York City — found that two-thirds of low-wage workers
have been the victims of wage theft.
The loss of a small amount of money from a paycheck
might be a hindrance or nuisance to someone more
fortunate, Dale says, but, “We’re talking about people
living hand to mouth on a shoe string.”
He continues, “In my experience people who are
getting ripped off understand they are getting ripped off
but may feel if they raise the issue that they will wind up
with no job at all.”
Oregon’s minimum wage, currently $9.10 but soon to
be $9.25, is tied to inflation and is one of the highest in
the nation. Still, at that rate, a family of three supported
by a minimum-wage worker employed full-time remains
below the federal poverty line.
Schuck says the recent cases he’s seen involve instances
such as people who have to go to mandatory job training but
don’t get paid for the hours they spend there. A current case
before the U.S. Supreme Court involves claims of unpaid
wages for the time spent in security screening lines at the
end of shifts by hourly warehouse employees contracted
out with Amazon.com. Employee Jesse Busk alleges he
spent up to 25 minutes a day, unpaid, waiting in line.
Schuck says such gambits work for companies because
not only are people afraid of losing their jobs, they are
afraid of later problems. For instance, if they file a claim
after they quit, they fear that their former employers might
give them a bad recommendation. Schuck often tells
workers to come back and talk to him about litigation for
lost wages after they have already gotten another job.
In a class-action suit filed in Eugene, Logan and Corbyn
Vance, workers at Little Big Burger near the UO campus,
allege that they and other employees worked more than 40
hours a week but were never paid overtime. Logan Vance
also alleges he was fired in retaliation for complaining that
workers were not getting paid overtime and suggesting to
other workers that they take action to get their pay. Little
Big Burger says as the matter is proceeding in court,
they’re unable to comment on it publicly.
Oregon law protects workers from retaliation, Schuck
says, but he also notes that just as wage laws are violated, so
are the laws designed to protect workers from retaliation.
“I always tell a potential client of the risk,” he says.
The issue of wage theft is underreported because, as
local attorney Drew Johnson points out, “It’s better to
have a job than a wage claim.”
Communications Director Charlie Burr, the case is still
open in BOLI’s administrative prosecution unit. BOLI is
looking into X Wall Incorporated, a subcontractor of CEI,
which was Capstone’s general contractor on the project.
Capstone’s Eugene spokesman Pat Walsh says the
company “believes that its contractors and subcontractors
must follow all local, state and federal employment laws.”
He says that “because this is an ongoing investigation it’s
not appropriate to comment further.”
Burr says BOLI gets contacted not only by workers
themselves but also sometimes by a third party, like the
carpenters union. For example the union might suspect
its workers are not getting paid the prevailing wage on a
construction project. The prevailing wage is basically the
minimum wage workers can be paid on a public project.
To Nike’s apparent dismay, the Oregon Legislature in the
2013 session passed a bill requiring prevailing wages to be
paid on land that the Oregon University System owns or will
use, occupies or ultimately owns, even if the construction or
renovation is paid for by a private entity. Phil Knight of Nike
has paid for millions of dollars in construction at the UO,
and The Oregonian reported that a Nike lobbyist made a last-
minute attempt to pull the vote in the House before it passed.
Burr says BOLI does not act like an advocate for the
complainant when it investigates. However, according to
Gerhard Taeubel of BOLI’s Wage and Hour Division, if
the agency does find a violation, it can make a monetary
finding — it can attempt to collect the wages, and if there
are record-keeping issues, can assess penalties.
If the company has repeated violations, then Burr says
BOLI can seek debarment, meaning it’s not eligible to be
paid on a public project for three years. He says there are
more than 80 contractors currently debarred in Oregon.
Local Claims
Leiman and Johnson represented several workers in
class action litigation against Delta Sand and Gravel that
resulted in a settlement of $1.3 million. Payments from
$4,000 to $20,000 began in early November. The workers’
allegations included that Delta didn’t pay the correct
overtime, didn’t pay the correct prevailing wages on public
works projects and failed to accurately track, record and
classify work, which resulted in underpaid wages.
In March 2012 and April 2013, after a BOLI
investigation into Delta’s prevailing wage practices, the
‘In my experience people who are getting ripped off understand
they are getting ripped off but may feel if they raise the issue
that they will wind up with no job at all.’
— MICHAEL DALE , NORTHWEST WORKERS’ JUSTICE PROJECT
Complaints and Justice
Johnson litigates class-action suits involving wage
claims in Eugene together with fellow attorney Alan
Leiman. Class-action suits occur when one person or a
group of people sue on behalf of a larger group of people,
usually in an effort to create change.
Leiman says he has seen companies change their
problematic policies, such as altering time clocks, soon
after a case is filed against them. He says one common form
of wage theft is companies who “promote” an employee to
a salaried, instead of hourly, managerial position, exempt
from overtime pay. The employee thinks he has a promotion
but instead works longer hours for less money.
In addition to talking to an attorney, there are several
routes workers can go if they think they have a wage claim.
Unions such as the Pacific Northwest Regional Council
of Carpenters will help members as well as nonmembers
negotiate the intricacies of filing a wage claim. “We
try to be almost an advocacy group for worker justice,”
Basom says. “We like to be a place people can turn to for
assistance” because the process can be daunting.
The council supported workers in allegations made
in the fall of 2013 involving the the Eugene Capstone
student housing project, in which workers complained
of unpaid overtime, checks being withheld and
unsafe and unsanitary conditions. According to BOLI
company paid $404,000 to the four workers and more than
100 other employees and former employees. In addition to
BOLI, workers who believe they are not getting their full
wages can also turn to a private attorney and file either a
personal case or a class-action suit.
The four plaintiffs alleged that the BOLI settlement did
not result in the full wages owed. The two sides mediated
and a settlement was reached in May 2014, according to
court documents.
Delta issued a statement saying the company “is
pleased to have the recent lawsuit settled.” And adds, “The
management team can now completely focus our time
and energy to operating and growing our family-owned
business,” concluding that it appreciates and values all its
employees, past and present.
In another class-action suit, this one against Seneca
Sawmill, David Scott, a chipper operator who was working
at Seneca’s Hwy. 99 mill complex, alleges that workers
were given reduced pay for meal breaks for which they
didn’t get the full 30 minutes, and that the mill switched
workers’ start times from the time they clocked in to a
different set start time.
The August demand for a jury trial also says that
because break times and start times were changed,
workers are also owed for overtime wages.
Seneca Vice President and General Manager Todd
Payne says that Seneca “has reviewed the litigation and
believes it is without merit. Seneca will vigorously defend
the litigation and expects to prevail.”
Honest and Not-So-
Honest Mistakes
If companies risk large penalties from BOLI — this
past summer Google’s data center in The Dalles was hit
with $20,000 in civil penalties for meal and rest period
violations in its construction — or costly lawsuits, why
then engage in dubious payroll antics?
Leiman says that the little bits of time employers skim
off paychecks add up to hundreds of thousands of dollars in
profits, increasing over time, making it worth the risk. He
points out that this means the community loses out in payroll
taxes that go to support needs such as mass transportation.
Eugene attorney Margaret Wilson has worked on
both sides of the issue. She has represented employees in
claims against companies, but also represents and advises
employers. She says in her work she has come across some
unscrupulous businesses who don’t follow the law and
don’t pay minimum wage, but she also deals with a lot of
small businesses who “don’t know the law, who make a
mistake and want to make it right.”
Wilson says some small businesses she’s dealt with
have accidentally paid “straight time” (regular wages)
instead of overtime, which is regular wages plus half of
that wage, simply because they didn’t know the law.
Wilson says for those small companies, their errors
can hurt them badly — even put them out of business
because costs can be huge from penalties to attorneys’
fees. For example, she says in a minimum wage suit, the
employer could wind up owing 30 days worth of wages
— more than $2,000 — even if the claim was only for a
couple hours’ worth of lost wages.
“Wage laws are really complicated,” Wilson says.
“Most of the time employers don’t really know the law.”
If a company does go out of business or can’t pay, Oregon
has a Wage Security Fund that many people don’t know
about, Wilson says, that can pay up to $4,000 per worker.
One thing Wilson runs into is employers who download
a handbook off the internet that isn’t specifically for
Oregon — Oregon has really strict laws and is different
from other states, she says. She recommends looking at
the BOLI website or getting a lawyer to help navigate the
wage system. “Good people, nice people inadvertently
screw up,” she says.
Solutions?
“Payroll fraud is a huge, huge thing,” Basom says. And
it doesn’t just hurt employees, it hurts other companies.
“In construction, for example, contractors save 30 percent
using these practices” and put forth lower bids on contracts
“stealing jobs from honest contractors.”
He says the companies “are not paying their taxes and
that accounts for billions and billions in unpaid taxes, taxes
that should be going to pay for schools, infrastructure,
roads and things like that communities need.”
Basom points out Capstone was given more than $8
million in tax breaks from the city of Eugene.
Workers can turn to lawyers and to BOLI. They can also
turn to advocacy groups such as the Northwest Workers’
Justice Project. One of NWJP’s projects is the Oregon
Coalition to Stop Wage Theft, which is made up of unions,
religious groups and nonprofits such as Eugene-based Beyond
Toxics, Community Alliance of Lane County and Centro
Latino Americano. Among the group’s goals are stronger laws
and stronger enforcement on claims. To that end it is pressing
the Oregon Legislature for more changes in the next session.
Dale of NWJP says, “People should know that wages
get stolen, and to the extent they want to be part of the
solution, there are very basic things they can do.”
He suggests that if you contract with someone to
provide services, check to make sure they are paying
workers fairly — with a few narrow exceptions, paying
the minimum wage is the law. He also advises paying tips
in cash. “If it’s on the credit card, 60 percent of the time it
never gets to the workers, national studies show.” ■
eugeneweekly.com • November 13, 2014
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