Waiting in vain

Jose, who earned less than minimum wage and didn’t receive overtime compensation, filed a wage-theft claim at the Illinois Department of Labor. He’s been waiting for a year to recover owed wages, but he has so far received only one letter from the department confirming the receipt of his claim. Photo by Marc Monaghan.

Jose, who earned less than minimum wage and didn’t receive overtime compensation, filed a wage-theft claim at the Illinois Department of Labor. He’s been waiting for a year to recover owed wages, but he has so far received only one letter from the department confirming the receipt of his claim. Photo by Marc Monaghan.

Jose didn’t think his life could get any worse.

That was until he opened his eyes and realized he was lying in the middle of the street feeling a debilitating pain in his back, knee and left eye. He had been hit by a car as he biked his way back from delivering food.

“My God, why do I have such a bad luck?” he asked himself as the ambulance hauled him off to a hospital.

For six months before the accident, the 29-year-old Guatemalan had been working at Mello’s Carry Out restaurant, toiling inside the kitchen for 60 hours a week, earning $6 an hour. He occasionally delivered food, too. He knew the owner was breaking the law by not paying him $8.25 an hour, the state’s minimum wage, and overtime compensation, but he never brought it up because he was afraid of losing his job.

Besides, the owner had promised him a raise.

Jose returned to work the next day—with several bruises and pain in his back and knee—only to be told that his boss wouldn’t cover any medical bills.

“You don’t have papers or rights,” he allegedly told Jose, whose name has been changed to protect his identity. “I’m going to call immigration on you because you don’t deserve to be here.”

That was the last straw.

He called a workers’ compensation attorney for help and reported the owner to the Illinois Department of Labor for violating minimum wage and overtime laws, claiming the nonpayment of $11,652.

That was February 2011. So far, Jose has received only one letter from the department, dated July 28, 2011, noting that his case was under investigation. He has since resigned to thinking that nothing good will come out of his case. “I don’t think I’m ever going to see that money,” he said.

Jose is among an unfortunate few whose claims of wage theft at the Labor Department are stuck in a bureaucratic logjam. Even if the investigation into his case were to reach its conclusion, the odds against recouping the full amount of money the department determines he’s owed are steep, according to a Chicago Reporter analysis of “wage claim inquiry pages,” one of the few electronic records maintained by the department.

Of more than 5,700 cases of wage theft opened in 2010, an estimated 6.3 percent were still pending as of late 2011, the Reporter analysis shows. An average wage-theft claim took about seven months to be investigated and reach its resolution—successful or otherwise.

Among the cases completed and closed, the department found wage-law violations an estimated 59.5 percent of the
time, but only an estimated 28 percent of those cases led to verifiable full payments, while an additional 17.6 percent resulted in settlements and other resolutions or ended up in court.

The remainder—an estimated 54.4 percent—were closed and filed away after being labeled as “assumed paid,” even though the department’s “wage claim inquiry pages” show that only an estimated 10.4 percent of them have resulted in partial payment or alternate outcome.

Anjali Julka, the department’s communications manager, said not all activities that took place in some “assumed paid” cases are reflected in electronic records. “We realize that our computer system does not allow us to capture … all of the wages that are recovered in an easily retrievable manner,” she said.

Julka also explained that the “assumed paid” label can be applied not only to cases that lead to partial payment or settlement but also to any case in which a worker fails to respond to a “legal action questionnaire” that asks for consent and necessary information to file lawsuits.

Jose Oliva, a longtime Chicago labor organizer who is now the national policy director of the Restaurant Opportunities Centers United, said the department should be placing the onus on employers to prove they made restitution payment, rather than relying on workers to file more paperwork.

The department “doesn’t go far enough before closing the claim,” he said. “It is side-stepping the responsibility of the employer, and it doesn’t ensure that the worker is going to get the money he is owed.”

By deadline, the Labor Department had not provided the Reporter with paper files to determine how much of the analyzed “assumed paid” cases led to partial payment or settlement.

Kim Bobo, author of “Wage Theft in America” and executive director of the Chicago-based Interfaith Worker Justice, said the findings reflect workers’ perception and reinforces the notion that relying on government agencies to recover wages doesn’t work.

“A lot of folks don’t file [a wage complaint] because they see it as a waste of time,” Bobo said. “They see the process as terribly long where you may not even get the money.”

But Joe Costigan, the department’s director, said he believes most cases can soon be handled in an expedited manner, thanks to the amendments to the Illinois Wage Payment and Collection Act, which took effect in January 2011. “We’re in the process of implementing the new law,” he said. “We think the law will provide workers with plenty of mechanics and resources, and we are committed to making that work.”

*    *    *

In 2008, researchers from the University of Illinois at Chicago conducted a survey of 1,140 low-wage workers in an attempt to quantify how often employers in Cook County break labor laws. The study, “Unregulated Work in Chicago,” found that 47 percent of low-wage workers experienced wage theft at least once during the previous work week. Collectively, these workers lost more than $7.3 million per week as a result of labor law violations.

To Bobo, the grim statistics are no surprise.

Wage theft has increased in the past 30 years and has gotten significantly worse in the past couple of years, said Bobo, who explained that having fewer labor unions has played a major part. She also pointed out that the growth of the staffing industry has diminished the work relationship that once existed between workers and employers.

“If you were faithful to a company, that company was going to be faithful to you,” she said. “I think I have seen an entire erosion of contact between employers and workers, and if you no longer feel responsible for any of your workers’ health care and pension, then you probably don’t care about paying them fairly either.”

To recoup lost wages, a small number of workers rely on the court system. At the U.S. District Court in the Northern District of Illinois, for example, there were 304 lawsuits filed in 2010 claiming the violation of the federal Fair Labor Standards Act, the Reporter found. About 34 percent of those cases were class-action lawsuits.

Christopher Williams, former director of the Working Hands Legal Clinic, which represented low-wage workers in 75 lawsuits filed in 2011, said the small number of wage-theft cases is due in part to the fact that attorneys have little incentive to take these cases. Private attorneys “only go after cases where employers have a lot of assets or employers who will be able to pay,” he said.

Outside the court, many workers turn to nonprofit labor groups for help. Most of these groups use “direct action,” like sending a delegation to speak with the employer or staging protests, to recoup wages. The Chicago Community and Workers’ Rights, for example, helped recover almost $500,000 in 2011 alone.

Still, the official line of defense for workers is the Labor Department. But navigating the process can take a long time. First, a worker submits a wage-theft claim, either by going to the department’s downtown office or mailing in the form. An employer is then notified of the claim and has 15 days to respond. If the employer does not reply, the case gets assigned to one of the department’s four investigators and two additional staff members. If the employer contests the claim, the department begins the process of arranging a hearing.

In 2010, the department received 5,722 cases, and it completed and closed an estimated 89.3 percent of them, taking about seven months on average, the Reporter analysis shows. As of late 2011, an estimated 6.3 percent were still pending, and the outcome of the remaining 4.5 percent were unknown.

Of the closed cases, the department found an estimated 59.5 percent to have a valid claim of wage theft. As per its protocol, the department issued “demand letters” to employers, instructing the payment be mailed to the department, which in turn forwards it to workers. But such payments were made only in an estimated 28 percent of the valid cases, while 17.6 percent led to settlement and other resolutions or, when employers contested, ended up in court.

The department closed the rest of the valid cases—or 54.4 percent—by labeling them as “assumed paid.” In only 10.4 percent of these cases, the department’s “wage claim inquiry pages” show that the workers received a partial payment, or that the cases reached an alternate resolution. In one case, the department ordered Community Care Systems to pay $4,000, but a month later, the worker received a check for $195.55.

The “wage claim inquiry pages” do not account for specific outcomes of the other 89.6 percent of the “assumed paid” cases. Julka said this is due to the inadequate capacity of the department’s electronic filing system, but by using paper documents kept for each case, the department can “follow up on each and every claim to ensure that workers are paid wages they are owed.”

Julka explained that, besides payments and settlements, a worker’s failure to respond to a “legal action questionnaire,” could lead any case to be labeled “assumed paid.”

“The case [is] assumed to be resolved to the employees’ satisfaction,” she said, “only when employees fail to respond about whether they want to take a contested claim to hearing, fail to appear at a scheduled hearing or do not respond when asked to provide information necessary for legal action to be taken on the case.”

Alejandro Caffarelli, a labor attorney and former Illinois chapter president of the National Employment Lawyers Association, said he has long concluded that using the department to recover wages is of no use.

“We would never think of sending someone to the department of labor when it is so easy and effective to simply file the claim directly to court,” Caffarelli said. “Many employers know this and simply refuse to pay without any practical consequences.”

*    *    *

When Jose agreed to work at Mello’s, he didn’t think his weekly cash payment of $360 was enough. But he needed the money.
It had been a month since the 29-year-old lost his job at another restaurant, where his boss refused to pay him four weeks’ wages. After leaving that job, he walked up and down North Clark Street, going to each restaurant to ask for a job.

Once hired at Mello’s, he worked as a dish washer and later as an assistant cook. On several occasions, he delivered food. His hourly wage of $6 never changed—and his boss allegedly kept some of the tips he got while delivering food. The 10-hour shifts were hard, Jose said, but he earned enough to get by with his wife and son.

“I was hopeful when I came to this country,” Jose said. “I thought I was going to be able to pay off my debt and help my family.”

Jose decided to migrate north after Hurricane Stan hit Guatemala and destroyed his family’s crops in 2005. “We lost everything—our crops and our house. We were lucky to get out alive,” he said in Spanish. “My family got in debt, and [that’s why] I came here.”

He used the deeds to their land as collateral to borrow money to help pay off the person who smuggled him across the border. “It cost me $6,500, and I’m still paying” for the loan and interest, he said. “I never thought the situation would be so hard here. I still owe $2,500.”

His first job was doing construction work in Indianapolis and later he worked at a car wash. He then moved to Nebraska looking for work but didn’t have any luck there, so he moved to Tulsa, Okla., and worked at a factory until he got laid off during the recession. That’s when he decided to try his luck in Chicago. In time, he managed to save enough money to bring his wife and son to the city and live in a studio apartment with another couple.

But the accident changed all that.

“I went back to work the next day,” he said. “I was bruised and in pain. My back was hurting. My knee and my eye were still red from the impact. I kept working out of necessity.”

Then the medical bills began to arrive. At first, Jose didn’t know what to do. The owner refused to pay, and Jose didn’t have enough money.

But one day, he happened to watch a TV commercial about attorneys helping workers who get injured on the job. He dialed the number.

Once the owner found out about the attorney, he allegedly started threatening Jose. “He told me I didn’t have rights because I don’t have [immigration] papers,” he said. “He would yell at me and tell me that, if he lost the case, he could come looking for me here or back in Guatemala.”

After two months, he felt so threatened by his boss that he quit his job.

Buco Kalampiovic, the current owner of Mello’s, denied paying workers below minimum wage or not compensating them for overtime.

Kalampiovic, who bought the restaurant in July, said he pays all his workers $9 an hour.

“I don’t know where this is coming from. I’m the new owner,” he said.

Eventually, Jose’s attorney managed to get the restaurant’s insurance to cover the medical bills, but he has no idea about the fate of his wage claim at the Labor Department.

A few days after filing his claim, he tried to follow up by calling the department. He was told not to call—or the case would be delayed, he said. Then, in July, he received a letter confirming that the department was investigating his claim. At the end of the letter, it states: “Do not telephone with inquiries as to case status. Any delays are simply the result of the number of cases we handle each year.”

Still, late last year, he called once again, but this time, he was put on hold for 20 minutes. Frustrated, he hung up.

*    *    *

Labor organizers said they won a major legislative battle when amendments to the Illinois Wage Payment and Collection Act were passed in 2010.

The amendments allow the Labor Department to adjudicate cases involving $3,000 or less, rather than referring them to the Illinois Attorney General’s Office. It also makes it possible for workers to seek unpaid wages not only from companies but also from their individual owners—a change that helps recover lost wages in case a company files for bankruptcy.

Employers will also have to pay administrative fees of $250 if found liable of owing wages—a pot of money that’s set to go directly to the department’s enforcement efforts. And workers can recover legal fees in case they file a lawsuit in civil court. The amendment also increases the penalty for repeat offenders from a misdemeanor to a felony.

Williams, who helped draft the changes, said the Working Hands Legal Clinic, along with other organizations, sees this legislation as an important first step. But there is still more work to be done, especially improving the enforcement mechanism, he said. “I think we are going to see a year from now a stack of judgments and no money. The issue is going to be about how to collect” lost wages, he said.

Costigan said he’s open to more feedback. “The department is continually re-evaluating its enforcement processes to ensure that the department utilizes its resources as effectively as possible,” he said. “As always, we are eager for continued feedback and suggestions from the labor community.”

Labor organizers cited Costigan’s leadership as a reason to be optimistic about further improvements.

“There are reasons to be hopeful,” said Leone Jose Bicchieri, executive director for the Chicago Workers’ Collaborative. “First, Joe has worked for many years with one or more labor unions, and it makes sense that he is extremely sensitive for worker issues. Second, within weeks of taking office, the director met with us in person. Those are all signs for hope.”

Costigan was appointed to become the department’s new director in 2011 by Gov. Pat Quinn. Before his appointment, he served as the secretary-treasurer for Workers United, an affiliate of the Service Employees International Union. He had also served as the vice president of the Illinois State AFL-CIO.

Since he took office, Costigan has met with labor organizers and reached out to the consuls general of Mexico, El Salvador and Guatemala to provide information about protections workers have under state and federal labor laws.

“We are dedicated to the [department’s] mission … fighting for worker’s rights,” Costigan said. “But these are difficult times in the state’s budget, and conditions are such that we are looking at ways that we can improve our performance and do what’s right for workers.”

But the hope that many labor organizers share is nonexistent in Jose’s eyes.

“I feel like I’m never going to recover that money,” he said. “I haven’t heard back from the Department of Labor. I’m assuming that money doesn’t exist.”

Crystal Vance Guerra and Samuel Charles helped research this article.

Comments are closed.