Business & Economy

LA County supervisors approve plan to patrol wage theft

L.A. County Supervisor Hilda Solis, photographed while serving as U.S. Secretary of Labor.
L.A. County Supervisor Hilda Solis, photographed while serving as U.S. Secretary of Labor.
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The Los Angeles County Board of Supervisors voted Tuesday to begin establishing a program to ensure businesses in the county’s unincorporated areas pay workers properly.

By a 4-1 vote, the Supervisors approved a motion by Supervisors Hilda Solis and Mark Ridley Thomas. The motion instructs L.A. County’s attorneys to draft an ordinance against what’s known as “wage theft.” It also instructs the county’s CEO to begin funding a staff charged with investigating and resolving wage theft claims, as well as educating workers and employers on the county’s wage rules.
 
In July, Los Angeles County Supervisors voted to raise the minimum wage in the unincorporated areas to $15 per hour by 2020 bringing the county in line with the same gradual schedule as the city of Los Angeles. 
 
The county’s new “Wage Enforcement Program” will begin in the current fiscal year with a staff of five overseen by the Department of Consumer and Business Affairs. Next fiscal year (2016-17), an additional six positions are planned at a total cost of nearly $1.5 million for that year.
 
Supervisor Hilda Solis called the vote a big historical step. “Where we see the most egregious violations is in immigrant communities, and this [program] will be a very important asset as we move forward,” Solis told her colleagues.
 
Supervisor Mike Antonovich voted against the motion. He questioned whether the new program would duplicate state efforts to patrol wage theft and the financial wisdom of taking $1.5 million out of the county’s general fund. “Foster children, public safety, parks and recreation and other vital services would be a better investment than taking money from those programs to support this program,” he said.  
 
The motion from Supervisors Solis and Ridley-thomas also calls on county’s staff to report back on business licensing in the county’s 88 municipalities and the feasibility of requiring all businesses in the unincorporated areas to obtain a license.

County staff estimates there are 15,000 businesses operating in the unincorporated areas, but only a third of those hold business licenses. The county's current rules only require a license of businesses that have a health or safety component, according to a report from county counsel's office. For example, restaurants and auto body repair shops must get a license, while new car dealerships do not. 

The report says that requiring all businesses to register with the county could "provide the County with basic information regarding unincorporated area businesses, such as type, number of employees, and location, and also make the County aware of the business activities for wage compliance purposes." 

Brian Stiger, director of the county's Department of Consumer and Business Affairs, said expanding the license requirement to all businesses would be a "helpful step" in combating wage theft. "For us as regulators, I think it’s important for us to know where everybody is and who’s operating these businesses,” said Stiger, whose department will oversee the county's wage enforcement efforts.   

Stiger added that the potential for revoking a company's license has been a powerful tool in enforcing county regulations. "If the county took an action against a restaurant’s license, then the restaurant would not be able to operate until it came back into compliance with the law," he explained.  

L.A. County Supervisors Hilda Solis and Mark Ridley-Thomas are recommending county staff draft a wage enforcement ordinance.  Solis said it will be important for all businesses in the unincorporated areas to get a county license.  "I just can't understand why it isn't happening now," Solis told KPCC. "It doesn't make sense in this day and age when you want to have more transparency and accountability."

Solis said more than a compliance tool, the businesses license is also a way for the county to communicate with businesses as the minimum wage rises.  "Not just to be coercing people, but to actually give them information to help empower them, especially a lot of the mom-and-pop businesses," she said.   

This story has been updated.