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Plans for LA anti-wage theft office are ambitious, modeled after other cities

Los Angeles city officials have proposed an Office of Labor Standards that would enforce the city's new minimum wage, which is to rise from the current $9 an hour to $15 an hour by 2020.

The arm of city government that would enforce Los Angeles' new minimum wage law could employ more than three dozen people to police wage theft and spend more than $2 million on outreach over the next four years, according to a tentative plan.

The Los Angeles City Council still has to approve it, but plans for the city's Office of Labor Standards are ambitious - provided there is the funding.

Plans are outlined in a memo drafted by the L.A. Bureau of Contract Enforcement, which is tasked with enforcing the wage ordinance that city officials approved in June.

From the memo:

The city's minimum wage is to gradually rise from the current $9 an hour to $15 an hour by 2020.

The labor standards office would start out modestly the first year with a staff of five people, budgeted at about $459,000 for fiscal year 2015, said John Reamer, director of Bureau of Contract Enforcement. Then, depending on demand and funding, as many as 39 positions could be budgeted for wage enforcement over the next four years. This would include as many as 19 investigators.

"We're going to be looking at workload," Reamer said. "We’re going to take a look at the number of complaints we get, the number of requests for deferral that we receive, to identify what we think the staffing levels will need to be to adequately respond to the demand.”

Reamer said smaller businesses with fewer than 26 employees won't be affected the first year, nor will nonprofits. The workload would pick up once these businesses are on board.

The eventual goal is for investigations to be both complaint-driven and proactive, employing targeted audits of "industry sectors or employers with high rates of non-compliance," according to the memo.

But this will depend on budget and staffing. For now, so long as there is a minimal staff, enforcement will be based on complaints - something Reamer said is less than ideal.

"There is a real reluctance to complain and I can see why," Reamer said. "There is a concern for retaliation. Individuals want to keep their job. For some people, some money is better than no money at all."

Workers may not know where to go to complain in the first place, Reamer said, so "we would like to move to a proactive approach." 

That part of the plan would be modeled on how the California Department of Industrial Relations polices wage theft, combining proactive investigations with followup on worker complaints. City officials also consulted with wage enforcement officials in San Francisco and Seattle, both of which have their own labor standards offices.

Outreach to employers and employees will also be a key component, with a suggested budget of $200,000 for outreach in the first year.

Some workers in L.A. aren't even paid the minimum wage of $9 an hour; some garment workers, for example, earn less than this because it's customary in that industry to pay per piece, even if employers are supposed to make up the difference. One problem is that workers don't always know their rights.

In order to reach workers - and employers - city officials plan to:

  • Develop an "accessible, multi-lingual website" which will have information for employers and employees about workers' rights, and link to a portal where workers can submit complaints.
  • Engage community organizations to help spread the message, a strategy also employed by the cities of San Francisco and Seattle and also by California labor officials. 
  • Notify employers by mail, using a postcard mailing campaign to get the word out. Employers could be notified by mail once the program starts and before each annual wage increase.
  • Use alternative means to inform workers, including notices in ethnic media and bus ads.

Contracting with community groups to get the word out to hard-to-reach immigrant populations will be necessary if the wage ordinance is to succeed, said Alexandra Suh, director of the Korean Immigrant Workers Alliance in Koreatown. The group helped push for the wage raise.
"Without community partnerships, we risk inaugurating the most significant minimum-wage increase in the nation on paper only," said Suh, who is familiar with the city's tentative plan. "Only effective enforcement will induce those business owners willing to systematically steal from their employees and who pay less than $9 now to meet the new minimum wage."

Suh said she's hoping there will be enough budgeted for outreach. Other city agencies have turned to community organizations to help reach immigrants; for example, the Department of Water and Power contracts with various groups to help spread the water conservation message.

The labor standards office would work closely with the City Attorney to go after non-compliant employers. Businesses would have an extendable 10-day period to remedy the complaint or appeal. Penalties against employers could include:

  • Financial reimbursement and interest paid to the employee
  • Fines paid to the city
  • Revocation of police permits
  • Liens

Employers could also be punished if they don't cooperate with inspectors, for example, if they don't allow access to payroll records.
Reamer said the plan will first go to a city committee before it receives a full council vote.