The County of Santa Clara
California

Report
88395

Under advisement from March 14, 2017 (Item No. 17): Direct Administration to develop a pilot program to enforce wage theft violations through Food Facility Permits. (Office of the County Executive)

Information

Department:Office of the County ExecutiveSponsors:
Category:Report

Body

COMMITTEE RECOMMENDATIONS

The Children, Seniors, and Families Committee received this report at its September 13, 2017 meeting.  Supervisor Cortese indicated that he was comfortable with starting with food facility permits, but perhaps later in time, the County could use other authority, for example, through weights and measures, for enforcement beyond food facility permits, following the results of the proposed pilot program.

 

FISCAL IMPLICATIONS

There is no fiscal impact to the General Fund as a result of the recommended action.

 

REASONS FOR RECOMMENDATION

In conjunction with the Administration’s report on a proposed Business License Program for businesses in the unincorporated areas of Santa Clara County (see Legislative File #88317), the Administration is also proposing a pilot program to evaluate the feasibility of encouraging compliance with labor standards and enforce wage and hour laws through the exercise of the County’s authority over Food Facility Permits.

 

Executive Summary

The purpose of this report is to obtain input and direction from the Board of Supervisors on a proposed County pilot program that would, separate and in addition to a business license program, provide the County with another means by which to ensure local compliance with labor standards.  With the CSFC’s consideration of this proposal and Board approval, the Administration would conduct further research and prepare a program proposal for the Board’s consideration in the late fall.

 

Features of a Proposed Pilot Program

As discussed in the linked Legislative File #88317, the Administration is endeavoring to provide options to the Board of Supervisors for the enforcement of labor standards, including wage and hour laws, using a proposed business license program.  A business license would only apply to businesses located in the unincorporated areas of the county.

 

The Department of Environmental Health (DEH) issues permits to approximately 10,000 restaurants and other food facilities throughout Santa Clara County, and may require adherence to local and state laws as a condition of these permits.

 

The proposed pilot program would entail providing access to the Office of Countywide Contracting Management’s database of California Department of Labor Standards Enforcement and Federal Department of Labor case files on hearing decisions to a proposed County Office of Labor Standards Enforcement (OLSE).  In a separate report to the Board of Supervisors, the Office of the County Executive is presenting analysis about establishing an office of labor standards enforcement at the County of Santa Clara.  The Office of the County Executive anticipates presenting a report to the full Board on October 17, 2017.

 

If the County OLSE became aware of a judgment against a relevant business, OLSE staff would work with the business to resolve the judgment through appropriate means.  If administrative efforts to remedy the violation have been exhausted, and the violation against the business remains outstanding, then the County may issue a notice to the business owner of the County’s intention to revoke or suspend the business’s County-issued Food Facility Permit.  Suspension of the permit would require the business to close and to refrain from conducting any food-related business.

 

The proposed program would not affect the existing rights of business owners to due process in relation to any adverse action taken by the County.

 

Next Steps

With approval by the Board to further develop a pilot program, the Administration would further engage DEH staff and Counsel in the preparation of a fully considered pilot program proposal, which would set forth the roles and responsibilities of stakeholder departments (OLSE, OCCM, DEH, CEO) as well as the enforcement process for affected business owners. 

 

 

CHILD IMPACT

The recommended action will have no/neutral impact on children and youth.

 

SENIOR IMPACT

The recommended action will have no/neutral impact on seniors.

 

SUSTAINABILITY IMPLICATIONS

The recommended action will have no/neutral sustainability implications.

 

BACKGROUND

At the November 4, 2014 Board meeting, the Board adopted a resolution amending Board Policy Manual section 5.5.5.4 relating to mandatory policy provisions in County contracts, adding an explicit Wage Theft Prevention Policy.

 

On February 8, 2017, CSFC received a report on pay equity.  CSFC requested that the Administration and County Counsel return within 90 days with a draft ordinance on a proposed business license that would be used for enforcement when businesses in the unincorporated areas do not comply with pay equity and wage theft prevention laws. 

 

At the March 14, 2017 Board meeting, the Board approved revisions to nondiscrimination and wage theft language in County contracts, and directed the Administration and County Counsel to report-back on a proposed ordinance on a business license requirement and/or other use of the County’s regulatory authority to ensure that businesses in the unincorporated areas comply with laws on pay equity and wage theft prevention.

 

Wage theft occurs when an employer fails to pay its workers the full wages or benefits they are owed.   This includes:

 

(1)              paying workers less than the minimum wage or agreed-upon wage,

(2)              requiring employees to record fewer hours on their timesheets than they actually worked,

(3)              failing to pay overtime,

(4)               misclassifying employees to evade overtime requirements,

(5)               denying workers required meal and rest breaks,

(6)               stealing tips,

(7)               deducting “fees” from wages owed, or

(8)               not paying workers at all.

 

These practices are illegal under state and federal law, but they occur nonetheless.

 

According to data reported by the Santa Clara County Wage Theft Coalition in 2014, food service workers account for 15% of employment clinic clients seeking assistance for pay-related violations, the highest number of any single industry[1].  Workers in Santa Clara County file the highest number of claims in the state, and the State Labor Commissioner awards an average $1,000 more per worker than the statewide average.

 

 


[1] Santa Clara County Wage Theft Report, Gleeson, et al., Santa Clara County Wage Theft Coalition, 2014

Meeting History

Oct 3, 2017 9:30 AM Video Board of Supervisors Regular Meeting

Held to October 17, 2017 at the request of Supervisor Chavez.

At the request of Vice President Simitian, the Board directed Administration to provide information relating to the structure of the proposed pilot program to enforce wage theft violations through food facility permits; and, the nature and extent of the wage theft problem in the restaurant industry in Santa Clara County.

RESULT:HELD [UNANIMOUS]Next: 10/17/2017 9:30 AM
MOVER:Cindy Chavez, Supervisor
SECONDER:Ken Yeager, Supervisor
AYES:Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian