The San Diego City Council on Tuesday moved to strengthen the city’s power to prosecute employers who commit wage theft.
The City Council on an 8-0 vote approved amendments to its Earned Sick Leave and Minimum Wage Ordinance to crack down on unpaid wages, recover overtime pay and align local sick leave rules with California state standards.
San Diego City Councilmembers Marni von Wilpert and Sean Elo-Rivera proposed the amendments to the law, which currently does not authorize such civil actions.
“Our city’s minimum wage is only as strong as our ability to enforce it,” von Wilpert told the council. She pointed to the upcoming raise in the city’s minimum wage, to $18.35 an hour starting in January, saying “that raise only matters if the money makes it to a worker’s paycheck.”
A city staff report gives several examples of wage theft. Along with not paying minimum wage, these include not paying overtime, not allowing breaks, asking people to work “off the clock,” not granting or allowing the use of earned sick leave, making unlawful paycheck deductions, wrongly classifying employees as independent contractors, not reimbursing employees for business expenses and stealing tips.
Von Wilpert added that the changes to the ordinance, which was last substantially updated in 2016, strengthen the ability to enforce existing laws but does not create new obligations for employers.
“This is also about protecting law-abiding businesses, who are often undercut by businesses who are cutting corners by not paying their workers,” she added.
Elo-Rivera said the changes respond to a double standard in which stealing from a cash register is deemed “a crime” but taking $100 out of a worker’s paycheck is “just an ordinary way of doing business.”
“Stealing is wrong. It shouldn’t matter whether you’re wearing a ski mask or a business suit,” Elo-Rivera said.
By authorizing the city to bring civil suits on behalf of employees, this change protects workers who are “already struggling to get by.” Without such protection, “too much of the burden to get that money back falls on them,” he said.
The law passed after brief public comment. Councilmember Vivian Moreno was absent.
San Diego’s scrutiny of its wage theft law fits in with a broader, sustained focus by cities across the nation to enforce wage theft laws. New York City recently helped its workers recover stolen wages. In September, its Department of Consumer and Worker Protection announced a $131.5 million enforcement action against DoorDash for violations of delivery worker laws, with more than $115 million earmarked for the city’s more than 260,000 delivery workers.
And this month City Attorney Heather Ferbert, along with California Attorney General Rob Bonta and the city attorneys of Los Angeles and San Francisco, announced a $272.5 million settlement with ride-hailing company Lyft, which is pending court approval. The settlement responds to allegations that Lyft for years committed wage theft by misclassifying its drivers as independent contractors instead of employees. California’s Lyft drivers will receive $237 million of the settlement, “with millions of dollars expected to go to drivers in San Diego,” according to a news release.
The city’s amendments update the law around the minimum wage in three main ways:
The updated section on wage theft empowers the city to sue noncompliant employers on behalf of employees suffering from wage violations, collect the owed wages, sick leave damages or other damages, and distribute those to the victims — a change that greatly expands the city’s enforcement ability.
The new language also specifies that minimum wage must be paid for all hours worked, including overtime. This doesn’t specify that overtime work must be paid at a premium, but that all hours worked must be paid at least the city’s minimum wage, which is $17.75 an hour for workers in most sectors.
The changes also “clarify that employees are entitled to be paid for overtime hours and may seek to recover unpaid overtime wages,” the staff report says.
The cost to enforce the law can be offset by grant revenue, enforcement penalties, and user fees set up to fund Office of Labor Standards and Enforcement programs, the City Attorney’s Office said in the staff report.
Under the current law, workers can file a complaint with the city’s Office of Labor Standards and Enforcement.
The City Council has been exploring ways to give the city more enforcement muscle regarding wage theft since at least April, when its Public Safety Committee discussed an amendment that would have allowed the city to “bring misdemeanor charges against employers who commit wage theft.” The decision to focus on wage theft was informed by data from the Center on Policy Initiatives, which has been tracking wage theft locally, in tandem with San Diego State University.
Their research found that 87% of surveyed workers in the San Diego region experienced wage theft, CJ Valasek, a researcher and policy analyst with the center, said in a public comment during the meeting.
This summer, the U.S. Department of Labor recovered more than $500,000 in back wages for six deli workers employed by A Chau Sandwich who weren’t being paid San Diego’s minimum wage for regular or overtime hours. These victims were working 11-hour days and averaging 55 hours per week. Their pay was flat rate of $100 per day. Each worker was given around $83,000 in owed wages after the investigation.
The amendments also make several refinements to the existing sick leave section to put the local law in sync with state law. State sick leave offers more protections for workers than the current city law, so these changes narrow or erase that gap.
The updated law specifies that workers are presumed to be employees, and not independent contractors, unless proven otherwise by meeting conditions in the state labor code.
It also expands how and for whom earned sick leave can be used, adding preventative care and care of a family member as legitimate options.
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