Chicago Creates New Office of Labor Standards to Combat Wage Theft

Pay in restaurants isn’t usually high to begin with, but line prep cook Juan Sandoval says he rarely even gets the full pay he’s due.

Sandoval, who has worked in the Chicago restaurant scene for six years, told Truthout that his employers frequently fail to pay him time-and-a-half for working overtime hours above 40 hours a week. Right now, he said, he’s working 12 hours a day, yet he’s only getting paid $900 a week — what he’s owed for each regular hour, but minus the extra $400 he should get for overtime.

That missing $400 creates hardship not just for him and his two children, ages 17 and 19, but also for the siblings he often supports financially. “It leaves you with less money and also leaves you less time,” he said, speaking in Spanish through a translator. “So, it’s less money for your family and less time for your family.”

If he got paid correctly for his extra hours, he could cut his schedule down a bit more and go to culinary school. He could spend more time with his children. “When I don’t spend time [with them] it runs the risk of them being influenced by other people, me not being able to be as much of a role model,” he said.

But he hasn’t reported his mistreatment to anyone. “I wasn’t really sure where to go,” he said.

That’s why he got involved in a campaign to create a labor rights agency to closely regulate workplaces like his. “After many years of experiencing this kind of mistreatment, discrimination and rejection, I decided that it was really enough,” he said. “I felt an urge to really do something.”

His decision to speak out just paid off. On Wednesday, October 31, Chicago took a big step forward toward protecting city residents’ workplace rights: The city council approved the creation of a brand-new Office of Labor Standards charged with enforcing all of the city’s employment laws.

There are already enforcement agencies — the state department of labor, as well as the city’s Department of Consumer and Business Affairs — but this one will go further. For one thing, the state department of labor has less than 10 investigators for the entire state of Illinois and its more than 6 million-person workforce. The new Chicago office, by contrast, will start out with five staff members, and advocates hope it will only expand from there as more cases come in. The office will also have subpoena power with the ability to audit an entire company accused of mistreatment. And because every Chicago business needs a license to operate, the office will have power over all of them to deny, revoke or suspend licenses when it uncovers misbehavior.

“That’s a real lever,” noted Adam Kader, worker center director at Arise Chicago, a workers’ rights organization that generated the idea for the new office in the first place, adding that it’s a lever that the state doesn’t have.

The Office of Labor Standards will also have more tools at its disposal. As of December 2017, the Department of Business Affairs and Consumer Protection had only investigated about a quarter of the 550 minimum wage complaints it had received. It is simply outmatched by the scale of the problem. “We knew we couldn’t expect an agency to be tasked with additional enforcement and given no additional resources,” Kader said. The new Office of Labor Standards will be in charge of making sure workers actually get these benefits and any others implemented in the future.

“Enforcement … is very limited if it’s only complaint-driven,” Kader said. The workers most vulnerable to abuse are also often the ones least likely to report what they’ve experienced. One way the new office will combat this problem is by having the authority to investigate mistreatment that shows up in the news or is reported by community groups like Arise. It will also have the power to expand a single, individual complaint into a company-wide investigation.

That’s meaningful for Sandoval. “I will turn in a complaint now, knowing that there’s an office in place,” he said, adding that the office will make him “feel safer and also more confident to report abuses against bad employers.” He’s particularly excited about the power the office will have to expand an investigation into an individual’s complaint to the entire workplace. “It allows people to say ‘Yes, me too, me too,’ and as a group there will be more power.”

Similar agencies already exist in New York City, San Francisco and Seattle, which have also passed enhanced rights for workers, including paid sick leave. In New York, the Office of Labor Policy & Standards waged an 18-month education campaign to make sure city workers were aware of the new benefit and then went out and enforced that right with the power to investigate complaints, including subpoena power and the ability to impose civil penalties. It’s focused on low-wage workplaces, such as car washes, restaurants and retail stores. Meanwhile, Seattle created its agency after passing a $15 minimum wage increase, and it now engages in directed investigations that proactively monitor industries to see if they are violating workers’ rights before receiving any complaints.

Arise Chicago learned from what they’ve accomplished. “We took inspiration from those three cities,” Kader said. His organization traveled to Seattle to meet with advocates there and met with people from New York in Chicago.

He now hopes that other cities will take inspiration from what was just accomplished in his city. “Solidifying dedicated staff and resources for local enforcement is going to be a game changer,” Kader said. “I hope it signals to other cities that this is a viable way to protect workers and residents.” It may not be feasible in every city to do exactly what Chicago just did. But in the places where it is possible, “we want to be a resource in the same way San Francisco, Seattle and New York were for us,” he said.

“The end goal is not just taking care of our workers in our city,” Kader added. “We want to see this as part of a broad movement of local power for workers.”

The creation of Chicago’s office follows the passage of a series of worker-driven laws improving pay and benefits for its low-wage employees. In 2013, the city passed an ordinance to combat wage theft, which means that a business owner who steals employee wages could have his license revoked, making Chicago the largest city at the time to have such a policy; in 2014 it passed a minimum wage increase that put the wage floor at $12 an hour this year and will rise to $13 next year; and in 2016, it passed an ordinance requiring workers be able to earn up to five sick days a year. Arise Chicago was heavily involved in campaigning for the wage theft and paid sick leave laws.

But having rights on paper doesn’t always mean that employers follow the new rules. “The new protections are critical to improving local working conditions and decreasing poverty, but are useless if not enforced,” Arise Chicago said in a press release. Even as the organization was pushing for these laws, “the mantra of Arise Chicago was, ‘Enforcement, enforcement, enforcement,’” Kader said.

The effort to create the new office came from the grassroots, driven by demand from workers themselves, who led a two-year campaign for it. “The community has had a hand in shaping the structure of this agency at the ground level,” Kader said. The organization met with more than 30 Chicago city council members, including members who lived or worked in their wards. “We were tenacious about securing those meetings,” Kader said. “It was the first time we’ve ever really done that extensive work with elected officials.” They got lawmakers to agree to the concept of an agency early on, and then worked with the city council, a group of attorneys from across the country and workers to develop the language of the bill creating the new office.

“We do feel the eyes of other cities on us and we wanted to make sure that we kept the bar high so that subsequent efforts could also be high,” Kader said. “We wanted to make sure it was as strong as possible.”

The new office will also be ready should new rights and benefits pass. Fair scheduling is already on the horizon in Chicago, and advocates might even contemplate trying to pass local paid family leave in the next few years. “Passing laws like that would be unthinkable if we don’t have a solid enforcement agency in place,” Kader said. “We wanted to pass this Office of Labor Standards and have it in place so that subsequent laws could … be properly enforced.”

The Office of Labor Standards will also give workers a closer connection to the local government that represents them. “To see the government serving them, being able to count on the government, is so meaningful,” he said. “Being able to affirm the role of government [in] legitimizing workers’ claims is definitely meaningful. It’s profound.”