What is the cost to enforce minimum wage hikes in cities across California?
It is an important question in Oakland and San Diego, which are considering increasing the minimum wage within their jurisdictions.
San Francisco and Washington, D.C., which have city minimum wage laws, have spent millions and hired a group of full-time employees to investigate claims of wage theft.
San Francisco contracts with workers’ rights groups to ensure timid employees can blow the whistle on their underpaying bosses without fear of retribution.
Both cities take the unusual step of collecting an income tax on workers who earn money within their boundaries.
Cities are spending millions on full-time employees to investigate claims of wage theft.
But economists say it goes beyond the expense of hiring a team of “wage cops” to police employers. It could give third-party groups a mechanism to levy financial information from private companies and potentially harm family-owned businesses, said Sean Mulholland, an associate professor of economics at Stonehill College in Easton, Mass.
When a complaint is filed by an employee or a third-party organization against a business in San Francisco, city auditors can review financial data of that business for several years prior to assess fines and determine if back pay is owed.
The prime recipients of the San Francisco’s contract are La Raza Centro Legal, a legal organization “dedicated to empowering Latino, immigrant and low-income communities of San Francisco.” The Chinese Progressive Association, a political activist group with similar aims but focuses on Chinese immigrants within the city, gets a large portion of contract funds as well.
La Raza’s website features success stories of collecting millions in back pay for workers.
Recently, the legal organization filed a joint complaint with the city of San Francisco against Tower Car Wash, which allegedly forced employees to arrive at a pre-scheduled time but did not allow them to clock in until it got busy.