Public Employee Press

Part 3 of a series on contracting out

Wage theft

By GREGORY N. HEIRES

The union has compiled evidence of 400 cases where unscrupulous city contractors are paying their workers below what the local Living Wage Law requires.

In some instances, sleazy employers are even pocketing city payments intended for vacation, health-care and other benefits.

“This is wage theft,” said DC 37 Assistant Associate Director Henry Garrido, who is meeting with contract employees.

“The use of employees from temp agencies to do clerical work has been a concern of ours for a long time,” said Clerical-Administrative Division Director Ronnie Harris. “We need to be vigilant about protecting our jobs, and as a union, we also have a broader mission to speak up for all workers.”

Wage violations

The union has collected pay stubs that document the abuse and has filed over 400 complaints of living-wage violations with Comptroller William Thompson, who enforces local labor laws. The living-wage ordinance requires city contractors to pay certain minimum rates and provide health and other benefits.

In a recent letter to Thompson denouncing Living Wage Law violations, DC 37 Executive Director Lillian Roberts wrote, “We believe the cost of the contracts is greater than if the city agencies hired their personnel as permanent employees and that the workers of the employment agencies would benefit by obtaining job security and medical benefits.”

Roberts noted that contractors for the Human Resources Administration, Dept. of Education and Administration for Children’s Services typically pay temporary clericals $8.50 to $11.50 an hour. Under the Living Wage Law pay schedule, contractors must pay clerical workers at least $14.34 per hour. (See graph below.) Meanwhile, the contractors’ CEOs earn as much as $600,000.

The DC 37 Political Action and Legal departments are working with the City Council on legislation to limit the widespread use of contract employees to do civil service employees’ jobs. Tens of thousands of consultants and temporary workers should be represented by the union, according to Roberts.

The action on the city’s use of low-wage nonunion contract employees to do civil service work marks a new stage in DC 37’s campaign to shrink the shadow government of an estimated 100,000 consultants and other workers.

Historically, the union has criticized contracting out for wasting taxpayer dollars on excessively paid consultants. But through his investigation of the shadow government, Garrido has uncovered widespread exploitation of low-wage contract employees who lack workplace protections and benefits. So, District Council 37 is now working to defend the rights of this overlooked underclass of the public sector.

George Gonos, professor of sociology and employment relations at the State University of New York at Potsdam, called the use of deregulated staffing agencies in the public sector a “money-laundering scheme” that lets governments get around union contracts and civil service rules, permitting the exploitation of the contract workers. “These staffing agencies in the private sector have been encroaching on public-sector work for years,” he said. “It’s part of the privatization project of free-market politicians.”

Gonos contrasted staffing agencies with traditional employment firms, which charge clients a fee to place them in jobs. Staffing firms typically siphon off 30 to 50 percent of the value of their contracts, pocketing money that should be going toward wages and income taxes. Across the country, “the long-term effect of the proliferation of commercial temp and staffing agencies is to depress wages,” Gonos said.

The union advantage

“It’s all about making the most for themselves and paying you as little as possible,” said a Local 372 member who worked several years for a temp agency before the Dept. of Education hired her.

To keep wages down, the worker said, her temp agency ordered employees not to discuss their pay with each other. The worker, who requested anonymity because she did not want to become a topic of discussion at her workplace, said the agency didn’t offer paid holidays or health coverage. She had to put off a major operation until she became a member of Local 372.

“Being in the union is a lot better,” she said, noting that at $16 an hour, her pay is now nearly double what she received from the temp agency. “With a temp agency you are a loner, but with DC 37 I have a feeling of self-worth.”