A growing number of workers in California have fallen victim to wage theft. An estimated 40,000 people are being exploited in San Diego County alone, according to the district attorney’s office.
Wage theft commonly occurs at construction sites, with workers often being paid in cash and under the table. This leaves them vulnerable to exploitation, as they may not receive pay stubs to prove their employment and file taxes.
“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 the Southwest Regional Council of Carpenters.
NBC 7 Investigates spoke with three construction workers who asked not to be identified. The pseudonyms we use for them are Alfonso, Ruben and Juan.
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“When they come to pay you, you see the hours and it was less than the hours you did,” said Alfonso. “They tell you ‘Oh, if you don’t write it like on a paper or something, it don’t count.’ OK, and then you, like, the next week you write it on the paper and go to them and they tell you the same thing, ‘Oh … it does not count, too.’”
The workers said wage theft occurs at a vast majority of construction projects in San Diego County. A general contractor in charge of the project will hire subcontractors, who then hire “labor brokers.” The job of the labor brokers is to find people to do the actual work, such as plumbing, electrical, and drywall. The labor brokers also get to decide how to pay workers.
“I mean when they pay you cash, it’s just cash,” said Ruben. “It’s under the table, that’s it. They don’t tell you, they don’t give you no W2 forms or anything like that.”
Cash payment is not illegal—but being paid under the table is. Union representatives say cash allows labor brokers to more easily break the law, and the practice puts both documented and undocumented workers at risk of wage theft.
“Even though you have a social security (number), right? You’re going to be paid cash, too because that’s just the way it is,” said Santizo. “In that company that’s the way it operates and it’s grown so much that people that have the legal right to work here, they can’t do anything about it.”
Many victims of wage theft are also victims of labor trafficking.
“You end up being trafficked through the border,” said Santizo. “So once you’re trafficked, you’re trafficked by the coyote, he brings you over. That coyote has a second point of contact which normally is the labor broker who has a stash house… So once the worker initiates his job, at the end of his workweek, he needs to pay for the stay at that house and he also needs to pay the labor broker for either using the social security (number) or just for him to be able to work the following Monday.”
Santizo says some labor brokers will threaten workers with deportation if they complain about wage theft. In some cases, they even threaten to harm the worker’s family in their home country.
Earlier this year the office of San Diego County District Attorney Summer Stephan launched a Workplace Justice Unit to investigate and prosecute claims of wage theft. Since March, the unit has received 35 complaints—five of which come from construction.
“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.”
Wage theft doesn’t only impact the workers. According to Stephan’s office, it is estimated California loses nearly $10 million annually from this type of fraud.
“So that leaves your first responders, your schools, your courthouses, your highways, your public work branches not properly funded because the taxes are not coming into the community,” said Santizo.
The county is currently working on a new Office of Labor Standards and Enforcement, which will help workers navigate the process of filing complaints.
The goal is to help make sure workers are not only paid the wages they’ve earned but to help give them the opportunity to build a better life.
“When they pay us cash, the downside, or you know, the con is that we’re not able to do taxes or get a credit line or even change apartments,” said Ruben. “I mean it’s so hard for us to be getting cash, not be trying to, not working our credit or taxes for some future benefits I guess.”
Stephan says labor brokers who break the rules also impact legitimate businesses because they are pushed out of the bidding process.
“The honest employers who are paying a fair wage, they’re paying everything that’s legally required, they have their employees on the payroll, then they can’t compete to get the jobs,” Stephan said.
California Governor Gavin Newsom signed a new bill into law this week strengthening wage theft laws by making it punishable as “grand theft.”
Any victims of wage theft are encouraged to report the incident to the county’s Workplace Justice Unit. You do not need to reveal your immigration status to file a report.