Complaint from 1 Berkeley worker puts living wage law under scrutiny

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Back when she was working in Berkeley, Chauncy Taylor would sometimes sleep in her car to accommodate the long, late hours her job demanded. After she was laid off and moved to another city, she had to borrow $200 from her sister in Florida one month to help pay rent.

A single mom of three, Taylor said with some extra money, she could fix her brakes or put more food in the freezer for her kids.

“Oh my god,” Taylor said. “I could give you a list of stuff, of things that I could do.”

When Julio Castro, a former co-worker, emailed her last year with news that he had received more than $2,000 from the Department of Labor Standards Enforcement for unpaid wages — and that she might be owed the same — Taylor saw a glimmer of that extra money.

But now, more than a year later, that glimmer is gone. Taylor doesn’t think she’ll ever see that money. And the city of Berkeley — with which the company she worked for contracted — has released a report that states that Castro was, according to city law, not entitled to his settlement in the first place.

The matter of whether Castro or Taylor is due anything from their former employer centers around the Living Wage Ordinance, a Berkeley law stipulating that certain companies contracting with the city must pay their employees at least $15.99 per hour or $13.71 with an added medical benefit equivalent to at least $2.28.

Enacted in 2000, the law is meant to ensure that workers can support their families at or above the poverty level. But in Castro’s case, the city has enforced the law in such a way that some consider contrary to its spirit.

The city’s first complaint

In 2011, Castro began work as a cashier for LAZ Parking, a company that runs parking garages across the United States, including three in Berkeley, and has contracted with the city since 2011. He said he found out about the Living Wage Ordinance while seeking help after not receiving proper rest breaks. Upon the discovery, Castro surmised that his $12.76 wage needed to be supplemented with either an additional $2.12 or an equivalent medical benefit to be in compliance with the ordinance’s requirements at the time.

Castro reported the discrepancy to the city in January 2012. In February that year, he filed a complaint with the Division of Labor Standards Enforcement, which was resolved about a year later. Castro received $2,245.01 in unpaid wages, in addition to $939.24 for denied rest breaks.

Meanwhile, Castro had reached out to city officials, including Councilmember Jesse Arreguin. He said he hoped the city would do something for his co-workers, whom he believed were also owed money.

“Many of those people either don’t know where to file a complaint or are simply afraid to file a complaint,” Castro said.

This February, the city considered increasing its contract with LAZ Parking — Arreguin, though, requested to delay the action until an information report regarding Castro’s case could be issued. The city released the report last month.

Berkeley has a process in place for employees to file complaints against companies that may not be abiding with the ordinance. Other cities with living wage ordinances regularly request payroll information from companies to check for compliance. Incidentally, the Syracuse, New York, auditor has found the LAZ Parking branch there not in compliance in more than one report.

According to the information report, Castro was the first person to file a formal complaint since the Living Wage Ordinance’s inception.

Waiving wages

According to the city’s investigation of the complaint, LAZ Parking made one error in its treatment of Castro and other workers: It gave employees only 11 days of paid time off instead of 12.

The report called the ruling that gave Castro more than $3,000 “contrary to the LWO and incorrect.”

At the crux of the discrepancy was Castro’s decision to waive the medical benefit offered to him by LAZ Parking. Castro did so, he said, because he found a cheaper plan than the one the company offered him. Castro believed that because he did not benefit from the extra $2.12 in medical benefits, that amount should have been added to his wage.

The Division of Labor Standards Enforcement agreed, ruling that the living wage ordinance did not appear to allow companies to let employees waive their medical benefits.

But according to its report, the city debated that issue in 2000 and decided that companies only had to offer insurance — not necessarily provide it or its equivalent in wage. Although the Living Wage Ordinance Web page did not previously indicate this, city staff amended it in June to say that “if an employer pays for health coverage and an employee elects not to receive coverage, the employer is permitted to pay the lower hourly rate.”

According to campus assistant professor of economics Christopher Walters, the city might have made such a distinction to avoid a scenario in which young, healthy individuals waive their medical benefits in order to get a higher hourly rate. Then, only less healthy individuals would be left in the pool of those purchasing insurance, driving up the overall price.

“Not giving people a wage incentive to opt out is a way of trying to encourage people to participate in the health plan,” Walters said.

But Ken Jacobs, chair of the UC Berkeley Labor Center, said he believes the least problematic way to interpret the Living Wage Ordinance would be to require that any employee be compensated with at least $15.99, regardless of whether he or she chooses for a portion to go toward health insurance.

LAZ Parking declined to answer specific questions, but according to company spokesperson Mary Coursey, LAZ is confident with its wage policies after reviewing them with the city.

“As a result of that review, we are confident that we are in compliance with all of the City ordinances that apply to our contract,” Coursey said in an email.

Lingering questions

Castro said he was dismissed from his job in March 2012, about a month before others were laid off when the parking garage where he worked became automated and no longer required cashiers. He alleges that the company dismissed him as retaliation for making a complaint and has brought these claims to the Department of Industrial Relations.

Arreguin, unsatisfied with the city’s report, said he plans on bringing a proposal of changes to the Living Wage Ordinance to the city’s Commission on Labor.

The city’s report did not specifically acknowledge Taylor’s concerns about her wages. Taylor said the company did not offer her health benefits because she worked part time. According to Chakko, the living wage ordinance applies to part-time employees.

Despite being hired as a part-time employee, Taylor said she worked more than 40 hours a week at times. She still wonders whether the company owes her wages but said she does not have the time or knowledge to go through the same complaint process as Castro did.

“I worked seven days straight, like 12 to 16 hours a day with no day off,” Taylor said. “I wanted to work and stay employed just like everybody else.”

Melissa Wen is a news editor. Contact her at [email protected] and follow her on Twitter @melissalwen.