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City to Businesses: Pay Your Workers...or Else

Supes crack down on rampant "wage theft" in SF restaurants

wage theft main imageSan Francisco's Board of Supervisors on Tuesday unanimously approved a new law designed to crack down on businesses that illegally fail to pay their employees' wages.

Advocates say the problem, known as "wage theft," is rampant in the city's restaurant sector. A survey last year found 50 percent of workers in Chinatown eateries reporting being paid less than San Francisco's minimum wage of $9.92 an hour, while 76 percent said they were not paid overtime and 42 percent said they saw their pay illegally docked when they were sick.

In remarks to supporters before the board meeting, Supervisor Eric Mar called the new legislation "groundbreaking" — comparing it to the city's first-in-the nation universal health care and paid sick-leave laws.

The measure, which Mar co-authored with Supervisor David Campos, allows city investigators to to make unscheduled inspections of worksites and to cite employers immediately for violations. It also requires delinquent employers to post a notice to the public after being cited for violating wage and hour laws. Currently, the city has to give employers at least 10 days to correct a problem before issuing a citation.

San Francisco is already the only city in the country with a special office dedicated to enforcing labor laws. According to San Francisco's Office of Labor Standards, the city has recovered $4.36 million in stolen wages for 2,692 workers citywide since 2004. Last month, City Attorney Dennis Herrera sued the owners of Dick Lee Pastry, Inc. in Chinatown for allegedly failing to pay more than $440,000 in wages plus interest to seven employees.

But advocates say the city's existing labor enforcement efforts only punish a small portion of violators.

Josue Argulles, an organizer with Young Workers United, a labor group that backed the new law, said it was needed to put pressure on employers, "like the pressure we feel to pay when we get a parking ticket." Business owners need "to feel that if they don't pay their workers, the city is going to crack down," he said.

In an interview, Rob Black, executive director of the Golden Gate Restaurant Association, said businesses are in support of the new rules.

"Employers that cheat on wages not only hurt their employees, but the business community as a whole," he said.

Not all restaurant owners are excited.

Atique Rehman, the owner of Naan 'n' Curry, a Pakstani restaurant chain with a location in the low-income Tenderloin neighborhood, accused his employees of "really manipulating the system" and filing false claims against him.

Earlier this year, Young Workers United helped one of Rehman's dishwashers, Edwin Hernandez, file a petition with the city's Office of Labor Standards claiming he had not been paid for sick leave and rest and meal breaks. A month ago, city officials agreed and awarded Hernandez $6,000 in lost wages.

Since then, Rehman said he's started fingerprinting his employees every time they come in to work and leave, and taking pictures and video of his workers while they are on break — actions he believes will ward off further claims. He said he was also considering limiting employees' shifts to five hours a day so that they won't be entitled to take any breaks.

Rehman claims it is the workers who are taking advantage of their bosses.

"The Spanish employees are doing that with all the businesses around the neighborhood," he said.

Young Workers United has launched a "Guide to Guilt Free Eating in San Francisco," listing businesses that pay their workers well and offer possibilities for advancement.

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