so that we can collectively address this crisis. finally, i want to give a special thank you to so many of the advocates who have been working on these issues for so long. the progress of workers alliance -- without the progress of workers alliance and especially the work of the chinese progressive association and young workers united, we simply would not be here today. pwa has been working tirelessly on this issue and making great strides to bring the often invisible issued to the forefront, so i want to thank you for your advocacy. before we move on with presentations, i want to turn it over to supervisor mar, though, again, has been a leader on this issue for quite some time. supervisor mar: thank you so much for really bringing together a tremendous coalition. many of you were out there with

us with hundreds of people, a rainbow see of activists and families and workers rights advocates and organizers that have been calling attention to an urgency of thousands of people, workers in our neighborhoods being cheated out of their hard-earned pay by unscrupulous, that employers. again, we want to make sure we are saying that most employers are good employers and that it is the bad employers that cheat the workers with rampant wage theft-many different neighborhoods causing unfair competition in many of our neighborhoods, so we want to support the good businesses and small businesses in our neighborhood and hold accountable the bad businesses that are out there. i also wanted to say that there is an urgency to this issue. even though the chinese progressive association and uc- berkeley and other researchers identified the huge numbers of people being ripped off in our

communities, and it takes grassroots organizations to recover the $560,000 in stolen wages, but there is so much of the work of the community-based group that goes into recovering those wages. we need stronger basic labor protections. many of the workers' organizations that were identified in the grass roots research, but it is a basic human right, they say, that labor protection and workers' rights are basic human right. this will just strength in labor law enforcement at the local level and help workers and working families recover these stolen wages much more quickly with clearer timelines and better accountability. it will improve accountability and transparency in the process as well and create better noticing so that workplaces and neighborhoods know of the bad employers, and set more of a

level playing field for all businesses. lastly, other efforts by the grass-roots coalition the progress of workers alliance leadership -- it is going to improve collection and data sharing and hopefully set up at some point some sort of task force as a way of holding accountable the local government to even improve the labor law enforcement for the future. i just wanted to give my tremendous respect to the grassroots organizing, the building of a broader labor community alliance in our community, across communities, and especially using grass-roots research, action-based research from the bottom of that and forms better policy-making and better local policy so that we stand up to end wage that in san francisco, but we continue on other efforts to empower workers as we move forward as local government officials as well. hats off to supervisor campos

for his leadership and the coalition here today. supervisor chiu: i just want to make a couple of brief comments. i want to thank my colleagues for their leadership on this issue, and to reiterate that there are some misconceptions about what the issue is about. this issue is not about workers versus businesses. the issue is about workers and thousands of law-abiding businesses versus those businesses that are violating the law. i think that is a very important point to recognize. secondly, i want to thank cpa for the work they did looking at particularly chinatown restaurants, but to reiterate, this is not an issue just about chinatown. this is an issue that affects working neighborhoods and working families all over our city, and i again want to thank the broad coalition, including the progress of workers alliance, workers united, cpa, and others working diligently on this. the last thing i will say is part of what we are trying to do is to educate everyone about the

issue of wage theft, particularly those who may have language barriers and for whom english may not be their first language. i want to thank the media that is here. this is something that we all need to do a better job of alerting folks as to the fact of wage theft, the fact that we have a lot of good businesses, and the fact that there are many businesses in violation of the law that need to be dealt with. i also want to thank our city's olsc for the work you're doing. i know we are going to have a discussion about the tools and resources we can provide to your agency, and i think that it's a worthwhile and a good conversation. supervisor campos: thank you. the way this hearing is structured is we will begin by having a couple of -- a number of people present, but the first section of the presentation deals with the issue of understanding what is wage

theft, how prevalent it is, and how it impacts the city and county of san francisco. we have a couple of presenters on those issues. if i may ask them to come up, and i would ask each of you to please limit your comments to a couple of minutes, and, of course, it translation is needed, you have double the amount of time to present, so thank you for being here. >> thank you for holding this hearing today on the very important issue. i appreciate the remarks that everybody made about the seriousness of the wage theft epidemic and the need for the city to address it. i think that the comments that the supervisors have made sure that you have an understanding of the issue, so i'm not going to spend too much time

delivering the same point of around how wage theft in taxes, but i want to point out that this is a historic day. may 12, 2011, is the first time san francisco is holding a city hearing on the issue of wage theft. is the first time city leadership and multiple city agencies are being called together to look at what is happening from -- having to wage workers. we think it is important to note that this is a city -- this is an issue that has long been left by the wayside and left to advocates, under funded agencies, and workers themselves to fire out. i can say that i know workers who are members of the progress of workers alliance are happy to hold this hearing and hope it is not just one day of publicity but that it will really be a deep commitment on the part of san francisco to the lowest paid members of our community. wage theft is an issue not just

hitting san francisco. national studies show that 2/3 of low-wage workers in different industries of different immigration status were impacted by wage theft. locally, the examples that i wanted to share with you include problems in the caregiving industry where care givers are working 1624/hour shifts with no overtime, no breaks, and certainly no minimal wage theory with issues in the construction industry where day laborers are robbed of their wages after being promised to be paid after the work is completed. we have security guards, beauty salon workers. we have retail workers, we have factory workers. many different industries, many different neighborhoods in san francisco where we see wage theft happen. i would like to turn the floor over to someone who will speak to her personal experience as one example of the many examples happening in san francisco.

>> [speaking foreign language] >> good morning. i really want to thank so many supervisors for being here today and giving me a chance to share my story. i came to the u.s. seven years ago, and my first job was working in a store where i was working six days a week and getting paid $800 a month. then i went to a restaurant to

work because i had two children, and i wanted to work a little bit less hours, so i ended up working only eight hours a day six days a week, and i was getting paid $900 a month. so we did not have benefits like paid sick leave. we did not have over time. health insurance -- do not even think about it. we had none of those kinds of benefits. because the boss did not want to hire too many workers, we ended up having a very large workload. i was one of the waitresses, i just had a couple of other people sharing the work load.

and now like, when we were sick at work, because we did not have paid sick leave, if we had it stay home, we had to make the day up on our one day off the next week. so then, even with it came to our tips, the boss said, " i'm working here, too, so i'm going to take some of the tips, and the company needs its share, and if it is a credit card payment, we take a deduction from the tips." every way, they were finding ways to deduct from our tips. then, when it came to our workload, we were working so hard to get the work done, but when we could not complete all the tasks assigned to us, the employer would yell at as an

abuse us on the job. that is why i believe that ending wage that -- wage theft for our workers and families is a very critical issue. thank you very much for the opportunity to share my story. supervisor campos: thank you very much, especially, thank you for your courage to share that with us. i know it is difficult to come forward with something like that. and i'm just going to wrap up with a few more comments in general about wage theft in san francisco. the progress of workers alliance is concerned not only with wage theft but with job creation. when unemployment is high, it increases vulnerability to workers. for a strong economy, we need good jobs. we do not need more jobs with wage theft.

we need to make the bag jobs good and create new jobs that are also good. wage theft is hurting our economy. just a few more points. it is the year 2011, and decades and decades ago, basically -- basic worker protections were passed in this country. as a progressive city, san francisco has passed the most progressive labor protection for people in the country, law is being emulated across the united states, and yet, the minimum-wage is still not being enforced for so many workers. we think it is high time that this issue is addressed. furthermore, as supervisor campos mentioned, it is not easy for workers who are struggling, working 12 or 16-hour days and trying to take care of their families, to stand up, fight for their rights, go to meetings, file claims, talk to their government. that is not easy to do. think about trying to do that

just to get paid. on top of that, you have to wait a year, tw years, sometimes even three or four years before you even get the pay you shed have gotten after you worked. this is unacceptable. you would not accept it as supervisors, and workers in san francisco should not have to accept it either. we want the city to take a stronger commitment to enforcing the law in a timely manner and protecting access and opportunity for workers to file claims and receive justice. i wanted to just pick out a few of the key issues we think the city could take immediate steps to address in dealing with the wage theft crisis. 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