Cracking down on deadbeat bosses: Wage theft victory a milestone in Chicago's worker center movement

by Kim Krisberg

For Angel Nava, Chicago's newly adopted wage theft ordinance is particularly personal.

Until recently, Nava had worked at the same car wash business in Chicago's Uptown neighborhood for 14 years. The 55-year-old employee did it all — washing, detailing, buffing — for about 50 hours each week. Then, his boss decided to stop paying overtime.

In fact, Nava didn't receive the overtime he was owed for the last four years he worked at the car wash. He told me (though a translator) that none of his co-workers were receiving overtime either — "everyone was very upset." Nava said he knew his employer was acting illegally, but he didn't know how to file a Department of Labor complaint or know of any community group that could help him fight for his wages. Eventually he was referred to the Arise Chicago Worker Center.

With the Worker Center's help, the Department of Labor launched an investigation, and Nava eventually received a check for $1,300 — not nearly what he was owed, but it was something. Because of the wage theft experience, Nava quit his longtime job and now works for a different car wash making $7 an hour, which is above minimum wage for tipped employees in Illinois. (Employers must pay tipped workers $4.95 per hour, and tips are expected to bring the workers’ earnings to the state minimum wage of $8.25.)

"I don't think I would have been able to do it without Arise," said Nava, who's been a Worker Center member for two years now. "If we had approached the boss on our own, we wouldn't have ever been paid...I'm committed to sharing the message about Arise with other workers in the city facing similar problems. I hope everyone hears about wage theft so that everyone can know it's a serious reality. But there are ways to fight back."

And the city's new wage theft ordinance, passed unanimously by the Chicago City Council in January, is shaping up to be a powerful way to do just that. Starting in July, Chicago employers found guilty of wage theft can have their business licenses revoked. The ordinance is only the second of its kind nationally and has been described by advocates as one of the strongest anti-wage theft laws in the country. And at the heart of the law's successful passage was the Arise Chicago Worker Center, which rallied workers and community partners in support of the proposed ordinance and was fortunate enough to gain the support of key city decision-makers. That support was crucial, said Adam Kader, director of the Worker Center. In fact, the ordinance gained such strong support that the process went from initial talks to final passage in less than a year.

"It really was remarkable," Kader told me.

Wage theft in the Windy City

Every week in Cook County, where Chicago is located, $7.3 million is stolen in the form of wage theft — that's more than $1 million every day, Kader said. According to an April 2010 report from the Center for Urban Economic Development at the University of Illinois-Chicago, 26 percent of more than 1,100 low-wage workers surveyed in Chicago and suburban Cook County were paid less than the legal minimum wage for the previous week's work. Twenty-five percent of respondents worked more than 40 hours in the previous week, but 67 percent were not paid overtime. And of the 26 percent of workers who reported making a complaint to their employers or attempted to form a union, 35 percent experienced one or more forms of illegal retaliation.

Take just one low-wage sector in Chicago: car washes. In surveys conducted last year by the Labor Education Program at the University of Illinois at Urbana-Champaign, more than three-quarters of surveyed workers earned below the state's minimum wage of $8.25 and 13 percent earned less than $2 an hour for the previous week's work. More than 80 percent of workers surveyed worked overtime in the previous week, but less than 2 percent earned legally required overtime wages. Over the course of a year, workers lost nearly one-third of their annual income to wage theft.

In addition to these violations of wage-and-hour laws, more than 40 percent of survey respondents suffered skin rashes and more than 25 percent experienced nausea or dizziness from exposure to cleaning chemicals. The great majority of car wash workers surveyed were not given personal protective equipment nor informed about the occupational health hazards of their work environments.

"Most businesses (engage in such practices) because they know they can get away with it," Kader said. "They count on workers being alone. ...At the end of the day, there's a lot of reasons for wage theft, but we always come back to the same solution: Workers need to be organized."

And that's exactly what's happening at the Arise Chicago Worker Center, which began in 2002. Today, the Worker Center has about 500 worker members, has helped more than 2,500 workers, and assisted in recovering just over $5 million in stolen wages and compensation for other workplace abuses, Kader said. Worker center members come from a range of low-wage sectors, such as construction, hospitality, domestic work and car washes, and are largely from Hispanic and Polish communities. Like worker centers around the country, Kader and his colleagues not only help workers fight individual cases of abuse and theft at work, but train them to become advocates and organizers for better working conditions. And also like other worker centers, Arise takes the direct approach when it comes to wage theft.

"With wage theft, we take the direct action strategy," Kader said. "On some issues, it can be more effective to work with government agencies, but with wage theft our preference is the direct one."

When a worker comes to the Arise Chicago Worker Center with a wage theft case, the first step is to sit down with the employer and talk about it — "we want to give employers a chance to make good...why bring embarrassment to the business if we don't have to," Kader noted. Unfortunately, most employers don't want to talk, so the next step is to send a request in writing and demonstrate that the "worker has a base of support, that the worker is not alone," he said. In many cases, the letter succeeds in getting a reply from the employer, but if that doesn't work, the next step is sending an unannounced delegation to the workplace to demand a meeting. And if that doesn't get a response, it's time to organize protests and attract media attention.

"The public needs to know that this is a problem of major magnitude," Kader said. "This is a significant amount of money not being paid to workers with major repercussions for the community...This is a crime — it's robbery."

With wage theft rampant in the Windy City, Kader and his colleagues began talking about larger policy solutions to the problem. They began mulling over what role the city and its licensing power could play in confronting wage theft.

And then 30-year-old Ameya Pawar was elected to the Chicago City Council in late 2011 to represent the city's 47th Ward.

A legal victory for low-wage workers

Just a few months after Pawar took office in 2012, Kader and his colleagues went to talk to him about their campaign to improve working and wage conditions for the city's car wash workers. Pawar was moved by what he heard, Kader reported, and talks quickly moved on to the larger issue of wage theft in Chicago. Eventually, Pawar became a vocal champion of the wage theft ordinance proposal, bringing it all the way to the mayor's office.

With a strong supporter in Alderman Pawar, Arise Chicago and their community allies began putting pressure on the City Council's Committee on License and Consumer Protection to pass the wage theft ordinance, which was included in a larger consumer protection bill. It wasn't easy — proponents were up against a formidable business lobby that argued the ordinance would make the city unfriendly to business. (Kader described what he called an "amazing moment" when he walked into talks with nearly 30 business lobbyists who simply wouldn't acknowledge that wage theft was problem or that such employers were operating illegally. Instead, Kader said, they simply repeated the mantra that the ordinance wasn't business-friendly.)

But, thankfully, the ordinance passed anyway — and unanimously. Now, any employer in Chicago found guilty of wage theft can have their business license revoked. In fact, Kader noted that Department of Labor officials are already referencing the new wage theft ordinance in correspondence with employers. Kader said that technically the ordinance doesn't grant the city new powers, but it does "give clarity and provides the city with the ability to point to wage theft as a legitimate reason to revoke a business license."

"More importantly, it's about what it signals to workers, to the public, to the business community," he said. "It validates that wage theft is a crisis, that's it's not an isolated problem. For me, it really legitimizes what we've been saying for years — it won't solve the problem, but it gives us another tool. ...But the policy is only as good as it affords people to organize and to use it. It really rests on the community that's directly in contact with workers to be able to point to it and say the city has an obligation to follow up."

Kader noted that while the ordinance focuses specifically on wages, it might help empower workers to speak up about other poor workplace conditions, such as safety and health violations. Indeed, Linda Forst, a professor of environmental and occupational health at the University of Illinois-Chicago, said that it seems likely that issues of wage theft and health and safety violations would go hand-in-hand — "employers that are skirting the law and rules of ethical behavior are probably skirting those things on all fronts, including on health and safety," she said.

"The work is hazardous, the wages are low, and the employers are a little looser, less formally vetted," Forst told me.

However, Forst isn't optimistic that the wage theft victory will trickle down to affect other conditions within the low-wage sector. While she noted that there is much greater awareness that occupational safety and health is a social justice issue in the same vein as wage theft and that workers may now be in a better position to advocate for themselves, "I don't have faith that it's a big priority or more worrisome to these employers." Similar to many aspects of low-wage work, there's a long way to go, Forst said.

Still, Chicago's new wage theft ordinance is a victory for the worker center movement, said Kader, who added that "naming the problem is the beginning of solving the problem." For car wash worker Nava, he said he now feels like the city is looking out for him.

"Before a boss could commit wage theft against a worker like me and get fined for it but then return to his old ways," Nava said. "Now, this law can make sure that doesn't happen."

To learn more about the Chicago ordinance and the Arise Chicago Worker Center, visit http://arisechicago.org. And click the following links to read more profiles of worker center campaigns against wage theft and other abuses in Austin, El Paso, Houston, and the Rio Grande Valley.

Kim Krisberg is a freelance public health writer living in Austin, Texas, and has been writing about public health for more than a decade.