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Car wash: wage theft as ‘industry standard’

A delegation of faith leaders will call on a local car wash to follow wage and hour laws – part of a national day of action Thursday aimed at highlighting how workers we interact with every day are victims of a “crime wave” of wage theft.

Workers at Superior Car Wash, 6147 N. Broadway, aren’t paid minimum wage or overtime, and don’t get days off required by state law, according to Arise Chicago, an interfaith workers rights organization.

A delegation of clergy and community supporters will join a former Superior worker in calling on owners to pay back wages owed and follow state labor law on Thursday, November 18 at 10:30 a.m.

Luis Perez has charged that Superior did not pay minimum wage or overtime for seven-day, 70-hour work weeks, said Adam Kader of Arise.  Perez is owed $5,000 for 14 weeks that he worked at Superior earlier this year, Kader said.  Other Superior workers have backed up Perez’s charges, but aren’t in a position to speak publicly, he said.

Kader said Superior’s owners declined to meet with Arise Chicago to discuss the dispute.

“Wage theft is seen as a marginal issue when in fact it’s a very mainstream practice,” Kader said.  He said it’s “almost an industry standard” in car washes and so common elsewhere that “all of us in our daily routine are served by workers who aren’t making minimum wage.”

“It’s not just day-labor in construction or the occasional bad restaurant” – whenever you go to a sandwich shop or a dry cleaner it’s possible to encounter workers paid less than the legal minimum wage – which, he points out, is far below what’s considered a living wage – or shorted in other ways.

It’s not just small businesses, either – last year Newstips reported on workers in a Wal-Mart warehouse outside Chicago who sued for wage law violations, and this month worker advocates in Minneapolis protested wage violations by cleaning companies working for Target and other big-box retailers, according to Interfaith Worker Justice.

A recent study by UIC estimated that wage theft – including below-minimum wage payments, no time-and-a-half for overtime, and being forced to work off the clock – cost low-wage workers in Cook County $7.3 million a week.

Thousands of workers and clergy backed by dozens of national organizations and will take part in actions in over 50 cities tomorrow, according to IWJ.  Delegations will also meet with members of Congress to discuss legislative proposals.

Arise and IWJ are backing three bills:

HR 6268, introduced by Rep. Phil Hare (D-IIlinois), which would authorize the Department of Labor to partner with community organizations to educate workers on their rights and employers on their responsibilities;

The Wage Theft Prevention Act (HR 3303/SB 3877) which would freeze the statute of limitations from the date an employer is informed of a wage law investigation (a GAO report last year found that the statute of limitations often ran out by the time investigations were completed);

The Fair Playing Field Act (HR 6128/SB 3786), which would close a tax loophole allowing employers to evade wage law and payroll taxes by misclassifying employees as independent contracts.  (In Illinois, FedEx drivers recently won certification of a class action lawsuit charging they were illegally misclassified as independent contractors, as Newstips noted in September; a 2006 study estimated that employee misclassification costs Illinois hundreds of millions or dollars in lost revenues.)

Feds enter local wage theft case

The U.S. Department of Labor will file a motion tomorrow in the bankrupcty case of a Streamwood plastic factory, charging that owners pocketed deductions for health insurance, the Chicago Workers Collaborative reports.

Labor department attorneys will move that the funds be considered an administrative cost – giving former employees of Duraco Products priority over other unsecured creditors in case money is recovered from company owners Michael and Kevin Lynch, said Leone Jose Bicchieri of CWC.

Following the hearing tomorrow morning, former Duraco workers and their attorneys will discuss the situation at the Federal Building, 219 S. Dearborn (Wednesday, August 11, 10:30 a.m.)

In February Newstips reported that Bankruptcy Court Judge Eugene R. Wedoff ordered Duraco into Chapter 7 bankruptcy, shutting down the lawn furniture manufacturer, when he learned the company had shown him false payroll reports in order to cover up wage theft.

In March former employees filed a class action lawsuit seeking hundreds of thousands of dollars in back wages which they allege were stolen over the past two years.  Last week attorneys from Working Hands Legal Clinic representing workers were arguing for a default judgment for the plaintiffs, Bicchieri said.

“We want to send a message that declaring bankruptcy is not a way out,” said Bicchieri, referring to perpetrators of wage theft. “If you try to escape into bankruptcy, we’re going to go after you.”

He said right now CWC is dealing with several cases similar to Duraco, where workers are getting paid only part of the time.  “In this economy it’s beginning to look like a new business model,”  he said.  At one worksite, “every week when they get paid, they run to the nearest bank and hope they’ll be able to cash their check.

“It’s such a bad economy, they say, ‘At least we’re getting paid some of the time – and what else are we going to do?'” Bicchieri said.

Wage theft law passes

The State Senate sent a tough new wage theft law to Governor Quinn last night in what the Just Pay For All Coalition is calling a “resounding victory for workers.”

Advocates said they expect Quinn to sign the bill, which closes gaps in the state’s enforcement system which allowed employers to short workers with little fear of consequences.  (See previous post for details.)  The Senate approved a version passed by the House last month.

Senator William Delgado (D-2) and State Representative Lisa Hernandez (D-24) were the sponsors.

“The bill will not only help workers keep their homes and pay their bills, but it will bring in millions of dollars of unreported income taxes at a time when our state in is fiscal crisis,” said Baldemar Lopez, legislative director for the coalition.

“We are seeing an increase in situations where workers are simply not getting paid for their work,” said Ana Guajardo, executive director of the Centro de Trabadojores Unidos in South Chicago.  A recent study by researchers at UIC estimated that wage theft costs Chicago area workers over $7 million a week.

Rally, hearing on wage theft law

One reason wage theft is so pervasive is that abusive employers are able to take advantage of an ineffective enforcement system, advocates say.  It was frustration by workers seeking to be paid for their work that led to the Just Pay For All Campaign, which is now pushing for SB 3568 in the General Assembly.  The bill would allow employees to pursue enforcement in civil court, relieving the burden on state labor regulators; create an administrative process for enforcement; and establish criminal penalties for repeat offenders.

Workers and advocates will rally at the Rotunda of the Capitol Building in Springfield tomorrow (Wednesday, April 14) at 1 p.m. and then attend a House labor committee hearing on the bill. SB 3568 passed the State Senate last month unanimously.  The Fair Pay For All Campaign is spearheaded by the Chicago Workers Collaborative, the Immigrant Workers Project of South Chicago, the Latino Union, and Working Hand Legal Clinic and endorsed by a number of community, faith, and labor organizations.

Study: Wage violations cost millions

Minimum wage and overtime violations are not confined to marginal employers but are “prevalent in key industries and occupations that are at the heart of Chicago’s regional economy,” according to a new study.

Nearly half of the low-wage workers surveyed reported pay-related violations in the previous week, averaging $50 out of weekly earnings of $322, according to “Unregulated Work in Chicago” from the Center for Urban Economic Development at UIC.

With over 310,000 low-wage workers in Cook County, that could amount to $7.3 million in lost wages due to employment law violations in the Chicago area — each week.

The study found that foreign born workers were 1.5 times more likely than those born  in the U.S. to face wage violations, and that among U.S.-born workers, African Americans were 27 times more likely than whites (and 3 times more likely than Latinos) to face workplace violations.

Over a quarter of workers surveyed reported being paid below minimum wage; two-thirds who worked overtime didn’t get the required time-and-a-half pay; and of those who worked outside their regular shift, 69 percent said they weren’t paid for it.

Three-fourths of childcare workers reported minimum wage violations.

Pervasive workplace violations keep working families in poverty, reduce consumer spending and tax revenues, and force responsible employers into unfair competition, threatening standards throughout the labor market, said researcher Nik Theodore.

He called for strengthening legal standards and stepped-up enforcement.

CUED and local worker advocacy centers will discuss rising workplace violations and initiatives to address them – including “high-road” economic development campaigns – at a conference tomorrow, Thursday, April 8, 1 to 4 p.m. at UIC Student Center, 750 S. Halsted.

It comes as a growing movement to fight wage theft charts new victories.  Last week U.S. Labor Secretary Hilda Solis was in town to announce stepped up enforcement after eight years of neglect.  And last month the Illinois State Senate voted unanimously for SB 3568, a bill that would increase employees’ recourses against wage theft and establish criminal penalties for repeat offenders.

The movement grew out of a multitude of workers centers established in the past decade to organize and empower low-wage and immigrant workers.  A number of them were represented at the study release today, and will be at tomorrow’s conference – and will join the Just Pay For All Coalition in Springfield on April 14 to lobby for passage of SB 3568 by the House.

They include:

Arise Chicago, part of a national network of workers centers of Interfaith Worker Justice, works with immigrant workers including Latinos and Poles including workers in factories, construction and maintenance.  The group recently mapped law-breaking by employers in 43 of Chicago’s 50 wards.  (IWJ’s Kim Bobo is author of the authoritative book on the subject, Wage Theft.)

Centro de Trabajadores Unidos – Immigrant Workers Center of South Chicago – which recently won a campaign to get a major local merchant to clean up his act and sign an employer’s code of conduct.

Chicago Workers Collaborative reaches workers through workers rights trainings at churches and commuity centers, has worked with street vendors, day laborers and fast food workers, and is also organizing temporary workers in the northwest suburbs (including at Duraco, who they charge workers are owed hundreds of thousands of dollars in unpaid wages).

Korean American Resource and Cultural Center has a workplace justice campaign to educate Korean American workers and small business owners and promote solidarity among Korean, Latino, and African American workers.

Latino Union works with day laborers at temporary agencies and on street corners on the Southwest and Northwest Sides, with a workers center in Albany Park which facilitates fair hiring practices for construction day laborers.

Restaurant Opportunities Center – Chicago (CHI-ROC) works with front- and back-of-the-house staff of restaurants, organizing against wage theft and providing training and job placement; chapters in other cities have opened their own restaurants.  The group released a survey of the restaurant industry in Chicago; a majority of workers surveyed reported workplace violations, as In These Times reported

Feds to launch wage theft drive here

U.S. Secretary of Labor Hilda Solis will visit Hull House tomorrow to launch a new campaign – developed in consultation with workers and advocates in Chicago — to promote public awareness on wage theft.

The labor department’s “We Can Help” campaign will be launched by Solis at a program starting at 11 a.m. tomorrow (Thursday, April 1) at Hull House, 750 S. Halsted.  Workers and advocates from Interfaith Workers Justice and its workers center here, Arise Chicago, are participating.

This winter IWJ set up meetings with workers in four cities to review the labor department’s plans for the campaign, including a meeting with ten Chicago workers in January.

It was following IWJ’s National Day of Action on wage theft last November 19 that Solis announced she was tripling the staff of the department’s wage and hours division and planning the campaign.

Leaders from Arise Chicago were “encouraged but wary,” according to a statement from the group.  Noting the department’s failure to consistently follow through on wage theft complaints in the past, Jorge Garcia called for a follow-up meeting later this year to discuss results from the new efforts.

On Friday, April 2, Arise Chicago will march in the 30th annual Good Friday Walk for Justice held by the 8th Day Center, starting at 12 noon at Michigan and Congress.

South Chicago workers win code of conduct

A leading South Chicago merchant will sign an employer’s code of conduct as part of a settlement in a wage dispute tomorrow.

Centro de Trabajadores Unidos (Immigrant Workers Project of South Chicago) is announcing the agreement by Antonio Macias, owner of three neighborhood food markets, at a press conference tomorrow (Tuesday, March 16, 1 p.m.) in front of the mural at 91st and S. Commercial.

Workers at Macias’s La Fruteria sued for violations of minimum wage and overtime laws last year, working with CTU and represented by the Working Hands Legal Clinic. They recovered their wages, and as part of the settlement Macias agreed to sign a code of conduct pledging to abide by labor laws and respect workers, said Ana Guajardo of CTU.

Noting that Macias “has a lot of influence in the community,” Guajardo said CTU hopes the agreement “sends a message to other business that they need to follow state and federal laws and respect workers.”

Fighting wage theft has been a major focus of CTU, she said.  Some cases are settled in response to community pressure, and sometimes claims are filed with the labor department or in small claims court, she said.

“Part of it is education,”Guajardo said. “Many workers don’t understand their rights.”  CTU conducts workshops and speaks in area churches.  It was in a presentation at a church that employees of La Fruteria first made contact with the group, she said.

Earlier this year 28 workers supported by CTU filed a lawsuit against a construction contractor seeking nearly $100,000 in unpaid wages,she  said.

A stronger law against wage theft

Wage theft is growing dramatically (as recent Newstips have indicated) — some advocates describe it as an emerging business model in an economy increasingly dependent on contingent labor — but weaknesses in Illinois law allow many employers to get away with it.

On Monday, state legislators and labor and community groups will announce legislation to increase penalties for employers who steal wages and remove obstacles to enforcement of wage law in Illinois.

State Sen. William Delgado (D-2) and State Rep. Lisa Hernandez (D-24) will be joined by workers who have experienced and fought wage theft and their supporters in the Just Pay For All Campaign at a press conference (Monday, March 8, 1:30 p.m., outside the Thompson Center, 100 W. Randolph) to announce the introduction of SB 3568.

The bill would amend the Illinois Wage Payment and Collection Act to establish an administrative hearing procedure under the Illinois Department of Labor for wage theft claims below $3,000, and would allow employees to recover legal costs if they file successfully for unpaid wages in civil court.

Smaller wage claims often fall through the cracks of the existing system, said Chris Williams of the Working Hands Legal Clinic, which handles many such cases.   He said that of 10,000 wage claims filed with the Illinois Department of Labor last year, 75 percent were for amounts under $3,000, and half were under $1,500.

Currently the labor department can investigate wage theft claims and make determinations but has no enforcement power; that requires a separate, potentially costly court action by the attorney general’s office.  And private attorneys must rely on contingency fees, which don’t cover costs in smaller cases.

(Working Hands takes wage theft cases as part of its mission as a nonprofit legal clinic supporting workers centers which organize low-wage and contingent workers, Williams said.)

The bill would also bring the state’s wage payment law into line with other labor law which allows workers to sue individual owners, in addition to companies, in order to recover wages.  In part this removes barriers to enforcement established by the Illinois Supreme Court in a 2005 decision (Andrews v. Kowa Printing), which required employees to prove “knowing violations” by owners.

“This would be a big advantage when a company goes into bankruptcy,” said Williams, citing the Duraco case (recently reported here) in which “two brothers who are robbing the people who worked for the company are hiding behind [bankruptcy] reorganization.”  Working Hands recently filed suit on behalf of former Duraco workers, claiming hundreds of thousands of dollars of unpaid wages.

The bill would also increase penalties and fines, including criminal penalties for repeat offenders, and establish a Wage Theft Enforcement Fund paid for by fines and fees.  It would add a penalty of 2 percent a month when back wages are paid, to “eliminate forced interest-free loans” from workers to employers, Williams said.

The bill was initiated by the Working Hands Legal Clinic along with others in the Just Pay For All Campaign, including the Chicago Workers Collaborative, Immigrant Workers Project of South Chicago, and the Latino Union of Chicago.  Several labor and immigrant groups are endorsing the bill.

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