BUSINESS

Four Indio landscapers are among thousands of Californians still trying to collect back wages

Palm Springs Desert Sun

Victor Munoz and his son Victor worked for months on landscaping projects near Interstate 10 and were never paid by their employer, they allege.

In 2012, Victor Muñoz and his adult son, also named Victor, started a new job. The landscapers' employer got a contract to work on the new I-10 interchange at Date Palm Drive in Cathedral City. Their boss told them they'd get paid at the end of the project, they testified in court documents.

After a few months, the younger Victor said he walked away, sick of not being paid. But his father held out. The CalTrans-funded project offered prevailing construction wages, meaning it could pay more than twice as much as his typical work.

In June, the work ended, but the pay never came, the Muñozes and two of their coworkers alleged in court documents in 2015.

"It was hard work, it was hard labor, and not being paid, all of that combined, it took a toll on you," said the younger Muñoz, who lives in Indio. "You didn't want to wake up every morning to go to work. I was discouraged. To this point, I think about it. I wish we would've done something more about it."

Many employees who work on contracts and in low-wage industries are paid less than they should be for their work, experts say. Some never earn overtime pay. Some aren't compensated for materials they buy or miles they travel. Others never get paid at all.

Most live with it.

Labor lawyer and UCLA researcher Tia Koonse estimated that only about 5 percent of California workers who are underpaid file any kind of claim — either in court or with the state or federal government — to try to recover their wages.

The lawyer who represents the Muñozes, Megan Beaman of Coachella, said many workers don't know they can take action or are afraid to.

"Either people don't want to complain because they don't want to lose their job or risk getting blackballed, unless something else has happened — they've been fired, quit for some reason, or there's no risk of retaliation on wages," Beaman said. "It has to be really extreme for them to finally take action."

When workers do file claims, the majority accept settlements from their employers, said Tim Bowles, a Pasadena-based attorney who represents businesses.

But in cases that aren’t settled, many workers never get paid a dime.

California's Division of Labor Standards Enforcement (DLSE), a state agency tasked with making sure companies follow wage laws, hears disputes between workers and their bosses and makes rulings as a last straw.

According to a legislative report, the DLSE found employers owed workers more than $50 million in unpaid wages in the 2015 fiscal year. Only $13.6 million of those back wages were collected.

The Muñozes took their case to civil court instead, but got a similar result. In December 2015, a judge ordered their employer, American Landscape and Pools of California, to pay the four plaintiffs more than $250,000, accounting for unpaid wages and penalties.

The Muñozes say they're still trying to enforce that judgement and they haven’t gotten a cent of what the judge ordered.

Their employer, Roel Sanchez, said their allegations were lies. He told The Desert Sun he paid the litigants years ago.

But he never responded to the allegations in court.

'Wage theft'

The Muñozes are victims of wage theft, their attorney says — an emerging term for what happens when employers do not adequately pay their employees.

In service and low-wage industries, underpayment is widespread, attorneys who spoke to The Desert Sun said. In businesses with contractors and subcontractors, like construction and landscaping, margins are thin, and people get squeezed at every level.

Experts struggle to estimate how widespread unpaid wages are, but an oft-cited 2009 report from the National Employment Law Project found that 18 percent of workers surveyed had stayed late without pay in the previous week; 41 percent had seen materials or transportation costs deducted from their paychecks; and 57 percent had not received copies of their pay stubs — all violations of law.

"Because we have such a large, especially low-wage, kind of marginal economy, lots of shady businesses have figured out that they can get people to work and then not pay them," said Catherine Fisk, a law professor at the University of California, Irvine.

California employees who choose to report wage theft have three legal avenues for getting paid. The most common is filing claims with the state's Division of Labor Standards Enforcement.

In the DLSE's San Bernardino office, 3,046 claims were filed in 2015. About 78 percent of those were withdrawn or settled, according to data from the office.

“The whole system is geared to negotiation and resolution informally,” said Bowles, the attorney who represents businesses. “My employer doesn’t necessarily have the resources to take the claim all the way through the process. They’d rather just pay the guy something in between, pay less attorney’s fees, and be the heck out of it.”

Workers hold a rally in support of a Los Angeles County Board of Supervisors' proposed minimum wage ordinance, in Los Angeles, on Tuesday, July 21, 2015.

In 18 percent of the San Bernardino DLSE’s 2015 cases, hearing officers ruled employees were owed money — $7.1 million in total.

About half of those workers asked the DLSE for help enforcing the rulings. The agency has only been able to collect about $203,000 so far.

“It’s not enough to issue a citation, investigate and find that (wages are) owed. We need to actually get the wages,” said California Labor Commissioner Julie Su. “Often the worst actors play the shell game — they steal wages and then they shut down and they transfer their assets to a family member and open up a new business. We’re using all our tools to aggressively make sure that doesn’t happen.”

The agency has gained significant power under Su’s tenure. The Legislature empowered the DLSE to freeze the assets of employers who owe money. Legislation also allowed the office to go after the holders of janitorial contracts if janitors report underpayment.

In 2012, the DLSE began sharing information with district attorneys for the first time, Su said. Since then, their referrals have resulted in about 110 charges statewide.

But Fisk and Beaman said that while charging employers with crimes may feel just, it may not help workers get paid.

Criminal cases are also much harder for workers to win.

"To prove beyond a reasonable doubt that a business failed to pay wages that were owed is going to be a substantial investigation, because they would have to intentionally have failed to do that," said Elise Farrell, a Riverside County deputy district attorney. “That’s going to be quite an investigation.”

Taking claims to court

Employees with large enough claims can file civil court cases, like the Muñozes did. Often settlements are the goal, Beaman said — even if they settle for less than they hope, at least they get paid.

But the Muñozes' employer, Sanchez, never responded to their lawsuit. That allowed the Muñozes to submit written testimony and logs of their hours as evidence. Nearly a year after they filed their case, a judge issued a judgment — a legally binding order requiring Sanchez to pay.

Sanchez owed the four men about $138,000 in unpaid wages and about $116,500 in interest, penalties and damages, the judge ruled.

"A judgment is a piece of paper, that's all it is. The court's job is done," UCLA's Koonse said. "Yippie, you have the right to this money, which you already knew you had the right to anyway. You have to go out and enforce that judgment."

A year and a half after the judgment was issued, the Muñozes have hired an attorney who specializes in collecting judgments. They have to figure out what their employer’s assets are to try to place liens. All the while, they know he could play the “shell game” Su described, or just file for bankruptcy.

The Muñozes complained to CalTrans in the months after their work ended. According to documents filed in court, CalTrans investigated the prime contractor and American Landscape and Pools and found fault with both. A 2015 letter from CalTrans to Victor Muñoz Jr. said the agency found "that (American Landscape) failed to pay the required prevailing wage rate" and the men were owed back wages.

CalTrans withheld payment from American Landscape and sent checks to the four workers in the Muñozes’ suit. According to court filings, the largest one was for about $2,700.

Again, Sanchez denied that he owed the litigants any money, and said he couldn't afford to pay what the judge had ordered him to. He said the contractor who’d hired him, who Caltrans also investigated, hadn’t paid him either, but insisted he’d still paid his workers.

"I just wish they would leave me alone, but they're not going to leave me alone," he said. "I don't know why they think I have all this money. That's a ridiculous amount of money.”

'In everybody's interest'

While new laws can help underpaid workers collect back wages, attorneys on both the employer and employee side said their goal is to get workers paid on time in the first place. That requires industry-wide culture change, UCLA’s Koonse said.

"In some industries, the entire industry cheats, the entire industry doesn't pay overtime or has workers work off the clock," Koonse said. "It's unrealistic, when the business incentives are set up to do the opposite, to ask employers to comply... We're trying to fix the incentives so employers are incentivized to charge (higher) prices; people are willing to pay the prices that enable them to pay their workers."

Attorney Bowles said most of his clients underpay workers accidentally, because they aren’t familiar with the law, and end up settling their cases. He encourages employers to pay on time and keep written records of hours in case they’re ever sued. That lets everybody “prosper,” he said.

After all, Fisk said, the ramifications of unpaid wages reach beyond workers who say they’ve been cheated.

"When people aren't getting paid, they have no money to spend. That's bad for their families, bad for their communities," she said. "It seems to me in an area like the Coachella Valley, it would be in everybody's interest to have a labor market where people get paid what they're owed for their work."

Victor Munoz and his son Victor worked for months on landscaping projects near Interstate 10 and were not paid by their employer, they allege.

The Muñoz family has moved on. The elder Victor Muñoz is back to installing pools, though an injury last year slowed him down. His son, who now works for an irrigation company, has twin toddlers.

"I recommend that people who know these guys, ask for the money. The first week you work for him, 'pay me.' No more waiting," Victor Muñoz Sr. said.

"It's been a learning experience for me too," his son added. "If I'm not going to get paid at the end of the day, I'm not working for you."

Rosalie Murphy covers real estate and business at The Desert Sun. Reach her at rosalie.murphy@desertsun.com or on Twitter at @rozmurph.