Labor official pledges crack down on wage theft in the restaurant industry

Arguing that “every worker deserves a just day’s pay,” U.S. Deputy Secretary of Labor Julie Su on Thursday pledged to crack down on wage theft in the restaurant industry.

Su addressed the problem of wage theft during a video press conference hosted by the advocacy group Fight for $15 and a Union, which this week released a survey indicating 85% of about 400 fast-food workers across various brands  in California have experienced some form of wage theft, including violations such as not being paid overtime, work conducted before clocking in or after clocking out, and being denied meal-and-rest breaks.

The event was designed to raise support for legislation in California, Assembly Bill 257, that would create a Fast Food Sector Council in the state, with representatives from the industry, workers and regulators, to establish standards for wages, hours and other working conditions punishable by fines. The bill would also require franchisors to be jointly liable for violations by franchisees.

Dubbed the Fast Recovery Act, the bill has passed the House in California and but still must be approved by the state Senate before reaching the governor’s desk.

The California Restaurant Association has been working with lawmakers to oppose the Fast Recovery Act, saying laws are already in place to protect workers and punish “bad actor” employers.

Jot Condie, president and CEO of the California Restaurant Association, said creation of a Fast Food Sector Council would be “an extraordinary abdication of their power as a legislature, when they are charged with enacting and overseeing fundamental workplace policies. And to hand that over to, really, unaccountable committee members is a head scratcher, especially since the state has the most robust worker-protection laws in the nation, if not the world.”

Endorsed by the SEIU, the Fast Recovery Act is also being pushed by labor organizers at a time when unions are gaining ground in the industry, he said. 

 “We haven’t seen a widespread pattern of wage theft in the quick-service industry,” said Condie. "This is a solution in search of a problem."

At the federal level, however, some lawmakers are considering stricter penalties for wage theft. 

Rep. Rosa DeLauro, chair of the House Appropriations Committee, has introduced the Wage Theft Prevention and Wage Recovery Act of 2022, which Su said would strengthen penalties for employers.

The bill, for example, would reportedly require employers to provide pay stubs to workers, establish new civil penalties for employers and provide grants to enhance enforcement of wage-and-hour laws. Republicans have opposed the bill, saying it would hurt small business.

Su, however, said the legislation does not have much hope of passage. 

“I don’t see this bill making it through the Senate to the president’s desk for signature anytime soon,” she said of the proposed wage theft act. “But it’s an example that shows policy makers are listening.”

Su, who was California’s labor commissioner from 2011 to 2018 before she moved to the federal Labor Department, has long been a champion for worker rights. In California, she launched the first “Wage Theft is a Crime” campaign to educate workers about wage-and-hour issues and encourage them to speak out about abuse.

On Thursday, Su called wage theft “an interest-free loan that business owners get from their employees.” She also said it creates unfair competition that hurts business owners who pay their workers fairly. And it is a matter of racial justice, more likely to impact women and workers of color. 

To workers, she said, “The Department of Labor stands with you. The Biden/Harris administration stands with you.”

The Labor Department has stepped up enforcement of labor laws that protect workers in recent years. The department’s Wage and Hour Division conducted 4,237 investigations in the food service industry in fiscal 2021 and recovered $34.7 million in back wages for more than 29,000 employees nationwide, according to the Labor Department.

At the Fight for $15 event, Maria Bernal — a Jack in the Box worker in Sacramento, Calif., who also said she worked at McDonald’s — estimates that she is owed $150,000 for violations over the past nine years, saying her employer has forced her to work for free to avoid paying overtime. After her husband was deported, she struggled to support her family and spent six months living with her children in her car.

Bernal has filed a complaint with the state, but a backlog could delay any result for months or possibly years, advocacy groups say.

Manuel Pastor, a professor of sociology and American studies at USC who also participated in the press conference, said one in four fast-food workers live below the poverty line, and an estimated 36% receive Medi-Cal, the state’s medical program for low-income residents. 

Wage theft makes it more difficult for such low-wage workers to get by, he said, and it also impacts society as a whole.

“When you have people who have to rely on public assistance, that drives up the tax bill for all of us,” said Pastor.

Contact Lisa Jennings at [email protected]

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