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Increasing enforcement at state and local levels in Massachusetts combats wage theft

  • KEVIN GUTTINGA crew from the Pioneer Valley Workers Center posted flyers throughout downtown Northampton, including on this bulletin board in Thornes Market.

  • KEVIN GUTTINGPioneer Valley Workers Center leadership team coordinator Rose Bookbinder, left, talks with Diana Sierra during a staff meeting in their office in the James House Community Learning Center in Northampton.

  • KEVIN GUTTINGThe Pioneer Valley Workers Center has its office on the first floor of the James House Community Learning Center on Gothic Street in Northampton.

  • KEVIN GUTTINGPearl Silverman, a Northampton High School senior and intern at the Pioneer Valley Workers Center, posts a flyer on a bulletin board at Thornes Market in Northampton.

  • KEVIN GUTTINGPearl Silverman, a Northampton High School senior and intern at the Pioneer Valley Workers Center, posts a flyer on a bulletin board at Masonic Street Laundry in Northampton.

  • KEVIN GUTTINGBess Harper, from left, Pearl Silverman and Lin Geng of the Pioneer Valley Workers Center distribute literature in Northampton restaurants including Filos Greek Taverna.

  • KEVIN GUTTINGA crew from the Pioneer Valley Workers Center distributes flyers throughout downtown Northampton.

  • KEVIN GUTTINGPioneer Valley Workers Center has a staff meeting in the James House Community Learning Center office in Northampton. Clockwise from lower left, foreground, are Lin Geng of Northampton, Bess Hepner of Leverett, Samantha Kramer, Gabriella della Croce, coordinator Rose Bookbinder, Diana Sierra and intern Pearl Silverman.

  • KEVIN GUTTINGPearl Silverman, a Northampton High School senior and intern at the Pioneer Valley Workers Center, distributes literature and flyers throughout downtown Northampton.



Sunday, February 28, 2016
NORTHAMPTON — Efforts are underway on the state and local levels in communities across Massachusetts to combat wage theft, the practice of employers denying workers the pay to which they are legally entitled.

Labor activists say wage theft is an unfortunate practice in workplaces throughout the country. It’s not uncommon for bosses to deny workers earned overtime, sick time or even the minimum wage, they say. The practice is particularly prevalent in the restaurant industry, which employs about 40 percent of all workers making at or below the minimum wage nationwide. It’s also common in the landscaping and construction industries, studies have found.

And the Northampton-based Pioneer Valley Workers Center says that is true here. Armed with an inside look at conditions in the city’s restaurants, the labor activism and resource organization hopes to spark action by city government to consider how the laws can be enforced locally.

“We’ve been working with restaurant workers in town for a year and a half or so at this point and we’ve came to realize that Northampton is not unique in that it still has a lot of issues of wage theft going on,” said Rose Bookbinder, coordinator of the workers center. “It’s been very normalized to not follow basic wage and hour laws.”

The city of Boston has led the way in creating a mechanism where complaints of wage theft can lead to consequences for businesses by putting liquor and food licenses on the line.

If a worker complains that he or she has been a victim of wage theft by their employer, the city’s Licensing Board can hold a hearing on the matter and hand down disciplinary action against the business.

The Cambridge City Council is considering a measure that would go a step further by establishing an office of wage theft prevention that would hear and mediate complaints about wage theft, compile an annual report of complaints and perform outreach to workers.

Chelsea, Everett and Burlington, Vermont, are also mulling options for local wage theft prevention, Bookbinder said.

The state attorney general’s office is charged with enforcing wage and hour laws. The office has an online guide at www.mass.gov/ago and notes that due to the large number of requests, it cannot investigate every complaint received.

If an employer is found responsible for wrongdoing, the office may issue a civil citation and order that restitution and penalties be paid, seek criminal charges against the employer, or suggest the employee take civil action.

Gabriel Quaglia, of Holyoke, said the attorney general’s wage law enforcement fell short when he was working for a downtown Northampton entertainment venue around 15 years ago.

One week he and several coworkers noticed they were not paid overtime they had worked.

“When I received my check it was minuscule — it was way less than 40 hours,” he said.

Quaglia filed a complaint with the attorney general’s office, which after an investigation found that his employer had unfairly denied him and his coworkers overtime. But Quaglia said there were no real consequences for his employer.

“All I got was my back wages. There should have been treble damages,” he said. “This was the second or third time they had investigated the employer. If all they have to do is pay it back, there’s no disincentive.”

Legislative action

Several bills being considered by the state House of Representatives would allow the state to take stronger action in punishing violators of wage laws — including one that would award treble damages, or three times the amount of wages owed, to employees.

“An act to prevent wage theft and promote employer accountability” would also allow the attorney general to order work stopped at a business found to be in violation of wage and hour laws until the error is corrected. Employees affected by that order would be paid for any hours lost while the business is closed. The attorney general’s office would also be able to collect lawyers’ fees and the cost of litigation from businesses found responsible.

The bill is sponsored by nearly 80 representatives, including Rep. Peter V. Kocot, D-Northampton.

“Just having that legal framework out there right off the bat, I think it’s going to serve as a deterrent to the shady operators,” Kocot said.

Kocot referred to a 2015 study by the University of Massachusetts Amherst Labor Center study that found a pattern of residential construction firms misclassifying workers as independent contractors, in some cases to avoid paying taxes and workers’ compensation insurance.

“What it ends up doing is you have a system that’s not fair,” Kocot said. “You have good contractors out there that are playing by the rules, then end up having to charge a lot more.”

Another House bill would expand the definition of fraud to include bids for state and local projects by contractors found to be committing wage fraud. Kocot said he is a strong supporter of both bills, which he believes are complementary.

Kocot said he is optimistic that the House will act on the bills this year.

Recovered $20 million

In 2014, the most recent year for which data was available, state agencies including the attorney general’s office recovered over $20 million in wages owed, unpaid taxes and penalties from businesses found to be circumventing labor laws. But experts say that enforcement reveals just a portion of violations and the true cost of wage theft to workers is impossible to know.

“There’s no hard data, kind of by definition — it’s not something employers report,” said Eve Weinbaum, associate professor of sociology and director of the UMass Labor Center. “And the workers for the most part don’t report it either, partly because they’re scared to lose their jobs.”

For the last year, the Pioneer Valley Workers Center in conjunction with the UMass Labor Center has taken surveys of about 300 of the 1,000 workers in Northampton restaurants.

The data is set to be released next month, but the early figures from respondents paint a grim picture for the local workforce — 70 percent of those surveyed who sometimes work more than 40 hours per week reported not receiving overtime pay, according to Clare Hammonds, the UMass sociology professor who is performing the research.

Those who face wage theft are typically in “precarious” positions, including undocumented immigrants and those new to the workforce, Weinbaum said

“A large number of undocumented workers are in the system, they’re paying taxes, they’re getting paychecks,” she said. Many “use someone’s Social Security number and present some kind of documentation” when hired.

Among the violations found include wages of $5 per hour and 60 hours of work for which no overtime was received, Weinbaum said.

The minimum wage in Massachusetts is now $10 per hour for most workers. For those who receive tips, the minimum wage is $3.35 per hour, and for agricultural workers it is $8.

Northampton effort

After hearing the stories related by workers, Bookbinder said the organizing committee of the Pioneer Valley Workers Center wanted to find a solution.

“We had been talking about the creation of something we call the restaurant workers’ bill of rights,” she said, which outlined “big goals ... Then we realized unfortunately we just have to get things up to the basic standards.”

Bookbinder and others from the Workers Center reached out to several city councilors, including Ryan R. O’Donnell of Ward 3, to consider how to raise standards in the industry locally.

“My thinking is that this is something that needs to be studied in a broader context,” O’Donnell said. “What I’m interested in is perhaps exploring a way to study this using our new council rules.”

Under the city charter, the council can form committees that bring together stakeholders to study specific issues. In this case, it could mean bringing together business owners, workers and others to discuss factors affecting the local economy such as high rents, vacant store fronts and energy costs.

“Before any specific ordinance is debated I think the community has to be involved in a larger discussion,” O’Donnell said. “I hope the consensus is that the local economy thrives when local businesses do well and also when workers are treated well.”

O’Donnell said there’s no immediate plan to form such a committee, “but I think you have interest among councilors to act soon.”

One worker’s perspective

Lincoln Lin, 34, emigrated from his native China to New York City in 2002. After working in New York, Connecticut, New Jersey and West Virginia, Lin, like many Asian immigrants, looked to an employment agency in New York’s Chinatown for a more lucrative job placement.

That’s how he came to Northampton eight years ago to work at a restaurant, which he declined to name publicly.

As part of his employment package, he was promised housing, meals and a monthly salary in exchange for six days of work per week. It’s common for Asian restaurants to offer housing as a benefit to workers, he said.

“That’s what we view as our right — free housing and free food,” Lin said.

But that practice often violates wage laws.

In Massachusetts, employers are allowed to deduct no more than $35 per week to pay for housing they provide and no more than $2.25 per meal.

Lin said he and many of his coworkers earn less than the minimum wage and do not receive overtime.

Lin said he was inspired to join the Workers Center as a way to effect change. He is one of the group’s organizers who works to develop relationships with workers in order to learn about their workplace needs and desires and distribute surveys to them.

Restaurateurs respond

One of the city’s most prominent restaurateurs, Claudio Guerra, owner of the Spoleto Restaurant Group, said he was hesitant to share his thoughts publicly about wage theft enforcement. “If there’s a need and everybody’s playing under the same set of rules, so be it,” he said.

Adam Dunetz, co-owner of the Roost and Green Bean restaurants in Northampton, said he welcomes increased enforcement of wage and hour laws.

“If someone works a quarter hour over 40 hours, then they’re getting paid a quarter hour of overtime,” he said.

Dunetz likened the possibility of increased scrutiny to that of the Internal Revenue Service auditing a tax return or a city health inspection.

“It makes me sure that I’m staying within the lines,” he said. “It helps me make sure I’m doing the job that I’m supposed to be doing — I don’t mind that oversight. It doesn’t scare me.”

In fact, the federal government once looked at businesses much more closely to ensure they were complying with labor laws.

“In a way this is what the federal labor department used to do — they had armies of workplace inspectors and that’s how we got rid of sweatshops in the early 1900s,” Weinbaum said.

But since the 1980s, the U.S. Department of Labor has reduced staff to the point where there’s no real monitoring of business practices, she said.

Weinbaum added that she sees the trend of local wage enforcement catching on to the point where the state will eventually become the enforcer.

“If Cambridge is doing it, Chelsea is doing it, what about Somerville?” she said of the trend in Boston-area cities. “Once there are enough of these, then the state would itself become responsible.”

The Pioneer Valley Workers Center can be visited online at www.pvworkerscenter.org or at its office in the James House Community Learning Center at 42 Gothic St. in Northampton.

Chris Lindahl can be reached at clindahl@gazettenet.com.