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More wage-theft charges at Wal-Mart warehouse

A fourth lawsuit alleging wage theft at a Wal-Mart warehouse in Will County was filed in federal court November 18.

Workers hired by Eclipse Advantage to staff Wal-Mart’s warehouse in Ellwood, Illinois, charge they were paid less than minimum wage or shorted on their hours – and in some cases both.

“I worked 21 hours for Eclipse my first week and was paid $57 for it,” said Roberto Gutierrez.  “The company says I only worked 12 hours, by even by their logic I was still paid less than minimum wage.

Warehouse Workers for Justice led dozens of warehouse workers who demonstrated at the Wal-Mart warehouse Monday, demanding that payment records be released.

The suit is the fourth filed by WWJ on behalf of Wal-mart warehouse workers since 2009.  The other suits are pending.

“We’ve seen a spike” of wage theft complaints during the pre-holiday season peak this year, said Mark Meinster of WWJ.

In recent months, California state labor investigators have fined two Wal-Mart contractors over $1 million for violations there, he said.

The hazards of warehouse work

Warehouse and transportation workers have the second highest number of occupational deaths and the third highest rate of worker injuries, according to a new report cited by Kari Lydersen at Working In These Times. Read the rest of this entry »

Bad jobs and rip-offs

A Consumers Union report warns that prepaid bank cards are “loaded with fees” and short on consumer protections, the Sun Times reported last week.  Most cards surveyed charged fees for card activation, withdrawals, paper statements and even for checking balances.

The prepaid cards are similar to the payroll cards with which many Chicago area warehouse workers are  being paid, as Newstips reported in August.  Workers say they have to pay fees to access their money, and that it’s difficult or impossible to make sure they’ve been paid for all their hours without a paystub.

Warehouse Workers for Justice thinks the arrangement could violate laws requiring pay stubs, and is investigating the possibility that the fees charged to use the cards could amount to wage theft, said organizer Abraham Mwaura.

It’s just one of many ways that vulnerable workers can be exploited.  A special report from American Prospect highlights another issue faced by workers in warehouses and in many other industries – the misclassification of regular employees as temps or as independent contractors.

At a UPS warehouse, one worker tells Harold Myerson of working for ten different contractors over a period of five years – doing the same job the entire time.  She’s still a temp.

The Department of Labor is studying regulations to guard against misclassification, but the federal government could also use its power of procurement to require contractors to improve conditions, particularly in port trucking and ground express delivery, write David Bensman and Molly Greenberg.

The misclassification issue is playing out at FedEx, where the feds could use the leverage of $1.5 billion in contracts from the Department of Defense, Bensman and Greenberg write.

In May, Illinois FedEx drivers in a  multi-state class action lawsuit won a summary judgment on their claim to be company employees under state law (pdf).  The drivers own their own trucks but must paint them with the company logo and can’t use them for other business; they’re required to dress in FedEx uniforms “down to the color of their shoes and socks”; and they “make pickups and deliveries on routes assigned by the company,” Bensman and Greenberg point out.

“The court found that FedEx Ground misclassified its [Illinois] drivers as independent contractors as an illegal means to avoid paying state unemployment insurance and workers’ compensation insurance,” they report.

In July, FedEx announced a $3 million settlement with Massachusetts over claims that the company’s misclassification of drivers cost the state revenues from payroll taxes, unemployment insurance and workers comp.

The Government Accountability Office has estimated that misclassification of employees as independent contractors results in a loss of $2.72 billion a year in unpaid Social Security, unemployment, and income tax, according to a new report by the National Employment Law Project (pdf).

The problem is large and growing in Illinois, according to a 2006 study (pdf) by economists at the University of Missouri-KC cited by NELP, which found that 19.5 percent of employers in 2005 were found to have misclassified employees as independent contrators, with misclassification rates up 55 percent from 2001.

Such misclassification costs the state hundreds of millions of dollars, according to the study.  Income tax revenue lost due to misclassification could be as high as $248 million for 2005, and misclassification cost the state’s unemployment insurance system $53 million (in 2005) and the workers’ compensation program $97.9 million (in 2004).  The cost of workers comp is the single biggest reason employers misclassify, according to the report.

That doesn’t include the costs to the state and federal government of the use of permatemps, a massive and growing employment sector offering lousy jobs.  And it’s just a portion the cost to the regional and national economy of economic development strategies focused on low-wage jobs.

It would be difficult to apply new regulations or contract provisions to warehouse workers who work as temps for subcontractors, says Meyerson.  He calls for strict enforcement of wage and hour laws – and recalls the labor department’s 1990s anti-sweatshop effort, which held large retailers accountable for labor law violations by their contractors and subcontractors.

In the Chicago area, though, WWFJ is exploring the possibility of structuring development deals to limit the use of temporary labor in warehouse complexes built using state subsidies, as the region’s shipping industry continues to expand.

Why not use economic development subsidies to promote good jobs?

Poverty-level pay for warehouse work

The transportation and distribution of manufactured goods is a growing industry in the Chicago region, which is a major hub in the global shipping chain, but it won’t fulfill its potential as an engine of economic development unless a crisis in employment conditions for warehouse workers is addressed.

That’s the upshot of a new study which found that 63 percent of warehouse workers in Will County work as temporary employees for poverty-level wages.

Warehouse Workers For Justice and the Center for Urban Economic Development at UIC will release the study tomorrow (Monday, August 16) at an 11 a.m. press conference at Sacred Heart Parish, 329 S. Ottawa in Joliet.

The study found warehouse workers employed at the same warehouse for as long as 12 years without obtaining permanent employment or the benefits that come with it, including paid holidays, sick days, and vacations.

“The level of wages is shocking,” said Abraham Mwaura of WWFJ.  “We think it’s a crisis.”

WWFJ members and staff surveyed employees at about half the 300 warehouses in Will County, he said.

Major retail chains hire warehouse management companies which subcontract with temporary services, and now the temp services are starting to subcontract out payroll services.  That keeps labor costs low – and avoids liability for unemployment insurance, workers compensation, and wage law violations, Mwaura said.

About a third of respondents reported having been disciplined or fired after reporting an injury on the job, and another third said they hadn’t reported an injury out of fear of being fired, he said.

The emphasis on temporary employment makes it very difficult for unions to organize warehouse workers, he said.  At the Bissell Co. warehouse, when 80 percent of workers signed a union petition, the company simply got a new temporary agency, Mwaura said.

WWFJ member Tory Moore said he worked for six years as a temp at a Del Monte warehouse in Kankakee without ever getting permanent employment – or a paid holiday or sick time.  Over six years his pay went from $6.50 an hour to $10, he said.

“A lot of people there had to go on food stamps to make ends meet,” he said (though he didn’t, he says with some pride).

Not having a permanent position makes it hard to rent an apartment or obtain a loan, he said.  “You’ve got no foundation,” he said.  “You should have an opportunity to grow with the company.”

He objected when the payroll company began paying workers with debit cards.  The company charges users’ accounts every time they make a withdrawal, he said.

“If you want $20, you’ve got to give them $2 or $3,” he said.  “It’s supposed to be your money.

“A person should have a choice about how they want to get paid,” Moore said.  “I want to see my check stub, make sure I’m getting paid for the hours I worked, see what they’re deducting for.”  The company said he’d have to access his pay statement online – but he doesn’t have a computer.

“We know these can be good jobs,” said Mrauwa.  “We found people who have good, living wage jobs.”

But Moore said people making more than the average “are walking on eggshells,” knowing the company “is looking for reasons to fire them” and replace them with low-paid temps.

Mrauwa said he expects the study to bolster efforts to win legislative protections.  He points out that Arizona has banned the use of debit cards for payment of wages.

‘An Airport to Nowhere’

While skyrocketing oil prices and a growing airline industry crisis steadily overwhelm prospects for an airport in Peotone, local opponents of the megaproject are planning a community cleanup on Saturday to remove trash and debris from IDOT’s demolition of farmhouses in the proposed airport’s footprint.

“We’re cleaning up the toe jam in the footprint,” said Anthony Rayson of Shut This Airport Nightmare Down.

They’ll meet Saturday, June 14 at 10 a.m. at the corner of Egyptian Trail and Eagle Lake Road, opposite a farmhouse taken over by IDOT (now fenced in with barbed wire and under 24-hour guard).

Will Township is providing a pickup truck and dumpster and a STAND member is bringing a frontloader. “IDOT bulldozed the farmhouses and barns that they acquired and it left a lot of wood and debris,” said Rayson. “There was insulation blowing through the fields.” And people who think the area is abandoned have begun dumping garbage there, he said.

“Parts of the area look very blighted,” said George Ochsenfeld of STAND.

Local Cub Scouts have been invited to conduct a flag ceremony. “On Flag Day we’ll demonstrate what real citizens do — work together and help each other,” said Rayson. “Not destroy the community, like the government wants to do.”

Airport project ‘dead’

They’ll also take the opportunity to “raise the issue of this endless land grab and waste of taxpayer money,” Rayson said. “No Airport” signs are being constructed for distribution Saturday. Rayson calls it “an airport to nowhere.”

The Peotone airport “was already on life support” but the airline industry crisis “kills it entirely,” said Ochsenfeld. “It’s dead — though no elected official wants to admit it — but it will always be a ghost haunting property owners here. The threat of an airport depresses property values and stresses people out.”

The biggest obstacle to the project all along was total lack of support from airlines. A point-to-point airport as proposed has no place in a hub-and-spoke air travel system, Ochsenfeld said.

Political disputes over control of the airport authority erupted again this week when U.S. Rep. Jesse Jackson Jr. charged that political operator Antoin Rezko represented Governor Blagojevich in a meeting on proposed legislation in June 2006.

The state announced it was submitting a runway plan to the FAA in March, but certification could take years. If federal funds are involved, an environmental impact study will be required, including consideration of alternatives.

IDOT also initiated a new round of land acquisition in the 5,225 acre “starter airport” footprint. Almost 40 percent of that area has been acquired to date, according to reports.

The Peotone Airport was originally proposed to have six runways and cover 20,000 acres — over three times the size of O’Hare. A smaller “starter” effort was launched after the O’Hare expansion was approved. But it was only a $75 million appropriation for “land banking” in Gov. George Ryan’s Illinois FIRST program which got things rolling.

Driven by politics

“The project was always politically driven, not market driven,” said Ochsenfeld.

“It’s a pipe dream of south suburban politicians who are jealous of O’Hare and the Tollway and want their own money-making, job-dealing proposition,” said Rayson.

Millions of dollars already spent by the state on consultants and lawyers have made the project a “lucrative cottage industry” for political insiders, said Rayson. “Taxpayer money should be used for projects that benefit citizens – not to line the pockets of the politically connected,” he said.

Will County’s existing roads and bridges could certainly use the money, he said.

Read the rest of this entry »

Peotone Environmental Study Called Incomplete

The Federal Aviation Administration’s recent study of the environmental impact of the proposed Peotone airport is incomplete, according to a new analysis by the Openlands Project.

In reviewing possible alternatives to the Peotone project, the FAA failed to consider the proposed O’Hare expansion, which by itself could meet the region’s projected flight capacity needs through 2015, said Richard Acker of Openlands. The review also downplayed a combination of alternatives — including using existing capacity at Midway and Gary, improving airspace management and developing high-speed rail — which could allow the region to exceed demand by 35 percent in that period, Acker said.

In addition, the conclusions of the FAA study considered only the impact of land acquisition, not airport construction or operation and the sprawl that would accompany it.

According to Openlands, tens of billions of gallons of annual stormwater runoff from the new airport and related development would seriously degrade the water quality of the Kankakee River watershed, which the Illinois Department of Natural Resources calls “one of Illinois’ greatest natural resource treasures.”

A Peotone airport would pave 180 acres of wetlands, destroy 1200 acres of floodplain and pave 15,600 acres of prime farmland, with airport-related sprawl threatening hundreds of thousands of acres of farmland.

The Openlands report was supported by the villages of Peotone and Monee, the Will/South Cook County Soil and Water Conservation District, and the Will County Farm Bureau.

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