Houston lawmakers poised to tackle wage theft

The fourth largest city in the U.S. may be the next major metropolis taking action against wage theft.   Members of Houston’s City Council held a public hearing this week to discuss a proposed city ordinance targeted at employers who fail to pay the minimum wage or legally due overtime pay, force employees to work “off the clock,” or simply skip out on paying owed wages.  In Houston alone, an estimated $750 million are lost every year due to wage theft perpetrated against low-wage workers.  The economic consequences for the victims and their families is profound, as is the potential effect on their health.  One of the single biggest risk factors for ill health is poverty.

The hearing this week was called by Council Member Ed Gonzalez, chair of the Public Safety Committee, to discuss a proposed City ordinance on wage theft.  The preamble to the draft measure reads:

“wage theft, including the non-payment or underpayment of earned wages owed by employers, is a practice typically inflicted on the weakest and poorest segments of our society, locally, statewide and nationally; and those subjected to wage theft are generally without any adequate remedy to redress the injury suffered at the hands of unscrupulous employers.”

Workers who have been the victims of wage theft spoke at the hearing.  They weren’t seeking redress for their own situation, but rather to make the case that addressing Houston’s wage theft problem will benefit the community at-large.  Jose Perez explained

“If workers get the wages that belong to them, their families will be able to spend them on groceries, transportation, utilities and rent.  As result, responsible employers will be able to do more business and our economy will continue growing.  This is a pro-business ordinance becauseit will provide a more equal environment of competition among businesses by insuring irresponsible businesses cannot unfairly compete because they do not pay of the wages they owe to workers.”

Beatriz Arboleda testified that she and her husband supplement their income with a small specialty cleaning business.

“We face many challenges in this business because it is impossible to compete with irresponsible employers who avoid paying taxes and permits and are stealing wages from the workers.   …As responsible business owners, we endorse the wage theft ordinance.  …It will make our city a pioneer model to be followed by the other cities in the state of Texas.”

Stan Marek, CEO of one of the largest commercial interior contractors in Texas, told NPR’s Wade Goodwin:

“There’s no way you can compete.   …When someone is paying less per hour, no workman’s comp, no payroll taxes, [no] unemployment — we can’t overcome that.”

Marek was also at this week’s hearing.

The proposed ordinance was drafted by City attorneys, following a two-year campaign by the Fe y Justicia Worker Center to focus attention of City leaders on the problem.  The proposed wage theft ordinance would, among other things:

  • prohibit the City from entering into any contract or other business arrangement with any entity or individual convicted or otherwise sanctioned for wage theft;
  • establishes a wage theft coordinator who will receive and review wage theft complaints and notices of convictions;
  • instructs the coordinator to maintain a “watch list” of wage theft violators and distribute the list to City departments;
  • instructs the coordinator to monitor the City Council’s agendas to determine if any employer on the “watch list” is seeking any City contract;
  • create a publicly available database of all employers, including prime and subcontractors, located or operating in Houston, that have been convicted of, assessed a penalty, or determined by a court to have engaged in wage theft.

Olga Castro de Leon, a restaurant worker who has been a victim of wage theft by her employer put it simply:

“If our legal system requires that violations like stealing will be penalized, why isn’t wage theft?”

Houston’s full City Council is expected to take up the matter and consider the proposed ordinance in the next few weeks.

Comments

  1. #1 Dick
    July 26, 2013

    Why not yank the business licenses of offenders?

  2. My reading of the draft ordinance suggests a business wouldn’t be able to get a permit or license, but don’t think it says a current permit will be revoked. Good comment. I’ll check to find out if that is what they intend.

  3. Dick,
    Just learned that the ordinance would indeed revoke an existing license.

  4. #4 Greg
    DCMetro
    August 2, 2013

    So you revoke their license. They start a new company and do the same thing again.