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Council moves to put a stop to wage theft

Friday, January 28, 2022 by Jo Clifton

Austin is taking a step toward joining El Paso and Houston in punishing employers that engage in wage theft, with a resolution City Council approved unanimously on Thursday. A dozen people signed up to tell Council members to approve the resolution, which was sponsored by Council Member Ann Kitchen.

The resolution directs City Manager Spencer Cronk to create a system for the city to receive complaints from workers about construction employers who fail to pay wages owed to employees, fail to maintain payroll records or improperly classify employees as independent contractors. Staff members are expected to come back to Council with an ordinance establishing criminal penalties and a civil complaint procedure relating to wage theft.

At least one representative of the contractor community advised Council that he and his members had not been consulted about the proposed ordinance. Phil Thoden, president of Associated General Contractors in Austin, told Council his organization is strongly opposed to wage theft. However, he was concerned because his group was not contacted before the item went on the Council agenda.

By the end of the day when the item came up for a vote, Mayor Steve Adler had added a direction to the resolution saying, “City staff should engage with a wide range of stakeholders and differing substantive positions, engaging and soliciting input on the proposed ordinance from, without limitation, organizations that represent both labor and contractor/employer interests.”

The direction also stated that staff should consider and present options about different levels of city resources that might be needed to take on the task of enforcing any new ordinance. Council Member Mackenzie Kelly seemed concerned about incurring new expenditures, but Kitchen assured her that voting for the resolution did not entail a commitment of any new resources.

District Attorney José Garza sent a letter to the mayor and Council urging them to approve the resolution. He noted that his office has launched an economic justice enforcement initiative, with some emphasis on deterring wage theft. However, he wrote, “As we have undertaken this initiative, it has become clear to us that there are not sufficient systems in place to support wage theft victims or deter these legal violations from recurring. We need additional partners in this work. I am hopeful that this resolution presents an opportunity for our office to deepen its collaboration with the city and strategize how we can strengthen avenues available for wage theft victims to seek justice.”

About a dozen speakers signed up to speak in support of the resolution, including Ryan Pollock, representing the Central Texas electrical workers union, the Austin Central Labor Council and the Central Texas Building Trades Council. Pollock told Council, “As a worker who has myself been on the receiving end of wage theft by my employers countless times,” he wanted to personally thank the Council members sponsoring the ordinance, “for your initiative in addressing the practical institution of greed and wrongdoing that is wage theft. The near total lack of accountability in this shockingly common issue is a great example of the failure of all levels of our government to hold up their end of the social contract at the most basic level.”

Besides Kitchen, the resolution was sponsored by Council members Vanessa Fuentes, Kathie Tovo, Pio Renteria and Greg Casar.

Rene Lara, representing the Austin carpenters union, told Council denying a laborer their hard-earned wages “goes back to ancient times, spoken of and condemned by ancient texts. So it’s not a new issue, but unfortunately in modern times we still find that the legal framework that we have now fails to protect the most vulnerable workers, especially in the construction industry.”

According to Fabiola Barreto of the Workers Defense Action Fund, most of the workers asking for help from her organization are construction workers who have been the victims of wage theft. “These cases include people who were not paid overtime, not paid for working off the clock, not paid for any portion of their work,” she said.

According to documentation Barreto sent to Council, “more than 37 percent of Texas construction workers are misclassified as independent contractors.” The documentation also said employers who commit payroll fraud are able to undercut the competition on building projects and cost the state more than $54 million a year in lost unemployment tax revenue.

The resolution directs the city manager to return to Council with a draft ordinance by the end of August. In addition, the manager is directed to “develop a proposal for the creation of a publicly available, searchable database on the city of Austin website of final determinations of criminal violations related to nonpayment of wages or other employment related crimes that occurred for work performed in the city.” The website “should also list employers who are the subject of a final order from the Texas Workforce Commission related to wage theft; federal labor agencies, including the Department of Labor’s Wage & Hour Division,” and others.

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