SF unionized trades back local “labor compliance bond” requirement to overcome construction wage theft

The San Francisco Building and Construction Trades Council (SFBCT) is backing a proposed local ordinance to thwart construction wage theft on non-union sites.

“If passed, the legislation would essentially require property owners and contractors to maintain a labor compliance bond, which would be released for labor-standards compliance on any given project,” the labor organization reported recently in its newsletter. “San Francisco wouldn’t be the first city to establish such a law, but it’s the city’s existing strong labor protections that could give the law the teeth necessary to make a difference.”

The organization representing unionized workers asserts that “due to unique labor-standards compliance challenges and the often-transitory nature of work, the construction industry has the distinct dishonor of coming in second place for highest number of labor-standards violations. It is surpassed only by the restaurant industry.”

“Whereas union construction workers have recourse outside of the law to help them resolve wage issues — for instance, collective bargaining, grievance procedures, access to legal experts, ongoing relationships with contractors, and other remedies — their non-union counterparts usually do not,” says the published newsletter article “So, they frequently fall victim to wage theft schemes and face an uncertain battle to get their pay recovered, as the state lacks sufficient resources to enforce labor laws effectively.”

District 6 Supervisor Matt Haney’s proposed Wage Theft Prevention Act “could help make construction work less exploitative for non-union construction workers and fairer for their unionized counterparts,” the story says. The proposal is set to be heard in the Land Use Committee in February.

“The No. 1 thing we see is that immigrants are being cheated out of some or all of their wages,” said Matthew Miller, senior field representative for labor compliance with the NorCal Carpenters Union, who estimated that 99% of the people he helps are immigrants, 80% of whom aren’t conversant in English.

“So, you see a system that’s taking advantage of people who don’t necessarily understand the law or their rights. That leads to fair contractors not getting jobs and taxes not being paid to the state. It’s billions per year in taxes that the state’s missing out on and we as the public are also missing out on.”

California State data indicates that only about 2% of construction wage theft claims are collected.

“This legislation is designed to make sure that workers get paid what they’re owed, requires project owners to accept responsibility for the completeness of their contractors’ payroll records, and prevents the issuance of certification and final completion and occupancy until any outstanding labor violations have been resolved,” Haney said. “This is a simple but necessary fix to a loophole to ensure that project owners certify that workers have received legally required pay stubs. That protection for workers makes it more effective, if there is a violation, to go after the project owner and make sure people get paid.”

“We see over and over again how non-union contractors really use the exploitation of workers as a fundamental business strategy, undercut union contractors, profiteer, and hurt workers,” said San Francisco Electrical Construction Industry Director of Research and Advocacy Alex Lantsberg, who noted that property owners and contractors are currently required to provide more documentation on how construction waste is disposed of than on how its workers are paid. “This legislation asks developers to basically just put up a bond to ensure the workers are paid on the project. It creates an accountability and a responsibility mechanism to make sure that workers get paid if problems should arise in the project.”