because it is the first time, we hope that this is not the last time, and we hope this is the beginning of the city showing leadership on addressing the issue of wage theft and bringing multiple city agencies together to put our heads together and put our resources together to address the bad actors driving down standards for workers and responsible businesses. second, there are loopholes right now in the process and in the law and in the hearing process. i will not go into details, but basically, if you are a bad actor in san francisco, you can look through the lock and drag the process out and make workers wait before they can get their wages. that is not right, and the city can take immediate steps to change the. olsc does not have the resources they need. the city is not putting in the resources they need to fight the problem. the city attorney's office does not have a dedicated wage theft

unit to address these cases. over all, they operate on a pretty small budget, and trying to enforce said and labor laws in the city for thousands of workers -- that is a big task. we know that budget is an issue right now. we're not coming here today saying that we want to see the funding doubled tomorrow, but maybe next year, right? when the economy has improved. when businesses are paying their proper taxes and workers are getting paid and can spend money and help the economy rebuild, the city will have more resources. that is it. thank you. [applause] supervisor campos: thank you so much. next, i would like to sort of provide a contact -- i think it is important for now to understand how it is that the office of labor standards and enforcement is addressing the issue of wage theft. again, this is look at -- from my perspective, the key is we know that we are a model in many respects.

we know that there are a lot of good things that are happening. so how do we do things even better? how do we provide even more protection to workers? with that, let me ask the director of olsc. let's begin with donna let it. >> thank you, and good afternoon. i would like to give you a brief history of the office of labor standards enforcement and what we do and focus on our procedures to enforce the minimum wage ordinance, our accomplishments, and our challenges. it was created 10 years ago to enforce one labor law in san francisco, and that was prevailing wages on the city's construction contracts. we now in force, as was said, seven labor laws, including the

country's most progressive labor laws, including our own minimum wage ordinance. we are one of three cities in the country with its own minimum wage. we are the only city in the country with its own paid sick leave requirement -- with a paid sick leave requirement, and we are the only city in the country that requires employers to provide health care for their employees. we now have -- we have gone through an incredible time of growth. we have a multilingual and multi-cultural staff of 16 passionate and dedicated folks who work every day to come back wage theft in its many forms -- combat wage theft in its many forms. supervisor campos: this 6 for the entire city? >> correct. since the enactment of those

ordinances, we have addressed about 500 minimum wage claims and 300 paid sick leave claims. the last time the ordinance was strengthened, the amendments were championed by supervisor maxwell. i remember that she said that the olse is counted on to be the union for those unrepresented low-wage workers in this city. we take that responsibility very seriously. just this week, we were able to get immediate reinstatement for workers who were fired by their employers for asserting in two cases their right to paid sick leave and in one case, their right to the minimum wage required for employers at the airport. we can point to some of the most

egregious cases that we have handled of wage theft. one that comes to mind was a contractor who had been doing city construction contracts for 20 years. our office was able to determine by working closely with their employees that workers were being forced to sign the backs of checks that were submitted to the city as proof that the employer had paid prevailing wage when in fact the workers had never received those checks. there was a whole second set of checks that the workers were getting for less than half of the required prevailing wage rate. i can tell you about a case in a restaurant in san francisco that involved egregious minimum-wage violations. the employer gave the employees after they had filed complaints with the office of labor standards enforcement stacks of cash money along with an airplane ticket to go back to

their home countries with a promise of another $2,000 in cash at the airport. our investigator went to the airport and recorded the transaction where they were given the additional money, and we stayed in touch with those workers when they went back to -- in this case, it was mexico. and were able to recover their full amount of back wages that was owed. but what i think we are here today to address is the more widespread and every day wage death cases -- wage theft cases that workers testified so compellingly about earlier. we have an underground economy that is awash in cash pay. employees who are paid set daily amounts or monthly salaries working 610-hour days or longer the work out to be much less

than the minimum wage with no overtime or overtime paid in cash at the straight time rate, for unpaid training periods, for employees who do not receive their tips, for times when the register's come up short and employees have to pay for it, and for workers who are denied meal and rest breaks. i would like to focus my remarks on the enforcement of the minimum wage ordinance because i think that is the focus of our investigation today. it was passed by the voters in november 2003. at that time, -- as with a lot of our labor laws, very little thought was given by the policy makers about how the ordinance was going to be enforced, let alone what funding was available for the enforcement. we met with legal and community advocates, and we observed the

process of the state division of labor standards and process for wage claims, and i know the legislative analyst is going to talk about their reports, which were focused a lot on comparing the dlse's process at the state with the olse's process. the dlse adjudicates wage disputes. a worker can fill out a claim form. within three or four weeks, they will be called in and have to sit face-to-face with their employer in front of a deputy labor commissioner, and the deputy labor commissioner will ask them to present their case. they are often unrepresented, and they can settle for much less than what is actually -- what they are actually owed under the law. if the case is not settled, a hearing is conducted anywhere

from four to six months. the worker is still unrepresented and can still decide to settle for less than what they are owed. either party can then appeal in court, and the case is totally retried in court. the san francisco minimal wage ordinance is significantly different than state law in two areas. one, it directs us to provide for the confidentiality of the claimant, and it provides for the liability of individual orders, and we are able to pierce the corporate veil. the olse chose to create a new enforcement model. we investigate. we thought it payroll records. we correct employer behavior. we prosecute cases. we reach settlements, and we oversee the disbursement of back wages, interest, and penalties. olse procedure is we meet with claimants. we often need to reassure them

of the confidentiality of their claim, that we will enforce the law regardless of the claimant's immigration status, and we work hard through the process to earn and maintain their trust. unlike the state, we will take a case against a business that has close, and we will work to identify individual owners to hold accountable for back wages owed. we conduct a site visit within a few days and not on the same day of receiving acclaim. we will go on daytime, nighttime, weakens, whenever most employees will be present, to interview the owner, the manager, other employees, to try to find other employees who are similarly situated, and to physically see how the business is tracking the hours that are worked. we request tabled documents and time records for all employees going back three years -- we request to table documents. that is a significant difference than the state where one worker files a wage claim, if they are

lucky, they will recover back wages for themselves only. we will issue citations if the employer does not maintain or provide access to records. we will issue subpoenas for documents if needed. we work with the employer to correct the business practices, to get a time clock, to pay hourly for all hours worked. we will send surveys to current and former employees. we will conduct surveillance of needed as part of a fair and thorough investigation. we audit for back wages do. we issue a determination of back wages, interest, and penalties. we meet with the employer to resolve the back pay, and we will not compromise wages owed. the payment plan is needed, we will develop a settlement agreement, and ensure timely payments to the employees and the city. we are able to settle 97% of our

cases in this way, but if we cannot, we take a case to a hearing, and we defend the audit and represent the employees before an independent hearing officer, and the employer who thinks they are off the hook because their employees left the country can think again. the hearing officer has allowed the olse to skype in testimony for claimants located outside the city or the country. supervisor mar: thank you for the great presentation. i did want to say that from testimony from many workers, they say that when the employer drags advocates and ignores the notices, that there is not that much follow-up from olse. can i ask you to repeat again what extra efforts olse makes when an employer is clearly dragging it out and ignoring the notices or communication from your office? >> when an employer refuses to provide us with payroll records,

we issue at this point first a notice of violation, giving them a deadline -- reiterating a deadline and giving them a new deadline of 10 days to provide the documents that they failed to provide. if they have not provided them within 10 days, we issue a citation. sometimes we issue more than one. if they continue to fail to provide documents. sometimes, they are not going to provide documents because it is totally cash pay, there are no time records, or they are not going to fess up to having time records. at that point, when we make that determination, we interviewed the claimants carefully and present their case as our documentation to a hearing officer. after a hearing officer issues a decision, the olse issues a

final determination and uses every means possible to get the employer to pay. in sum, we make employees hold. we punish the employer, and we correct their business practice going forward. we have recovered back wages in 317 cases. those cases have involved 425 claimants, but we have received -- recovered back wages for 2601 employees, totaling $4,000,215. it is important to note that a critical part of our process involves correcting the employer behavior, and it is impossible to calculate the number of employees who are now being paid minimum wage for every hour worked as a result of olse enforcement actions. an interesting statistic is that 45% of our cases involve

restaurants. 63% are for restaurant workers. 17% of our cases involve retail sales, and 14% of the wages collected are for retail sales workers. regardless of the industry, though, the vast majority of workers cheated out of minimum- wage are our most vulnerable immigrant workers. but the olse, as you said, cannot do this alone. we have established a strategic collaborations with other city agencies. we work closely with the city attorney's office when legal interpretations are needed, when we are faced with opposing counsel, or in the hearing process. we are the only government agency that i know of that contracts and funds a collaborative of community-based organizations. our contract is with the chinese progressive

association, the filipino community center, and pride at work. the community collaborative does outreach and education, and each agency is responsible for a certain number of referrals of claimants to the olse. we partner with the department of public health, where we use their abatement hearing process to request permit revocation of violators who have not made their employees hole after either signing a settlement agreement or getting a hearing officer decision. we partner with the treasurer and tax collector's office where we can refer unpaid debts to the city to their collections department. we have partnered with the small business assistance center, who helps us hammer home that compliance with san francisco labor laws is essential for the success of a new small business,

and we have partnered with the san francisco police department to provide a uniformed presence for olse on job site visits and take a united approach to human trafficking cases. we do have challenges. there is a statistic in the legislative analyst's report that a minimum wage cases are resolved by the olse in a median of 23 days. at the dlse, a case would probably not even be assigned a case number in the length of time. a significant number of cases are resolved within a day or two, but sometimes, cases have complicated pay schemes. sometimes, cases raise issues for which we need legal guidance, involve uncooperative employers, or they're difficult attorneys, and they are not resolved as promptly as they should be. can we do better? yes. occasionally, we're dealing with businesses that are closed and

individual owners our judgment- proof, and we just cannot collect back wages or penalties owed. in closing, i am proud of our record. we are constantly looking for ways to be more effective and more efficient as we try to make the best of our resources. i am appreciative of the time that the legislative analyst put into their review. we have already instituted a number of their recommendations related to our record keeping. i appreciate the efforts of the supervisors and your aides to prioritize the issue of wage theft and how we can end it, and i fully support the efforts of the progress of worker alliance to turn the tide from wage theft to wage justice. supervisor campos: i think we have a quick question. supervisor farrell: thank you for the work that you and your department do. i know there has been discussion about how the olse has been

underfunded over time, but at the same point, my understanding is your responsibilities have truly ballooned during that time. i wonder if you could talk about your personal thoughts as the head, whether the current staffing levels are adequate to do with what you are basically tasked with doing. i would love to hear that. >> thank you, supervisor. we started out as an agency and forcing one law with a staff of three. when the minimum wage ordinance was passed, there was no funding dedicated to its enforcement, and we rededicate -- another unit was merged into the olse that wasn't forcing the living wage and living hell ordinances, and we dedicated their resources -- that was in force in the living wage and living health ordinances. health care was passed, and no

staff was provided. i believed it was last year that the board fought hard to get an additional staff person added for health care, and that was a hard struggle in the ad that process. it ended up that we were not able to fill it until we could show that we had raised an additional $100,000 in penalties to do so, which we have done now two years in a row, but we still have not fill that position. we also have a vacant position -- we have a very flak work chart -- supervisor campos: you have not filled the position? because a lot of heavy lifting was done at the board to make sure that happen. >> what i did instead was i took an investigator from prevailing wage and moved them over to health care. about three years ago, there was

a deputy director position that was cut, so i have no assistance -- assistants or deputy. six months ago, our one senior analyst -- there is me, there is one clerical position, and there's 14 investigators. we had a senior analyst, who many of you know was an aide to a board member previously, and we have been unable to back fill that position. yes, if we could just fill our two vacant positions, that would be an enormous help. effective enforcement of all of san francisco's ground breaking labor laws is very challenging with our current staffing. supervisor campos: thank you. why don't we hear from the

budget analyst? to provide context of my office asked the budget analyst to do an assessment of how the olse was doing in terms of meeting its very challenging mandate, with the very clear understanding that they have very limited resources, and, so, i think that supervisor farrell 's question is appropriate in terms of understanding where things are. why don't we hear briefly from the budget analyst? >> thank you, supervisor. good afternoon, supervisors. i am from the budget and legislative analyst's office, and i am joined by my colleague, who assisted with some follow-up analysis. i will briefly present some highlights from the comparative analysis we conducted on labor standards enforcement san francisco and at the state level.

we were asked by supervisor campos to compare the city and state investigative and hearing process is for employee minimum wage claims. we were also asked to compare the assessment of penalties and the collection of wages and penalties. finally, we were asked to identify best practices and inefficiencies at both agencies. this slide -- some of these issues have been talked about, but this gives you a little bit of background. the office enforces seven ordinances, including the minimum wage ordinance, which was enacted in 2003 by the voters. the office received 75 minimum wage claims in 2009 and allocates a portion of fixed staff to minimum wage cases.

our analysis came up with three main findings. our first finding was that case processing is lower than the state, specifically the average time between the receipt of minimum-wage client until a formal hearing takes place an average of 788 days in san francisco, but only 200 days for the state. the average is 45 cases that have gone to a hearing that do not represent the entire caseload. this contrasts with the investigations that cannot go to a hearing. some hearings were resolved in favor of the claim that took a average of 67 days. >> you talked about the averages here. what is the median?

>> i do not know if i have the median for all of the cases in front of me. this represents up until the time we did our analysis. this represents a very small portion. >> our numbers seem much different comparatively. is it one or two cases blowing up the average? is the average right around 788? >> it is my understanding that there was one case that took a lot longer. >> there was one case that took about four years. the median is 524 days. there was one case that took about four years. i think it was about 1.5-2 years for all of these cases. >> you take that one out and what is the average?

>> i could probably get that to you after the meeting. >> i would love to understand the details of this. if is an anomaly, we want apples to apples cases. >> the state takes a different approach to processing and investigating minimum wage cases. the state takes a more hands-off approach. they use employer self-audits. when settlement is not possible, they administer formal hearings on their own court. the burden of proof is more on the claimant. they investigate payroll. they investigate more when they are made aware of more compacted workers. the state has mandatory time

lines for claims. they also have a 120-day deadline for holding formal hearings. san francisco does not have time lines for an initial review or holding formal hearings. our second main finding was that san francisco collections of wages and penalties is at a higher rate than the state. recordkeeping could improve. we found that between january 1 and november 15, olse collected 15% of what was assessed in that period. the state had only collected about 19% assessed in that period. they do not maintain a record of employment on plan. our last finding specifically,

we found that olse does not provide reports to supervisors on the implementation of the minimum wage ordinance, despite the requirement to do so. our recommendations for case processing include suggesting that the board of supervisors' request that the city attorney work with the director to draft amendments to the ministry of code to add timeline for initiating the investigations and including the hearing process. we suggested that the board requests working with the city attorney to reform the hearing process by simplifying the hearing that preparation requirements and by changing the administrator code to shift to the employer by allowing a default judgment based on the

audit findings, which are contained in their letters of determination. we also consider that the board consider amending the admin code. we also had a recommendation on transparency and general practices at olse. our recommendation is that the board provide a report to the board of supervisors. we have recommended sdata points -- recommended data points that could