.The Failure of Berkeley’s Living Wage Law

The company that manages three public parking garages has underpaid its employees — and city officials, who have known about this for at least a year, have done little about it.

In June 2000, the Berkeley City Council enacted a living wage ordinance to ensure that businesses that have contracts with the city “pay their employees a wage that can support a family at, or above, the poverty level.” Currently, that living wage is $13.34 per hour in addition to a medical benefit equivalent to at least $2.22 per hour. If a city contractor is not providing health benefits to its employees, then it must pay an hourly wage of at least $15.56.

But what do city officials do when they discover a company is violating the ordinance by paying employees below the living wage? In Berkeley, it turns out, not a whole lot.

Such was the case with LAZ Parking, a private company that manages three city-owned garages and has on multiple occasions underpaid its employees, according to records from the state labor commissioner’s office obtained by the Express. In the case of Julio Castro, a former LAZ Parking cashier in Berkeley, the company not only paid him below the living wage in direct violation of Berkeley’s ordinance, but his supervisors also failed to give him proper rest breaks, according to a 2013 ruling from the state; a judge ultimately ordered LAZ to pay Castro $3,456.43 in back wages. Castro received the payment last spring, nearly a full year after LAZ terminated him, allegedly in retaliation for speaking out about the wage violations in the first place. (His allegations of unjust termination are outlined in a different complaint, which, more than two years after his termination, is still pending.)

When Castro was hired in July 2011, the hourly living wage rate in Berkeley was $12.76 plus a medical benefit of $2.12, meaning companies contracted by the city had to pay a minimum hourly salary of $14.88 to employees not receiving benefits. Castro, as his complaint explained, did not receive health benefits from LAZ. But he was not getting the additional $2.12 per hour he was owed. With a salary of $12.76 per hour without benefits, Castro eventually realized, after doing some basic research on Berkeley’s living wage policy, that LAZ was required to pay him more.

“It was obvious. The judge saw that I was paying insurance out of my own pocket,” Castro, a sixty-year-old Concord resident, said in an interview. Castro had received help in his case from the Legal Aid Society-Employment Law Center. “There was no reason the employer kept the difference in wages,” Castro added. “And the judge ruled that the employer had abused and manipulated the living wage ordinance.”

But for the two years after Castro filed his formal complaint with the state, he had a difficult time getting any City of Berkeley official to take meaningful action. Castro said that since early 2012, he has communicated with numerous city officials about the violations, including the senior buyer and contract administrator in the finance department as well as the city’s parking services manager. In addition to getting help in his own case, Castro said he wanted city officials to do a more thorough investigation of the company to help identify other employees who appeared to be falling victim to the same rip-off. But those city officials did little to aid him in his own fight and did not seem interested in scrutinizing the company’s broader labor policies — even after the judge ruled that LAZ had violated Berkeley’s living wage law, he said.

“The employer has, for lack of a better word, stolen wages from all of these employees and the city knows what this employer has done,” Castro said. “If the city has this living wage ordinance, who is responsible for making sure employees get the wages they have a right to?” He added of their apparent inaction, “What it tells me is the city is condoning what this employer has done.”

For two years, Castro has also communicated extensively with the office of Berkeley City Councilmember Jesse Arreguín about his concerns, which also got him nowhere, he said. According to Arreguín and his chief of staff Anthony Sanchez, that’s because city officials have been very slow — and generally negligent — in their response to these obvious violations.

“We have an obligation to enforce the law and to make sure people are being paid fairly,” Arreguín said. “We have a living wage ordinance for a reason.”

The Express obtained numerous emails between Arreguín’s office and Berkeley City Manager Christine Daniel that indicate that as early as spring of 2013, Daniel was aware of allegations of living wage violations by LAZ involving another former employee of the company. Daniel told his office that “staff would look into this,” Arreguín said in an interview, “and nothing ever happened.”

Though the wage violations by LAZ are newsworthy on their own, it is the city’s lack of a clear enforcement mechanism for its own living wage ordinance that is especially alarming to Castro and workers’ rights advocates in the Bay Area. It is of particular concern due to the fact that LAZ’s violations against Castro seemed to reflect a broader policy of withholding the $2.12 per hour from employees not receiving health benefits.

“At least two employees and maybe more were cheated out of the wages they should’ve been paid from the company,” said Arreguín. “It’s alarming and it suggests a certain pattern.”

His office has also been in contact with Chauncy Taylor, another former LAZ Berkeley employee who said she was denied wages in the same manner as Castro. Unlike Castro, however, she did not file a formal complaint with the state, and as a result has not received any of the money she said she is owed. In an interview, Taylor, a single mother of three who left LAZ in the summer of 2012, estimated that the company owes her several thousands of dollars in unpaid wages.

“We were ignorant to the rules and regulations,” said Taylor, who moved from San Leandro to Sacramento in 2012 because the cost of living in the Bay Area was too high. “When you need a job, you don’t ask questions. You keep your mouth shut and you do your job. … The only person who spoke out was Julio and we just stayed quiet. We were petrified.”

Carole Vigne, the Employment Law Center staff attorney who represented Castro, said it was difficult to get information from Berkeley about the city’s process of addressing alleged living wage violations: “There was not an office of oversight, for example, that seemed to be interested in investigating and enforcing Mr. Castro’s claims.”

The only reason that this debate is coming to light now is that in February of this year, the city brought forward a proposal to expand its contract with LAZ Parking, which prompted Arreguín’s office to once again raise questions about the company’s wage violations. As a result, the council did not approve the proposed contract increase of $430,931 and instead voted to put the discussion on hold. City officials have said they are now investigating LAZ, according to Arreguín, who questions why the process has taken so long.

Matthai Chakko, spokesperson for the City of Berkeley and assistant to the city manager, said city staffers will eventually present a report to the council, detailing the results of their investigation. He declined to comment further. LAZ officials did not respond to multiple requests for comment.

Under Berkeley’s living wage law, LAZ also violated its parking concession contract with the city when it failed to pay its employees the proper wage. Berkeley law also allows the city to levy sanctions against LAZ for its violations.

A living wage ordinance is most effective when municipalities have a system in place to launch broader investigations of companies accused of violations, said Vigne, Castro’s attorney. That’s crucial considering that most low-wage workers don’t have the resources to pursue legal action. “It’s unfortunate if all of [Castro’s] actions have only resulted in his violations being remedied and not the entire workplace.”

The situation is especially problematic given that LAZ’s alleged failure to comply with the living wage ordinance was not the company’s only illegal labor practice in Berkeley, according to Castro’s complaint. Castro alleged that LAZ regularly denied him rest breaks, and a judge agreed, writing that Castro “presented credible evidence that he was not permitted a ten minute net rest break from July 28, 2011 to March 1, 2012. During that time, Plaintiff was confined to a small parking-lot booth and could not leave the cash register … and did not have a true opportunity to take rest breaks.”

Further, Castro isn’t the only employee to file a formal complaint against LAZ in California. Peter Melton, a spokesperson for the labor commissioner’s office, provided records for two wage claims in San Diego, one in Los Angeles, and one in Oakland.

Ultimately, a failed living wage ordinance can really hurt the workers it is supposed to protect, Castro said. Castro now works as a valet shuttle driver in Walnut Creek and only makes $9 an hour. “It’s really heartbreaking. I’m sixty years old …. Do you know how hard it is to find a job?”

Taylor, too, said the additional wages would have made a difference for her family when she was living in the East Bay — and would still be a huge help today.

“I’m check to check,” she said. “I have to feed three kids. It just would be nice to be able to completely fill the refrigerator.” Taylor said she does not have the time or resources to pursue a legal complaint even though it’s clear she is owed thousands of dollars. At this point, she said, she is still hoping that LAZ will pay her what she deserves — and that the city will hold the company accountable. “You just kind of hope that your employers and superiors do what’s right.”

Correction: The original version of this story stated that, according to Berkeley city spokesperson Matthai Chakko, city staffers planned to bring their report, detailing the results of their investigation into LAZ Parking, to the city council on May 6. Chakko has since corrected his comment, saying that a date has not yet been set for when the report will be completed.


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