San Diego is an epicenter of a wage theft epidemic that exploits workers. The ripple effect can be felt by everyone in California due to the lost tax revenue from wage theft and cash pay. The San Diego County District Attorney's Office estimates that the State of California loses around $10 million annually from wage fraud. According to the District Attorney's office, in San Diego County alone, nearly 40,000 workers are exploited by wage theft.
Wage theft is most commonly found in the construction industry. Workers are often paid cash "under the table" with no record of employment and no tax documentation.
“These companies, the way they operate and to keep the cost down, is that they have irresponsible practices that include cash pay and misclassification of workers.” said Javier Santizo, a representative for a trade union.
This year, San Diego District Attorney Summer Stephan formed a workplace justice unit to combat wage fraud. The unit investigates and prosecutes claims wage theft claims. “The employers who are cheating their employees are usually committing multiple levels of crime,” said Stephan. “They’re not just cheating their employees… We see that they’ve committed tax payroll fraud, or they’ve committed workers comp fraud, they’ve committed other, up to labor trafficking violations.”
One of the ways that California Governor Gavin Newsom has responded to the scourge is by recently signing a new bill into law that makes wage theft punishable as "grand theft."
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