Illegal Immigrants Vulnerable : Minimum Wage Abuses Common for the Very Poor

For more than a year, Rene Godoy worked at the Bel Air Car Wash on North La Brea Avenue, but there was no record of his employment on the company’s books and he received no salary.

Godoy’s only pay was the tips he received from some of the customers whose cars he dried with an old rag after they came through the cleaning machines at the car wash.

Then, the Los Angeles office of the U.S. Labor Department’s wages and hours division was told confidentially that some workers at the car wash were not being paid a salary, an apparently clear violation of federal minimum wage laws.

The agency launched an investigation and discovered that Godoy had gone without wages for 88 weeks and that Alfredo Sanchez had worked only for tips for 20 weeks, according to federal records obtained under the Freedom of Information Act. The government ordered the car wash’s owners to pay Godoy $7,075.20 and Sanchez $2,197.60 in back wages, a Labor Department official said.

The official, Ned Sullivan, Los Angeles-area director of the wages and hours division, said he suspected Godoy and Sanchez endured their unsalaried status because they were undocumented aliens who feared being deported if they complained. (They are no longer working at the car wash and could not be found to be interviewed.)

Sullivan said Godoy and Sanchez have lots of company in Los Angeles. He said thousands of workers are victimized by employers who fail to pay them the minimum wage and that a large number of them are employed off-the-books so companies can avoid taxes.

“It’s very chic in L.A. to keep two or three sets of records--one for me, one for the IRS” and a real set, Sullivan said.

He said Godoy and Sanchez made only about $10 a day in tips at the car wash.

Sullivan’s boss, Herbert A. Goldstein, regional director for the Labor Department’s wage and hours division in San Francisco, said he was appalled by this case. “It is very egregious” to pay someone only tips, he said, “particularly at a car wash where you’re not going to get great tips. How many people tip at a car wash? I can’t remember ever tipping at a car wash.”

When Bel Air Car Wash’s owners initially were confronted by government investigators, they said all their employees were on the payroll and on daily time sheets, according to Labor Department records. But when wages and hours investigators presented Godoy and Sanchez to them, they acknowledged that the men worked there. The owners then said they did not know the names of all employees and assumed that a foreman had put the two men on the payroll. The owners later agreed to pay the back wages, according to government records.

‘A Very Bad Scene’

Still, Lorman Frieden, co-owner of the car wash, said in an interview “the amount of money we had to pay was ridiculous. . . . This was a very bad scene for us.”

Sullivan said that, unlike Godoy and Sanchez, many people who are paid less than the minimum wage are unwilling to come forward and testify because they fear losing even meager-paying jobs.

“The labor market here gets uglier by the hour,” Sullivan said. “As the economies in the Third World continue to deteriorate, there’s an ever larger work force willing to work at subminimum wages in the United States.”

In Los Angeles, wage violations primarily are found in the construction, garment and restaurant industries, he said. Other sources said there also are violations in other industries, including car washes, electronics, footwear and furniture manufacturing.

And some knowledgeable observers of the local work force say that the Immigration Reform Control Act has led to increased abuses of minimum wage laws. These sources say employees who are working here illegally now have less mobility in the job market and thus are easier to exploit. These workers, who did not qualify for legal work status under amnesty provisions, now live in greater fear than before of legal sanctions or deportation, the observers say.

Los Angeles is not the only city where these problems are found, but Sullivan and others said they are more acute here because of the large number of undocumented immigrants.

According to a recent report by the Government Accounting Office, sweatshop conditions exist throughout the United States, primarily in apparel manufacturing, restaurants and meat-processing factories. Besides wage violations, a number of these businesses have health and safety violations but enforcement of those laws is hampered by a lack of coordination among responsible government agencies, the report said.

For the fiscal year ended Sept. 30, Region 9 of the wages and hours division conducted more than 6,000 investigations and found that about 43,000 employees in six Western states were owed more than $15 million in unpaid minimum wages or unpaid overtime, Goldstein said.

Many of the cases are small. In late 1987, Sullivan’s office recovered $200,000 in unpaid minimum wages and overtime for 214 employees of a Los Angeles garment manufacturer. Sullivan said that the agency could help a lot more workers and collect a lot more money if it had a bigger staff. He said he had only 19 investigators to cover the area from Garden Grove to the city of Cambria near San Luis Obispo.

Sullivan said the number of investigators has decreased during the Reagan Administration and is so small that it is hardly a significant deterrent.

“An employer could be out of compliance (with minimum wage laws) for five or six years without being the target of any investigation” because Labor Department staffing is so inadequate, said Rep. Augustus F. Hawkins (D-Los Angeles), chairman of the House Education and Labor Committee.

Sullivan said that despite the Immigration Reform Control Act, with its penalties for employers caught hiring illegal immigrant workers, “there is still a huge incentive to employ illegal aliens” who can much more easily be exploited than workers who are citizens or aliens with work permits.

Can’t Impose Fines

The effectiveness of minimum wage laws also is hampered because, although the Department of Labor can order an employer to pay back wages, it cannot impose fines for wage and overtime violations of the Fair Labor Standards Act, according to the GAO report.

Roger Miller, regional manager of the field enforcement bureau of the state labor commissioner’s office in Los Angeles, also said minimum wage violations are widespread. In fiscal 1987-1988, the state collected more than $25 million in unpaid back wages and overtime.

In one instance a North Hollywood restaurant was ordered to pay $21,138.05 in back wages to 25 workers. In another instance, 66 furniture workers told state officials that they were each owed about $435 in wages because their employer, Catalina Furniture, unexpectedly closed down in March, 1986, and gave them checks that bounced, Miller said. The case is still pending.

Like Sullivan, Miller said his agency does not have nearly enough resources to deal with the problem.

“We have 37 enforcement staff for all of Southern California,” from the Mexican border to Santa Barbara, Miller said. And those investigators also have to look into complaints about public works projects and unlicensed construction contractors. “Consequently, something has to give.”

What has to give, according to Fran Bernstein and Alice Callaghan, is any meaningful enforcement of wage violations in the local garment industry. “It’s basically an unregulated industry,” said Bernstein, a Legal Aid Foundation lawyer who specializes in employment issues.

Callaghan runs Las Familias del Pueblo, a nonprofit organization that has been an advocate for the poor in the Central City for more than five years. About a year ago, Las Familias started working on minimum wage problems. At first, Callaghan and her colleagues handed out Spanish-language leaflets explaining workers’ rights at bus stops at 6:30 a.m. and pasted leaflets on walls and telephone poles.

Then, last summer Callaghan and her staff brazenly launched a string of educational raids into garment factories--darting right past foremen, handing out flyers, asking workers what they are paid and telling them where to go for help before she was thrown out of the factory.

“In the Central City, we have visited most of the factories at least once,” she said. “We have found (minimum wage) violations at 75% of them.”

She also noted that many of the people with minimum wage problems also are not paid overtime, are denied lunch hours and break time. And she said virtually none of the workers in many garment shops get paid vacations or medical insurance.

High Turnover

Only a tiny fraction of the industry in Los Angeles is unionized and there is a one-third turnover every year in companies operating here, Miller said. The newer companies, which tend to have fewer resources, are the ones more likely to commit violations, he said.

A tour of the garment industry with Callaghan and Marcos Cajina, also of Las Familias, one recent morning provided an indication of the extent of wage violations. A group of workers at one shop said they were making $73 to $100 a week for 55 hours work. Under the state’s minimum wage of $4.25 an hour, they should be making $233.75 for 55 hours.

At another shop, Felipa Vega said she was paid $60 a week in cash for 40 hours work. A native of Guadalajara, Vega said she had started working at this factory two years ago after losing a job she had had for 15 years when her previous employer died.

In fact, at every shop visited, some workers said they were being paid below the minimum wage.

Cajina said Las Familias is able to settle some cases informally but that many have to be referred to the state, the federal government, the city attorney’s office or Legal Aid to get compensation for underpaid workers. He said the state Labor Commission typically had a four-month backlog and that it frequently took a year to get a case resolved.

Bernstein said about 30 new cases of wage violations come into Legal Aid offices here each week. Virtually all of them, Bernstein said, come from people who only speak Spanish. “We see a lot of people being paid $1 or $2 an hour,” she said.

Anthony Mischel, another Legal Aid lawyer, said the number of cases formally opened by the office more than tripled between 1986 and 1988.

He said the increase could be attributed to three factors: the fact that the state’s minimum wage was increased substantially from $3.35 to $4.25 an hour last July (higher than the national minimum wage of $3.35), the impact of the Immigration Reform Control Act and the outreach program of Las Familias.

Try for Settlement

Legal Aid attorneys try to settle these cases out of court if possible. They said that it takes a long time to process a lawsuit and even if the case is won a judgment is not always collectible. “Sometimes the contractor declares bankruptcy and there’s no money to collect,” Mischel said.

In one case, Bernstein won an $8,242.07 award for Augustin Pineda, who was considerably underpaid during his 11 months work as a dishwasher and cleaner at Chiu Chow Restaurant in Chinatown. The employer appealed the decision and the case was settled out of court for $5,000. “You never know what will happen if you go to court,” Bernstein said.

Legal Aid has numerous court actions pending involving alleged minimum wage violations. Most of them are filed in Municipal Court because they involve less than $25,000. Some of the cases are bigger and are filed either in Superior Court or U.S. District Court.

Bernstein and Callaghan say they have had numerous victories on behalf of poor clients but are only making a small dent in what they called a growing problem. “If someone comes in with a compelling case, we can go down to the factory and check it out the next day,” Callaghan said. “But we’re the only ones with resources to do that.”

And some of the problems have no quick solution. One night recently at Las Familias’ office on the edge of the garment district, a Legal Aid lawyer and several law student assistants interviewed a number of workers with complaints about minimum wage violations. A Latino couple told Rosalie Murphy, a USC law student, that they were being paid $100 a week for 55 hours work at a garment factory.

The couple said they were in a quandary about what to do because they are not working here legally. They are eligible for assistance from the state labor commissioner because lack of a proper work permit is not a bar to remedying a violation of the minimum wage law. The couple expressed fear about losing their jobs if they get involved with a government agency.

And the couple, who allowed a reporter to hear their interview with Murphy on condition of not being identified, also were not sure they could get a better job if they quit.

“We could not in good faith advise these people to leave these horrible jobs because they don’t have money and it’s harder than it was before the new immigration law for them to get another job,” Murphy said.