misclassified its drivers as contractors. The company appealed, a new hearing was held, and in May 2016 an administrative officer affirmed the citations.
What happened next highlights the lengths some employers will go to fight citations, and the difficulty of recovering stolen wages through the legal system.
On June 16, 2016, after the state Labor Commissioner affirmed American Airporter’s citations, the company contested the findings in San Francisco Superior Court. But for the next two years, Achilles did nothing to advance his plea. In court briefs, the Labor Commissioner asserted that he had instead worked secretly to hide his assets. FairWarning was unable to reach Achilles. An attorney who represents the drivers declined to speak on record.
In October 2017, the Labor Commissioner discovered that Achilles was trying to sell a building he owned in downtown San Francisco. The state moved to put a lien on his commercial property, allegedly worth over $5 million, but Achilles transferred the building to a shell company, rendering himself insolvent, according to court records. The Labor Commissioner sued Achilles to undo the allegedly fraudulent transfer.
In January 2019, nearly seven years after Bin Wu filed his wage claim, the Labor Commissioner and Achilles finally agreed to sit down for mediation and, according to court records, hammered out a settlement in February.
But it was short-lived: In May, the Labor Commissioner accused Achilles of breaching their agreement. A trial date has been set for Dec. 16, but Matthew Sirolly, the Labor Commissioner attorney, said it’s unlikely the case will reach this stage because the agency has asked the court to enforce a sheriff’s sale of Achilles’ real estate.
But, he noted, the legal system can move at a “glacial” pace, which means an immediate sale of the property is unlikely. Sirolly said the hope is for a sale by early 2020.
Even in less extreme cases, hurdles for underpaid workers remain high. They need to identify their employer’s bank account or real property, which can be difficult if the information on their pay stubs is missing or incorrect. Some bosses close their companies and reopen under different names. In 50% of cases where the Labor Commissioner found that an employer owed wages, the employer sold, transferred or abandoned their business before the judgment was even delivered, according to a joint study by the UCLA Labor Center and National Employment Law Project.
“It really is a structural problem within these industries where it’s really difficult to be able to collect those wages,” said Jennifer Lin, of the employment law project.
In May 2014, the Labor Commissioner announced citations over $1.5 million against two janitorial companies in Southern California — NLP Janitorial and Coast to Coast West — for failing to pay their workers minimum wage or overtime.
Georgina Hernandez, one of the former employees, told FairWarning that she worked 12-hour days cleaning movie theaters and restaurants without overtime or breaks. She said she and her coworkers finally went to the Labor Commissioner after her boss laid them off without paying for their last month of work.
The loss of a month’s pay had life-altering consequences for Hernandez.
Speaking through a translator, she explained that she lost her apartment and spent two days sleeping on the street before finding a place to stay. For a while, she said, she couldn’t afford to feed her daughter. Others were in similar straits — at one point, Hernandez shared $10 with a former co-worker who couldn’t afford basic necessities like milk or tortillas.