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San Diego Mayor Wants to Add Another Tool in City's War on Wage Theft

The San Diego Union-Tribune

Mayor Todd Gloria has put forth a new proposal aimed at battling wage theft in San Diego. Unions have been calling for more oversight to vet bad contractors through greater accountability and it looks as though Gloria's proposal will help satisfy this ask.

Opponents argue that the extra "paperwork" will slow construction and that the measure is too "punitive." However, proponents feel the potential benefits of the proposal far outweigh any inconveniences contractors may find themselves subject to.

The Proposal

If Gloria's proposal is enacted, it will provide another weapon in the city's ongoing battle against wage fraud and worker miss-classification- a problem that has become prevalent throughout the entire State especially in San Diego County. 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 annually.

The proposal stipulates that when applying for building permits, contractors must disclose several new pieces of information before any ground is broken. The information includes; workers' compensation policy numbers, state contractor licenses, city business licenses and pending or prior labor enforcement actions taken against the applicant.

“I think we do have a responsibility as a city to ensure we’re aware of the track record of the contractors used to build permitted projects in San Diego,” said Vivian Moreno, one of the three council-members who voted in favor of the proposal.

The required disclosures would affect residential and mixed-use projects of 20 or more units and commercial or industrial projects over 20,000 square feet. Additionally, they would be required for a project in the public right-of-way.

On the Right Track

The proposal comes on the heels of some important moves that San Diego County and the State of California have made to battle this type of criminality. Last year two bills were signed into law by Governor Gavin Newsom; Assembly Bill (AB) 1003 and Senate Bill (SB) 727. AB 1003 specifies that intentional theft of wages or tips by an employer will be punishable as grand theft while SB 727 aims to directly recoup unpaid wages, fringe benefits, and labor fund contributions through penalties and liquidated damages.

In San Diego, District Attorney Summer Stephan formed the Workplace Justice Unit. The Unit consisting of a dedicated prosecutor, District Attorney investigator and a paralegal, will focus on prosecuting unfair business practices, wage and hour violations, payroll tax evasion, wage theft and labor trafficking cases.

Gloria's proposal, centered in San Diego City, capitalizes on the State's momentum and provides oversight to further put a stop to these unscrupulous business practices. “It’s going to ensure that irresponsible developers and criminal contractors stop abusing and cheating workers,” said Christopher Allen, special representative from the Southwest Regional Council of Carpenters.

Benefits far outweigh the risk

Opponents of the proposal, including the Southern California Rental Housing Association, argue that contractors will be hampered by the disclosures as their subcontractors are sometimes hired at the last minute and that the paperwork will cause delays. City officials dismiss this assertion saying that contractors will have the ability to quickly submit the information by mobile phone from work sites.

Matt Adams, a representative of the Building Industry Association, who also opposes the proposal, argued that potential stop work orders are extreme. “It’s overly punitive,” he said. “Do you really want to stop work on projects because of paperwork violations?”

When reached by BDN for comment regarding Adam’s assertion, Allen responded, "This is a simple online process; it seems the voices that are speaking in opposition to this do not want their business practices made public. Are they trying to protect a residential industry built on wage theft and exploitation? They want zero accountability for their business practices. No law abiding contractor should fear transparency."

The proposal was approved 3-1 by committee on June 16 and will now move on to the full council.

Read full story on San Diego Tribune

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