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In California, one county is forcing restaurants to pay wage theft claims or risk losing their permits

Farida Jhabvala Romero Sep 7, 2023
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Melissa Sanchez with the Fair Workplace Collaborative speaks with a restaurant manager. Sanchez is part of an outreach effort to inform small businesses about Santa Clara County’s food permit enforcement program. Farida Jhabvala Romero/KQED

In California, one county is forcing restaurants to pay wage theft claims or risk losing their permits

Farida Jhabvala Romero Sep 7, 2023
Heard on:
Melissa Sanchez with the Fair Workplace Collaborative speaks with a restaurant manager. Sanchez is part of an outreach effort to inform small businesses about Santa Clara County’s food permit enforcement program. Farida Jhabvala Romero/KQED
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About two years ago, Mirna Arana won a wage claim against her former employer with California regulators. The immigrant from Guatemala said she often worked 12-hour days cleaning homes and offices in the Bay Area.

But Arana would only get paid about $60 for the entire day, she said — less than the state’s minimum wage.

“It has been such a stressful, difficult time,” the 36-year-old mother of two young boys said in Spanish.

Mirna Arana, a woman with hre black hair in a bun wearing a green shirt, sits at a kitchen table.
Mirna Arana won a wage theft judgment about two years ago but has yet to recover any money. (Farida Jhabvala Romero/KQED)

A court ordered her former employer to compensate her tens of thousands of dollars in back pay. But Arana hasn’t received that check. She said she feels the judgment in her favor is “just a piece of paper.”

“It feels like I didn’t achieve anything. That all my effort with this claim, to try to make sure that other workers didn’t go through what I did, wasn’t worth it,” Arana said.

Across the country, millions of workers suffer wage theft each year — that’s when employers pay workers less than minimum wage or skip out on paying overtime. It’s a crime, but often there are no severe consequences for employers that cheat their workers in this way. One county in California is trying to change that by holding restaurants and cafes accountable for wage theft.

Statewide, more than 6,000 low-wage workers like Arana have unpaid judgments that remained open over the last decade, according to a spokeswoman for the California agency tasked with investigating wage theft, the Labor Commissioner’s Office. Those cases — totaling nearly $85 million — were referred to a small team at the agency focused on trying to get employers to pay what they owe.

“These specific employers who sometimes come through our office will do everything they can to avoid these payments,” said James Yang, a senior deputy at the Labor Commissioner’s Judgment Enforcement Unit. “They start moving property, they start trying to sell or transfer the business, getting rid of real estate, whatever it is.”

Yang said when his office has the resources to intensively investigate a case, they can often claw back money for workers. But his unit is understaffed. Out of 22 positions statewide, 13 are vacant, according to a spokeswoman for the agency.

That’s why Yang is glad to see that Santa Clara, the most populous county in the Bay Area, is also taking on wage theft in the restaurant industry.

“It’s one industry, one county we are talking about here, but it’s been very helpful,” he said.

Through its Food Permit Enforcement Program, Santa Clara County is forcing restaurants to settle any unpaid judgments or risk losing their county food permit — which would mean they’d have to close down.

A hand holds a poster on wage theft.
A leaflet warning workers about wage theft and urging them to contact authorities if they are victimized. (Farida Jhabvala Romero/KQED)

So far, the county has recovered more than $125,000 for workers who were shorted on their paychecks, said Jessie Yu, who directs the county’s Office of Labor Standards Enforcement.

And Melissa Sanchez with the Fair Workplace Collaborative is working with the county to make sure about 1,800 food permit holders know the rules.

“It’s about supporting the small-business community, but also providing proper education and information to the business owners so they are not shortchanging our employees,” Sanchez said as she visited restaurants and cafes in the small city of Gilroy on a recent afternoon.

It’s an idea that’s spreading. San Diego County just launched a Workplace Justice Fund to offer wage theft victims up to $3,000 while the county’s collections agency works on their unpaid judgments. And in Los Angeles, workers rights advocates are pushing for a similar program to support people who have lost wages.

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