Few California workers win back pay in wage-theft cases

Noe Flores had been cooking pork belly buns and duck tacos for more than a month in 2011 at the popular Flying Pig food truck — often logging 12-hour days, six days a week.

When he asked why he hadn’t received his first paycheck on the new job, Flores said, owner Joe Kim offered an odd answer: This part of the job was an unpaid apprenticeship, lasting up to two months.

Flores and three other employees filed a claim seeking back pay with the state, which ordered Kim’s business to pay Flores more than $11,000. But nearly four years after he left the Flying Pig, he said, he’s received only a fraction of the total — and the payments have stopped.

Flores’ long struggle to recover lost wages points to a crucial shortcoming in the state’s efforts to protect low-wage employees, experts and worker advocates say. Even for workers who prevail against their employers in wage cases, few are able to collect what they are owed.

A 2013 UCLA Labor Center study found that workers in California collected only 42% of the back wages the state said they were owed from 2008 to 2011. Only 17% of workers who obtained a judgment against their employer saw any money at all during the three-year period, the report found.

The state’s own investigators had a similar collection rate of 20%, according to the most recent report from the California Labor Commissioner’s Bureau of Field Enforcement.

Part of the challenge is time: Wage claims can take years to resolve. In that time, workers can lose interest and companies can change names, making the collection process more complicated, according to labor lawyers.

As many as 60% of wage cases in California involve scenarios in which a business entity has switched ownership or changed names, said Matthew Sirolly, director of the Wage Justice Center, a Los Angeles nonprofit group that has been working with state agencies to target unpaid claims.

“The new corporation isn’t responsible for the old corporation’s debts,” Sirolly said. “So it’s like trying to collect from the Tooth Fairy.”

The poor results and delays can cause workers to lose heart.

A 2010 research survey of low-wage workers in Los Angeles County found that nearly 30% reported being paid below the minimum wage in the previous week. The poll sample represented more than 744,000 low-wage workers. But last year, only about 5,000 filed claims with the county’s branch of the state Labor Commissioner’s office.

“They know they’re not going to get anything,” said Tia Koonse, legal and policy research manager with the UCLA Downtown Labor Center. Rogue employers know the same thing — that they’ll probably never have to pay, she said.

In the Flying Pig case, 13 workers initially alleged they were underpaid. Only four decided to pursue a formal wage case, and just two of those four have received what they are owed, state documents show.

Flores, the cook, got a judgment for more than $11,000 early last year, but documents from his attorneys show the payments ended in July — totaling just $4,100. His case has been forwarded to the Wage Justice Center, which is working with the state on uncollected claims.

Flying Pig owner Joe Kim, who now runs an operation at the Figat7th food court in downtown Los Angeles, did not respond to calls seeking comment.

California Labor Commissioner Julie Su said the state has significantly improved its collection rate on back wages in recent years by improving the investigation process and cracking down on employers who retaliate after workers report problems.

In the past, Su said, the state often conducted random sweeps of businesses, which proved ineffective. Now investigators do surveillance and study data to better prepare for cases.

“When my deputies go in, they have as much information as possible,” Su said.

The agency has also worked to eliminate on-site interviews in which workers were questioned as their bosses watched.

In the 2000s, Su said 47% of investigations resulted in the finding of a violation; that number is now up to nearly 80%.

By partnering with the Wage Justice Center, the state is also exploring new legal approaches, such as suing businesses that fraudulently transfer assets to shell corporations to avoid legal judgments.

Advocates also have suggested the state explore the idea of a “wage lien” — a legal hold that would be attached to the business’ property. State law already gives workers in the construction industry the ability to place “mechanics liens” on ongoing construction projects if they aren’t paid.

Angel Tellez, a day laborer who worked for four weeks on a downtown hotel project in 2013, was initially paid only $200 by a subcontractor. The Wage Justice Center helped him file for a lien, and about a month later he said he had received $4,500.

Ultimately, experts said, no amount of government enforcement can ever keep up with the problem of unpaid wages. The real challenge, they said, is raising awareness among workers themselves.

Agencies can do only so many sting operations and investigations into employers, said UCLA’s Koonse. “Workers are going to have to do this on their own — to organize and get informed,” she said.

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