Labor unions’ objections delay California investigation into wage theft system

SACRAMENTO —  A surprise objection by labor unions helped delay a state investigation into California’s broken wage theft system, putting pressure on Gov. Gavin Newsom to fix a backlog of worker claims and other concerns that have only worsened with years of failed reform.

Sen. Steve Glazer (D-Orinda) called for the audit of the Labor Commissioner’s wage theft unit, citing privately released data that workers robbed of pay currently must wait an average 780 days to have their cases heard. By law those hearings are to be held in 120 days.

Glazer was supported by Assemblyman Jim Wood (D-Healdsburg), who said his staff have been trying to help a worker waiting five years for his case to be taken up.

Labor Commissioner Lilia Garcia-Brower on Wednesday told the Joint Legislative Audit Committee those backlogs are caused by chronic staffing shortages. She described an array of internal “pilot” programs to speed up cases, but acknowledged to lawmakers “there is a deep systemic problem ... within our agency.”

The audit committee approved the investigation but as a compromise to labor union opposition also voted to delay the inquiry until September.

The investigation had seemed assured until last week when California’s Labor Federation and 11 other powerful unions and union organizations announced objections to the plan, instead offering their own correctives.

The delay gives Newsom’s administration a narrow window to push changes through the legislative budgeting process, and a chance this fall to convince the audit committee an investigation is no longer needed.

Senate Labor Chairman Dave Cortese (D-San Jose) led the push to put the audit on hold, citing the need to not interrupt budget talks that might leverage information and changes by the administration.

“I suspect what’s gonna happen is, the audit’s gonna end up going forward anyway,” Cortese said in a Capitol hallway after the vote, “but in the attempt to avoid it, I think the psychology (for the governor’s administration) now becomes ‘We better hustle.’”

Lawmakers are acting without detailed information on what’s wrong within California’s wage claims process, created in 1976 to give workers an alternative to filing civil lawsuits against employers for unpaid wages. The agency is overseen by the Labor Commissioner’s Office, a division of the state’s Department of Industrial Relations.

The agency consistently has blamed staffing shortages for long delays in hearing cases, though repeated media investigations have also cited low wage collection rates even for those who do win judgments. In 2021, the agency said, it recovered more than $39 million on behalf of workers. However, it received claims that year for $334 million. A 2020 legislative audit noted that most workers are unable to collect their owed wages even when winning awards.

Garcia-Brower told lawmakers the agency last year received 38,000 wage claims, a dramatic increase over 18,600 the year before. She said she has hired 141 people over the last two years to increase staffing, but nearly half of those were new. Newsom’s current budget proposal seeks funding for an additional 42 workers.

She did not say how many employees left during the same time frame, what the agency’s current job vacancy rate is (it was 32% in May 2022), what worker caseloads look like, nor determine how many people are actually needed — all data Glazer sought with an audit. Glazer said he did not think such hard data would be forthcoming in the budget process.

“I’m not confident that anything would be different by just allocating more money, or even putting a standard of obligation on the money,” he said after the vote.

The backlog, as well as the labor department’s struggle to fill job vacancies in the wage theft unit, have long been the subject of legislative hearings and administrative promises of action. For five years running, the state has sought to reduce the backlog by hiring more wage unit workers, without success.

“Sometimes,” Glazer said, “the problem identified is not one the administration wants to own up to. ... It may not be as simple as more money and hiring more people.”

The California Labor Federation led a public campaign to block the audit.

“We don’t need to be diverted in the middle of all this. We’ve already done the work to find out what’s wrong,” said Lorena Gonzalez Fletcher, a former member of the state Assembly who is now chief officer of the federation.

“We literally have convened all of the experts, the attorneys, the worker centers, the unions, and come up with a whole host of enforcement tools that we need to enact,” she said.

The federation blitzed a two-page summary of its plans Friday to lawmakers. Its bullet list of suggestions includes a streamlined hiring process for wage theft investigators, relaxed hiring standards and increased pay. It also endorses legislation that would allow state penalties against companies that misclassify their workers as independent contractors to avoid paying required wages and other compensation.

State Auditor Grant Parks told lawmakers the requested investigation was straightforward and could be completed in six months.

But a public investigation would “impede” the Labor Federation’s proposals by consuming staff time, Gonzalez Fletcher asserted before the vote.

The federation represents some 1,200 local unions with workers in retail, manufacturing, construction, hospitality, healthcare and other industries. Its opposition letter to the wage theft audit was signed by 11 other unions and union organizations, including the Teamsters, United Food and Commercial Workers, and Worksafe.

The Labor Commissioner’s Office has a long alliance with unions, even relying on investigations by union-backed worker centers to bring large exploitation cases against targeted employers.

Garcia-Brower, appointed by Newsom in 2019, for nearly two decades built wage theft cases against janitorial companies as director of the Los Angeles-based Maintenance Cooperation Trust Fund, which is financed by unionized janitorial services.

The Department of Industrial Relations did not answer repeated questions from The Times since December about wait times for hearings or whether short staffing has caused long delays.

A Times expose of widespread exploitation of cannabis workers documented cases in which workers waited more than a year for an initial settlement conference, months more for a hearing, and even months more for a decision — all the while exposed to hostile employers.

State case files obtained by The Times showed there was no record of an agency answer to an advocate’s requests to speed up hearings for two brothers she said were threatened with death if they did not withdraw their cases against a state-licensed Yolo County cannabis farm.

In other cases there was no further investigation when workers alleged employers also waved guns at them or engaged in patterns of exploiting foreign workers.

Joe Jiorle is one of three workers who filed wage claims against a licensed cannabis farm in Humboldt County.

He filed his claim in March 2022 and as of this week, according to the labor agency’s online index, was still waiting for a hearing.

Case records show the labor agency told Jiorle it would be up to a year before he would be notified of a date that he might have a hearing on his claim for $70,000 in owed wages.

Jiorle said he knew dozens of workers, most of them immigrants, who worked at the farm without full wages and for whatever reason, did not file claims.

“I feel way more for the 32 laborers who I see out in the field six (to) seven days a week. Who’ve each been burned for maybe $10 or $15 grand and they’re [here] in another country just hoping to send some home and have a taste of American freedom,” he said.