S.J. may broaden wage protections

Last summer, US Labor Department found that workers on Silvery Towers project had been held in squalid conditions without pay

Months after it surfaced that workers on a high rise in downtown San Jose were held in captivity and forced to work without pay, the City Council is expected to consider stronger wage protections to prevent companies from refusing to pay employees what they deserve.

In a memo to the city’s Rules and Open Government Committee, several members of the San Jose City Council — Raul Peralez, Chappie Jones, Magdalena Carrasco and Sergio Jimenez — suggested broadening the city’s current wage theft protections to cover construction workers on both public and private projects.

They also said developers proposing construction projects involving more than 5,000 square feet of floor area should have to disclose wage theft violations by their contractors and subcontractors. If companies are found to have unpaid wage theft claims, the council members argued, they should be disqualified until the claims are paid.

In July, the U. S. Labor Department announced that more than a dozen immigrants working on the Silvery Towers project at the corner of N. San Pedro and W. St. James streets were held in squalid conditions in a Hayward house and forced to work on projects across the Bay Area.

The changes, the council members wrote, “will ensure that another Silvery Towers does not occur again and that the city is not blindsided by another atrocity.”

Under normal circumstances, the proposal would have been discussed by the committee and then moved on to the full council for consideration. But several years ago, three of the council members discussed wage theft protections, an inadvertent violation of the Brown Act, which outlines open meeting requirements for local governments, said City Attorney Rick Doyle. Ultimately, Doyle said, the committee couldn’t discuss the issue, but could refer it to the March 1 priority setting meeting, where the council will lay out, in order, goals for the coming months.

Construction workers and labor groups urged the council to make broadening its wage theft policy a priority. However, business groups warned doing so could create demanding new regulations for developers and hamper the city’s aim of adding thousands of new affordable homes in the next few years.

“It is the ethical and quite honestly the honorable thing to do,” said Steve Flores, with the group Santa Clara County Residents for Responsible Development, adding that the update would close “gaping loopholes” that leave construction workers fending for themselves.

The vast majority of workers who win wage theft judgments never actually recover their earnings. And according to the council members’ memo, one in six California construction workers is a victim of wage theft. That’s especially true for immigrants. Companies regularly refuse to pay for overtime or misclassify workers as independent contractors. Since 2011, the memo says, some 7,000 construction workers at more than 500 companies in the Bay Area alone have been the victim of wage theft.

The city, said Louise Auerhahn of Working Partnerships USA, which advocates for workers, should not tolerate bad employers and “should be lifting up” honest contractors.

But Eddie Truong of the Silicon Valley Organization, a business- advocacy group, said the proposed changes would have unintended consequences by adding “onerous” regulations that would force developers to navigate a web of bureaucracy.

Scott Knies of the San Jose Downtown Association agreed.

The proposal, he said, was “way too broad.”

“The city manager’s going to need a new office” just to deal with the paperwork, Knies said, adding, “You really need to think about the implementation.”

Both sides will have another chance to make their case in a few weeks when the council sets its priorities.

Forest Peterson, a doctoral student at Stanford University who studies wage theft, said he was encouraged to see San Jose considering the issue.

Protecting workers, he said, is “something that San Jose can show leadership on.”