Milpitas Adopts Wage Theft Ordinance

MILPITAS, CA — The Milpitas City Council unanimously approved a wage theft ordinance to protect workers in the Milpitas community against employers who don’t pay earned wages. They took the action at the March 20 meeting.

The ordinance gives the City the authority revoke or suspend the business license of any employer who refuses to pay workers when found in violation of wage or hour laws by a local, state or federal agency.

Without a business license, an employer would effectively not be able to operate in the City of Milpitas.

“This ordinance is the first of its kind because it gives our city the authority to help our workers in every industry in recovering the wages legally owed to them by revoking a violator’s business license,” said Mayor Rich Tran. “Everyone in our community is negatively affected by wage theft, including workers, neighborhoods, responsible businesses, and taxpayers.”

Wage theft is the denial of wages or employee benefits that are rightfully owed to an employee. Wage theft can be failure to pay overtime, minimum wage violations, employee misclassification, illegal deductions in pay, working off the clock, or not being paid at all.

A report by the Santa Clara County Wage Theft Coalition estimates that wage theft deprives Santa Clara County workers of millions of dollars every year.

Milpitas is the first Bay Area city to pass an ordinance that allows the city to revoke the license of any business operating within its jurisdiction for wage or hour law violations.

“Our intention is to get workers paid what they are rightfully owed. We will make every effort to ensure compliance regarding wage theft before we move forward with business license revocation. Our goal is to protect workers, not to punish businesses,” said Vice Mayor Marsha Grilli.

The most common recourse for employees who have suffered wage theft is to file a claim with the State of California Division of Labor Standards Enforcement. Unfortunately, even when employees are awarded a judgment, it can be difficult for them to collect what is owed from their employers. The Santa Clara County Wage Theft Coalition reported that from 2012 to 2013, only one third of owed wages based on judgments were ever paid to workers.

“This policy is about economic justice. It levels the playing field not just for workers, but also for businesses that have been operating at a competitive disadvantage due to those who unfairly use the system,” said Councilmember Anthony Phan.

Employees with unsatisfied final wage theft judgments may notify the Milpitas Economic Development Division at (408)586-3058 for support in working with an employer to pay the judgment.

-Image via City of Milpitas