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Legislature's inaction on wage theft problem drives local ordinances

Holding a smooth wooden cane in one hand and rubbing his scarred knee with the other, Jorge Lopez-Serra sat at a kitchen table covered with unpaid bills.

Lopez-Serra, 45, recently took a part-time job with a cleaning company to sock away money for knee surgery and was assigned to a diner in St. Petersburg and an American Legion Hall in Clearwater. He said the company never paid the final $700 he was owed.

Lopez-Serra has since had his surgery and is recovering while on short-term disability from his job as a machine operator. He's only bringing in 70 percent of his salary. His wife, Rose Rodriguez, said the couple has struggled to make their truck payment.

"That was money we needed and still need," Rodriguez said.

Each year, more than 3,000 wage violation allegations like Lopez-Serra's are reported to the U.S. Department of Labor's Florida office. The state's six most populous counties accounted for the vast majority of cases, with Hillsborough and Pinellas coming in second and third only behind Miami-Dade County.

Some states have passed laws to crack down on employers who try to cheat workers out of pay. But in Florida, the problem has received scant attention from a state Legislature that sides with probusiness groups that say wage left laws put onerous burdens on their companies.

So city and county officials are following the lead of Miami-Dade, which in 2010 became the first in the state to pass a local ordinance to give workers recourse in wage theft disputes. The process has recovered millions for workers, so the city of St. Petersburg passed a nearly identical ordinance. Pinellas and Hillsborough are drafting theirs, cribbing all or parts of Miami-Dade's model.

"It's the Legislature's lack of action that's really forced us to go down this avenue," said Hillsborough County Commissioner Kevin Beckner.

• • •

Wage theft can take many forms, such as forcing a worker to stay late without compensation for that time, stealing tips or intentionally and improperly classifying an employee as a contractor. It often affects low-income workers in construction, agriculture and service industries like restaurants and hotels.

Wage theft data in Florida are mostly limited to violations reported to the U.S. Department of Labor, but those numbers represent the tip of a very large iceberg, said Bruce Nissen, a professor of labor studies at Florida International University.

A majority of cases go unreported because workers don't know where to seek help, fear retribution from their employers or don't understand state and federal wage laws, Nissen said. Many victims are undocumented workers who don't want to bring attention to themselves.

In 2000, the Florida Legislature voted to dismantle the state's Department of Labor and Employment Security, which handled wage theft complaints at the state level. Florida Attorney General Pam Bondi's office has not filed a single minimum wage violation action.

Bondi's office has not needed to file formal enforcement actions in minimum wage law violation cases because companies voluntarily comply when they are made aware of differences between state and federal law, said Bondi spokesman Whitney Ray.

The federal government only has jurisdiction over companies with more than $500,000 in gross annual sales that take part in interstate commerce, and overburdened U.S. Department of Labor inspectors can take a year or more to investigate and close a case.

• • •

In Miami-Dade, a worker files a complaint with county government, which notifies the employer and tries to broker an agreement in mediation.

If that fails, the case goes to an administrative hearing. If a hearing officer decides there's enough evidence to support the worker's claim, the officer issues an order requiring the employer to pay the wages plus an amount equal to two times the lost wages. The employer must reimburse the county for administrative costs.

The Florida Retail Federation filed a lawsuit saying the ordinance violated the state constitution, but a judge tossed the complaint.

A patchwork of local laws throughout the state would "significantly impact our larger members with multiple stores" and could harm smaller businesses that don't have resources to defend themselves, said federation spokesman James Miller.

"To them, it may be easier just to pay to make the issue go away then to contest it via the legal process and have the opportunity to prove their case," Miller said.

The local hearing process opens a door for workers to "game the system" with fraudulent claims, said Doug Buck, legislative affairs director for the Florida Home Builders Association.

Business groups tend to favor a model adopted by Palm Beach County, where the county government provides funding to a legal-aid organization to help employees pursue disputed wages in court. But Palm Beach is spending more on legal fees than what is being awarded to employees, and Miami-Dade is resolving many cases without lawyers and court fees, said Jeanette Smith, executive director of the South Florida Interfaith Worker Justice.

"It's getting harder to say Miami-Dade is horrible when the sky has not fallen," Smith said.

Through 2014, the ordinance has resulted in more than $5.6 million in claims and $3.1 million in wages and penalties being awarded or recovered, county records show. The county has resolved 780 cases during the conciliation process and 691 were forwarded to hearings.

In 2013 and 2014, hearing officers found in favor of the employer in 168 out of 291 cases.

"That shows you that the hearing examiners are really looking at the evidence and testimony and weighing everything," said Holly Beth Billington, a consumer advocate in the county's Office of Consumer Protection.

Contact Tony Marrero at tmarrero@tampabay.com.

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