L.A. lawmakers consider creating a unit to crack down on wage theft

As Los Angeles lawmakers considers hiking the citywide minimum wage to $13.25 or $15.25, they are pushing to create a new city office that could crack down on employers who break those wage rules.

“Stealing wages from working men and women is just wrong. It’s disgraceful. And the end begins today,” Councilman Gil Cedillo said at a Tuesday meeting.

Labor groups have argued that a local office would give the city more muscular ways to enforce rules against shorting employees, which they say is especially important as L.A. weighs a higher wage.

Though the state of California has its own mechanisms to punish wage theft -- which can include paying less than minimum wage and denying workers their required breaks -- experts and labor activists say few workers are actually able to collect what they are owed, even if they prevail in their cases.

“Wage judgments definitely don’t enforce themselves,” said Jay Shin, an attorney with the nonprofit Wage Justice Center.

City officials say the new office would be able to impose fines and liens, revoke city permits and take other action to enforce the city wage rules. In a report, Chief Legislative Analyst Sharon Tso estimated it would cost $500,000 starting next budget year -- enough to pay for five investigators or analysts.

That’s a fraction of the number suggested by a UC Berkeley study on the minimum wage proposal, which estimated Los Angeles would need 25 investigators to enforce any new citywide wage rules.

City Councilwoman Nury Martinez questioned whether five employees would be enough to help people or merely create “the illusion” that the city was doing something. Councilman Paul Koretz raised similar worries about the size of the office.

“We need probably at least double the amount of staff,” Koretz said. He suggested that heavy fines on businesses that flout the rules could help pay for the added costs of a bigger office.

In reaction, city officials said they had recommended a “phased approach” for staffing the office because it would need to establish its operations and procedures in its first year. They suggested that law students and public interest groups could assist its efforts as it launched the new office.

The plan was cheered by labor advocates, who argued that the city should also consider other funding sources to expand the new office, possibly including enforcement fees levied on businesses across the city. But some business groups raised concerns about that idea.

“We cannot penalize good actors to try and enforce against bad actors,” said Ruben Gonzalez, senior vice president of the Los Angeles Area Chamber of Commerce.

A council committee focused on economic development took a step toward making the plan a reality Tuesday, asking City Atty. Mike Feuer to start drafting an ordinance to establish the new office. The office would include five employees and could possibly expand to 10 if the council decides to do so, according to the proposal made by Cedillo.

But the plan must undergo more vetting by city lawmakers, including a committee dedicated to the budget, before it becomes final.

The Bureau of Contract Administration, which is part of the Department of Public Works, would house the new office and is supposed to report back on implementing the plan next month.

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