Analysis Law and Policy

Big Shoes to Fill: Solis’ Departure Calls for Nomination of Workers’ Rights Advocate

Sheila Bapat

Who could fill Solis’s shoes and demonstrably make progress on policies impacting vulnerable workers?

Last Wednesday, U.S. Secretary of Labor Hilda Solis resigned from her position after serving in the role since the earliest days of Obama’s first term. Her departure sticks out like a sore thumb in a week when President Obama took heat for not appointing enough women to his cabinet as he begins his second term. In addition to adding gender diversity, Solis was also the first Latina to ever serve in a Presidential cabinet. As she wrote in her resignation letter, “Growing up in a large Mexican-American family in La Puente, California, I never imagined that I would have the opportunity to serve in a president’s Cabinet, let alone in the service of such an incredible leader.”

A former four-term member of Congress, there is word that Solis plans to run for office again in Southern California, possibly for the Los Angeles County Board of Supervisors.

Beyond the symbolic relevance of her presence in the Cabinet, Solis’s leadership at the DOL was significant for workers’ rights policy, and thus the question of who will replace her is one that labor and employment rights groups throughout the country are looking at with concern. As Solis notes in her resignation letter, she was a strong proponent of expanding unemployment insurance, job training programs, and implementing provisions of the Affordable Care Act.

One policy Solis does not mention in her resignation letter is Department of Labor regulations as they pertain to live-in caregivers. The Fair Labor Standards Act (FLSA) of 1938 has never required overtime or minimum wage provisions to apply to caregivers who work inside private homes to prepare meals, assist with bathing and grooming, and run errands.

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Labor groups trying to reform this exclusion found a friend in Solis, who helped develop new regulations that would apply federal minimum wage and overtime laws to caregivers. According to the National Employment Law Project (NELP), the new rules would also require wage-and-hour recordkeeping requirements. There are some 2.5 million in-home caregivers in the United States, most of them women of color, and two-thirds of whom would be affected by the new rule.

While the new regulations have been drafted and have received mostly positive public comment, they have yet to move to the next step—adoption by the Office of Management and Budget and the White House—progress that NELP and other groups will pressure the next DOL Secretary to address. Ideally the rule would pass while Solis is still serving as DOL (her last day is likely in February though this information couldn’t easily be ascertained). Rewire tried to reach Solis for comment about the new FLSA regulations soon after her resignation last week but was told she is not currently granting interviews.

“Solis has been a real champion for low wage and immigrant workers generally so she helped move these new FLSA rules through her department,” Cathy Ruckelshaus, Legal Co-Director of NELP, told Rewire. “We are hopeful the rules will be in final form before the new DOL Secretary actually starts. But whoever the new secretary is should want to carry on this new legacy.”

Such regulatory reforms are a first step in granting deeper federal recognition and protection to caregiving work in the United States—a fast-growing sector that receives low compensation, is dominated by women of color and in general is rendered invisible by labor protections and society generally. Only 15 states currently require both minimum wage and overtime pay for live-in caregivers. According to Ruckelhaus, however, since the FLSA doesn’t require these provisions, many states ignore them.

As of Monday, the DOL has changed regulations under the Family Medical Leave Act (FMLA) expanding a parent’s ability to take leave to care for an adult child. This may indicate that the FLSA regulations will also be finalized before her last day.

So who could fill Solis’s shoes and demonstrably make progress on this and a host of other issues impacting working people? The National Journal listed some potential candidates back in November, most of them women including: Maria Echaveste, formerly deputy chief of staff for President Clinton; Olena Berg Lacy, assistant secretary for pension and welfare benefits under President Clinton; and Arlene Holt Baker, executive vice president of the AFL-CIO.

NELP Executive Director Christine Owens told Rewire via email, “[NELP} doesn’t have a specific candidate in mind to replace Secretary Solis, but we feel that whoever it is should be committed to advancing the rights and interests of all workers, with special concern and attention to the communities of workers most vulnerable to exploitation [including] low wage, immigrant, women and people of color.”

Similarly, Ai-jen Poo, Director of the National Domestic Workers Alliance, hopes for a new DOL Secretary that can build on groundwork Solis has put in place. “Secretary Solis focused on vulnerable workers, and we need to boldly continue that as more and more American workers are in precarious environments,” Poo told Rewire via email.

It’s now incumbent on the President to make a bold choice on behalf of workers, as well as to build the diversity of his second-term cabinet.

News Economic Justice

Wage Theft Could Cost $32 Million Weekly for Pennsylvania’s Low-Wage Workers

Michelle D. Anderson

Advocates say that government oversight is weak, and laws only provide a slap on the wrist when they are enforced. Pennsylvania—much like the federal government—lacks enough regulators.

The U.S. Supreme Court’s recent refusal to consider a case involving several thousand Walmart employees brought attention to what employment advocates in Pennsylvania call a hidden crisis: wage theft.

Legal aid agencies and advocacy organizations such as the Pennsylvania-based Women’s Law Project use the term to describe employers’ refusal to pay wages due their workers.

“Shortchanged: How Wage Theft Harms Pennsylvania’s Workers And Economy,” a study released by the Sheller Center for Social Justice at Temple University’s Beasley School of Law, revealed that cooks, dishwashers, and food preparers, along with stock/office clerks and retail salespeople, were among the largest low-wage worker groups experiencing weekly minimum wage violations.

Employers commit wage theft by paying a daily rate that does not meet Pennsylvania’s $7.25 hourly minimum wage requirements, misclassifying people who work as independent contractors, paying in cash, failing to keep adequate records, and taking money out of paychecks to account for uniforms, supplies, and other products necessary to perform the job.

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Terry L. Fromson, managing attorney at the Women’s Law Project, a public interest legal center, told Rewire that the practice compromises women’s economic security in Pennsylvania, where women make up about two-thirds of people who work for minimum wage, and where the minimum wage is the lowest allowed by federal law.

“Factor in losing 15 percent of a would-be paycheck to wage theft, and a family led by a primary or sole breadwinning mother sinks further into poverty,” Fromson said.

In the Walmart case, first decided by a Philadelphia jury in October 2006, 186,000 current and former employees from the retailer’s Pennsylvania stores were awarded $187 million in a class action suit for unpaid wages that were withheld between March 1998 and April 2006.

The workers’ counsel, Donovan Litigation Group, said the employees had been owed $140 million of the $187 million and will now split $224 million due to interest, according to the Philadelphia Inquirer.

Walmart had appealed the decision in 2006, taking the case to Pennsylvania’s Supreme Court, who affirmed the jury verdict in 2014. U.S. Supreme Court justices on April 4 decided to not take up the case and to support the state’s high court decision.

In the years since Walmart employees first took action, workers and legal aid agencies across the United States, including in Pennsylvania, have brought many more wage theft cases.

Last year, for example, more than three dozen people who work for low wages at the Denver-area Carniceria y Verduleria Guadalajara grocery store won $305,000 in back wages and penalties in a U.S. District Court ruling using federal and state “wage theft” laws.

Papa John’s franchisees in New York were found guilty of wage theft last year and ordered to pay back more than $500,000 to settle claims that they swindled employees out of earned income.

There remains, however, little information as to how prevalent wage theft has become across the country, advocates for low-wage workers told Rewire. The Sheller Center last year sought to fill the void in wage theft data in Pennsylvania.

The study, which used the state’s right-to-know law to obtain data from the Pennsylvania Department of Labor and Industry (DLI) and relied upon extrapolations rather than original data, found that the state’s people who work for low wages, on average, lose about 15 percent of the their earnings to wage theft.

The study suggested that nearly 400,000 people who work in Pennsylvania experience a minimum wage violation and more than 300,000 experience an overtime violation every workweek. The weekly loss amounts to an estimated $19-32 million in wages, according to the “Shortchanged” authors.

The study revealed that the DLI, the state agency responsible for handling wage theft matters, was unable to collect wages in more than half of the complaints filed by people who work.

In fact, despite closing 5,000 cases annually, the DLI collects wages in about 2,000 of those incidents, according to the Temple University study.

The U.S. Department of Labor in a study released last year acknowledged the prevalence of wage theft among wage and salary workers in California and New York.

The report concluded that more than 300,000 people who work in those states were victims of wage theft. Many of those affected, the federal study revealed, work in service-based positions in the restaurant and hotel industries and were more likely to be women, people of color, and undocumented people.

Undocumented residents in New York, for example, were 3.1 times more likely to experience wage theft.

A local report released by Centro de Trabajadores Unidos en Lucha in Minneapolis found that nearly half of low-wage workers in the Twin Cities have experienced wage theft.

Nadia Hewka, senior attorney at Community Legal Services, a Philadelphia-based legal aid outlet, said many businesses exploit undocumented workers’ vulnerabilities.

“Employers cut corners—some of them will choose to hire immigrant workers because they think they won’t complain,” Hewka told Rewire.

At Community Legal Services, Hewka said many people who work don’t know they are entitled to overtime and often seek to recover wages after they haven’t been paid for extended periods of time.

“That often happens with immigrant workers who are not familiar with laws in the U.S.,” said Hewka, co-founder of the Pennsylvania Immigrant Workers Rights Coalition.

The “Shortchanged” authors noted that undocumented workers fear their supervisors will call immigration authorities, while immigrants with employment visas are often afraid they may lose visa privileges if they speak up.

Identifying Wage Theft

The Temple University study, which excluded low-wage employees in more rural settings, like farm, forestry, and fishing workers, outlined the many ways employers get away with wage theft.

The report relied upon a landmark investigation released in 2009 called “Broken Laws, Unprotected Workers,” which surveyed low-wage workers in Chicago, New York City, and Los Angeles.

The “Broken Laws” study estimated about 90 percent of home health-care workers were victims of off-the-clock violations.

Philadelphia resident Natasha, whose last name was withheld by the “Shortchanged” authors, was a victim of wage theft while working as a home health-care worker.

Her employer, who often avoided workers and created barriers to keep employees from engaging each other about their paychecks, failed to compensate Natasha for travel time between client homes and even missed paycheck due dates.

The mother of four, who made $9.50 per hour and witnessed her boss call the police on coworkers who complained about wage theft, was ultimately fired after becoming ill despite her stellar attendance and documented excuse for missing work.

“I was so frustrated and I wanted to break down and cry because I couldn’t spend another week not being able to feed my children, having to choose between bread, eggs or milk,” she said, according to the study. “It was the worst experience of my life.”

Advocates for people who work low-wage jobs contend that wage theft also hurts the state’s economy, because money that would otherwise be spent in the economy is stolen from people who work, while businesses evade taxes that could be used to fund schools and road projects.

Law-abiding businesses may struggle to compete with enterprises that steal wages, advocates said.

The U.S. Department of Labor study noted that the burden of wage theft ultimately shifts from the private sector to the government because people who work for low wages will seek public assistance if their pay is insufficient.

People who work for low wages and their allies have looked to key policy changes to address wage theft, though it’s proven difficult because of resistance in Pennsylvania’s Republican-controlled legislature, Hewka said.

Some measures proposed during the 2015-2016 legislative session, like HB 250, which sought to raise the penalty for wage theft and for retaliating against an employee for reporting said theft, get stuck in committees and die there, she said.

A resolution to discharge the house’s labor and industry committee from further consideration of HB 250 was presented in October 2015.

Legislators in other states have proposed measures aimed at addressing wage theft. Democratic lawmakers in Wisconsin last year proposed legislation that would allow the state’s Department of Workforce Development to charge interest on unpaid wages and levy fines up to $1,000 per violation against employers who break state wage theft laws.

Hewka added that government oversight, overall, is weak and laws only provide a slap on the wrist when they are enforced, she said. Pennsylvania—much like the federal government—lacks enough regulators, she said.

In Pennsylvania, the Minimum Wage Act and the Wage Payment and Collection Law are the protections low-wage workers can rely on to reclaim stolen wages.

The Wage Payment and Collection Law limits penalties to the higher of $500 or 25 percent of wages owed, and includes criminal fines limited to $300.

The state’s minimum wage law, on the other hand, doesn’t offer any damages to people who work low-wage jobs, unlike federal law.

“Shortchanged” authors have recommended harsher penalties for employers, including business license revocation and allowing people who work to place a hold on employer’s property until they receive unpaid wages.

Other solutions encourage state policymakers to collaborate with community groups to target investigations and to create a process for workers to submit anonymous or confidential complaints.

The state has enjoyed some successes in battling systemic wage theft against people who work.

Philadelphia City Councilman William “Bill” Greenlee sponsored a bill that will create a wage-theft watchdog in the city’s Managing Director’s Office.

The bill, which was unanimously approved by the council in November, requires a wage-theft coordinator to respond to worker complaints and find victims who may lack education about their rights.

The coordinator will be responsible for looking at thefts of anywhere between $100 and $10,000, and can revoke business licenses and impose a city fine of $2,000 per incident.

Hewka, who worked with Greenlee on the measure, said the city should be prepared to handle complaints in July.

The measure, she said, will offer relief to low-income citizens who cannot afford a private lawyer and legal aid groups who can only provided a limited amount of free services.

News Economic Justice

Tens of Thousands Take to the Streets in Nationwide Fight for $15

Kanya D’Almeida

What began in 2012 as a movement of a few hundred fast-food workers demanding decent pay reached a climax yesterday, with both Democratic presidential front-runners tweeting their support for the #FightFor15 protesters who marched in 400 cities, according to some estimates.

Tens of thousands of workers took to the streets in hundreds of cities across the country Tuesday calling for a $15 minimum wage.

The #Fightfor15 movement began in 2012 with a few hundred fast-food workers. By November 10, exactly a year before Election Day 2016, it had captured national headlines, with both Democratic front-runners tweeting their support for workers who marched in 400 cities, according to some estimates.

Backed by the Service Employees International Union (SEIU), Tuesday’s nationwide action saw home care workers and adjunct professors standing arm-in-arm with retail workers and restaurant employees demanding the right to unionize without fear of retaliation, and a hike in the federal minimum wage, which has been frozen at $7.25 an hour since 2009.

An estimated 42 percent of the U.S. workforce currently earns less than $15 an hour, a new report by the National Employment Law Project (NELP) found, with women and people of color vastly overrepresented in this demographic.

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Female workers comprise 54.7 percent of those earning under $15 hourly, even though they account for less than half of the total workforce48.3 percent—while African Americans, who make up just 12 percent of workers, represent 15 percent of low-wage employees.

Latinos are by far the most overrepresented, making up 16.5 percent of the labor force but comprising almost 23 percent of those earning less than $15 an hour. Nearly 60 percent of Latino workers and more than 50 percent of Black workers fall into the sub-$15 category of earners.

Rallies, walkouts, and strike actions held Tuesday highlighted links between racial and economic justice. The estimated 1,000 protesters who gathered outside the auditorium in Milwaukee, Wisconsin, where this week’s GOP debate was taking place, marched behind a banner that read, “Black Lives Matter. Immigrant Justice. Fight for $15.”

Despite protesters challenging Republican candidates to “come get my vote,” not one of the eight GOP front-runners offered support for higher wages in their responses to debate questions. An estimated 35 million Americans currently earn less than $10.55 an hour.

NELP research reveals that the leading industries for under-$15 hourly wages include food services, private households, agriculture, retail, and support services.

In food and retail services alone, a combined 7.7 million people take home less than $31,000 annually by some estimates.

Quoting statistics from the Bureau of Labor, the Pew Research Center puts the number of workers at or below the federal minimum wage at 3.3 million, the vast majority in food preparation and retail service industries.

The government calculates the annual income of a federal minimum wage worker to be $15,080, a figure that does not sit well with research from the Center for Poverty Research at the University of California, Davis, which puts the poverty threshold for a family of four at $22,283. The poverty line for a family of two is $16,078 according to the Economic Policy Institute.

Aside from fast-food workers, who form the core of the movement, care providers have been among the most vocal advocates for better pay. The vast majority of some two million employees in the home care industry are women of color.

Home care workers in Cleveland, Ohio, braved the rain outside City Hall Tuesday, while in San Diego, United Domestic Workers of America (UDWA) member LaTanye Cline addressed a huge crowd when she said, “Across California home care workers are joining the nationwide fight for $15. We won’t just sit back and watch while politicians and CEOs cut benefits for low-income workers while padding their own pockets.”

Tuesday’s actions coincided with a series of scattered but significant victories for the movement. Pittsburgh Mayor Bill Peduto issued an executive order requiring city employees to be paid at least $15 per hour, and called for legislation that would mandate contractors to pay the same by 2021.

New York Gov. Andrew Cuomo announced that all state workers would be guaranteed a $15 hourly wage by the end of 2018, marking the first time a governor has unilaterally mandated a wage increase for the entire state.