SCREEN SHOT BY BRUCE CHECEFSKYMonday, September 12, 2022; Public Comment, Cleveland City Council Meeting, Cleveland City Hall, 601 Lakeside Avenue: Matthew Ahn, a spokesperson for the Guardians for Fair Work, says legislation introduced at Cleveland City Council to address wage theft falls short of expectations.

Guardians for Fair Work support wage theft protection

by Bruce Checefsky
(Plain Press, October 2022)   Guardians for Fair Work is a campaign to protect Cleveland workers from wage theft and ensure quality jobs across Cleveland. Organizers want to ensure that employers pay workers fairly and treat them with dignity, especially when the public funds a private business operation based on possible job creation. The campaign seeks to enact and enforce fair and equitable employment scheduling practices and provide working people with protections. Employer scheduling practices should not unreasonably prevent workers from attending to their families, their health, furthering their education, and other obligations.

     Unpredictable and unstable work schedules, little advance notice of work hours, and lack of control over a work schedule can hinder an employee from taking on additional work or pursuing training and education. Wage theft includes the misclassification of contract workers or part-time workers. Nationally, employers steal some $15 billion a year from working people, more than all robberies, burglaries, larceny, and motor vehicle theft combined.

     One area of concern in the City of Cleveland is assuring that workers working on taxpayer subsidized projects or in venues subsidized by public funds are paid fairly.  In November 2021, Cleveland City Council voted 13-3 in favor of a $435 million deal with the City of Cleveland, Cuyahoga County, and the state of Ohio to renovate Progressive Field and extend the Cleveland Guardians lease in Cleveland for at least 15 years. The City of Cleveland will contribute roughly $8 million yearly from admission taxes and revenues from the city-owned Gateway East parking garage and the general fund. Cuyahoga County will add $9 million a year, with another $2 million from the State of Ohio. The team will pay $4.5 million a year toward the renovations. Local and state taxpayers will eventually pay $290 million of the overall cost.

     Renovations will include a new entryway into Gateway Plaza, an overhaul of corporate offices, and improvements to the areas used by players. A redesign of fan areas is under consideration, including the upper deck and the Terrace Club.

     Michael Shields, a researcher at Policy Matters Ohio, board member of the Northeast Ohio Worker Center, and member of Guardians for Fair Work, said everybody deserves to get paid for all the hours they work. A recent report found that employers in Ohio steal from over 213,000 workers yearly through minimum wage nonpayment. Other types of wage theft include nonpayment of overtime for eligible workers or requiring employees to work during unpaid lunch breaks.

     “In some cases, especially short-term jobs like construction sites, workers may not get paid,” said Shields. “Wage theft is difficult to measure. Most workers never come forward to report that employers have stolen from them. The typical workers can expect to lose as much as $2,873 if they stay on the job for a full year.”

     Shields added that wage theft affects the vulnerable, low-paid marginalized workers, including Hispanics, which are 74% more likely to be victims than their European American counterparts. Asian Americans are 54% more likely to experience wage theft than European Americans, while African American workers typically work more hours and lose more wages than European American workers. Ohio has only five wage-hours investigators and a supervisor for a workforce of 5.5 million.

Local legislation

     “We have asked the City of Cleveland to step forward and use its political power to enhance enforcement. We are not asking for the creation of new rights, the right to be paid a minimum wage is in the federal law, but too often, employers take advantage of their workers,” he said. “We want the City to enforce minimum wage per hour laws with entities with whom they do business.”

     The Department of Economic Inclusion monitors the City of Cincinnati construction and service contracts to ensure that contractors comply with applicable local, state, and federal prevailing wage laws, the Living Wage Ordinance, and Wage Enforcement Ordinance. City-funded service contracts that exceed $20,000 are under the Living Wage Ordinance. If an employer has violated the Living Wage Ordinance, an employee is entitled to submit a Living Wage Complaint. Columbus City Council passed the Columbus Wage Theft Ordinance to prevent workers from losing take-home pay through wage theft and payroll fraud. The legislation does not create new wage and hour laws but monitors businesses that receive the City’s financial support and must follow state and federal wage and hour laws. The failure to do so results in being barred from contracts or projects for three years.

     “We want to catch up with our peer cities,” said Grace Heffernan from Guardians for Fair Work. “We are asking the City of Cleveland to follow an exciting code enforcement model and work with the community to provide workers education and enforcement. We want a justice fund that the community can access to help pay for public education and to create a worker-led board to review issues brought against a business by the community.”

National legislation

     A recent report from the National Employment Law Project (NELP) shows the prevalence of wage theft and forced arbitration agreements to diminish employers’ liability. Arbitration agreements often prohibit employees from suing their employer or pursuing a class action lawsuit.

     Senator Patty Murray, a Democrat from the state of Washington, introduced S.4174 – Wage Theft Prevention and Wage Recovery Act. She reported that a Department of Labor study of wage theft in California and New York found that wage theft deprived workers of 37 percent to 49 percent of their income, pushing at least 15,000 families below the poverty line and driving another 50,000 to 100,000 families deeper into poverty. This bill requires employers to make initial and modified disclosures to employees of the terms of their employment, provide such employees with regular paystubs, and make a final payment to an employee for uncompensated work hours within 14 days of the termination.

     The Wage Theft Prevention and Wage Recovery Act will enhance enforcement and compliance with Federal wage and hour laws through supporting initiatives that address and prevent violations of such laws. The act will also assist workers in wage recovery, support individual entities, and develop community partnerships that expand and improve cooperative efforts between enforcement agencies and community-based organizations. The goal is to prevent wage and hour violations and enforce wage and hour laws.

     S.4174 was read twice since first introduced on May 10, 2022, and has been referred to the Committee on Health, Education, Labor, and Pensions.

     Shields said wage-hour violations are a business model used by employers. The most common wage theft occurs in restaurants when employers fail to pay employees the minimum hourly wage required by state and federal law. State and Federal levels guarantee restaurant workers the right to a minimum wage, overtime pay, and various other protections from unfair treatment by employers about compensation for hours worked.

     “If workers were to steal money from their employers, they could face felony charges,” said Shields. “Wage theft is costly and harmful to working people. It is against the law to steal wages from workers.”

     Cleveland City Council introduced legislation (Ord. No. 892-2022) to supplement the Codified Ordinances of Cleveland, which requires any person or entity that bids on a City construction or service contract, or applies for financial assistance to disclose any legal determination that they committed wage theft, or payroll fraud in the previous two years to the Fair Employment Wage Board (FEWB) and the contracting department. Any person who withholds the information required under the ordinance is guilty of a misdemeanor of the first degree.  The legislation goes to the directors of Finance and Law before returning to the Finance Diversity Equity and Inclusion Committee.

     Matthew Ahn, a spokesperson for Guardians for Fair Work campaign, during the public presentation at the City Council meeting on September 12, told the council that the legislation falls short of expectations. 

     “The new language does not give the Fair Employment Wage Board the power to make wage theft findings, only the power to catalog them. This is a far cry from the City of Columbus board which has the power to investigate wage theft on its own,” said Ahn. “The Fair Employment Wage Board, which has been on the books for over twenty years, is not currently staffed or active. The drafting here is not just imprecise, it becomes non-existent.”