Alderman proposes Chicago Office of Labor Standards

Five months ago, Inspector General Joe Ferguson accused Mayor Rahm Emanuel of falling down on the job of enforcing Chicago’s minimum wage law, allowing three sub-contractors to underpay their employees by $291,816 over a three-year period.

Now, a coalition of aldermen and workers’ advocates want to take action to close that enforcement gap by creating a $1.5 million-a-year Chicago Office of Labor Standards.

Retiring Ald. Ameya Pawar (47th) will introduce the ordinance at Wednesday’s City Council meeting with support from 21 aldermen and Arise Chicago.

The new office would be charged with policing three ordinances approved over the last five years aimed at confronting income inequality in Chicago.

They are: the anti-wage theft ordinance of 2013; the 2014 ordinance that raised Chicago’s minimum wage to $13-an-hour by 2019 and the ordinance mandating companies large and small — with the exception of construction companies – to provide their employees with at least five paid sick days each year.

“We passed a lot of progressive legislation. The city has taken tremendous steps to address labor policies, inequities and income inequality by making sure that hourly workers, low-income workers have access to the same dignities as people with suits. But now, we need to enforce that,” Pawar said.

“This office creates the enforcement mechanism and provides the resources to do all of that…If we do this right, it’ll generate fines and off-set the hard costs. This isn’t an issue where we need to grow this office. In fact, over time, if you get to a point where everyone is complying, you’re reducing costs.”

Currently, responsibility for enforcing the three ordinances is, as Pawar put it, “scattered around” between the city Departments of Law, Business Affairs and Consumer Protection and Procurement Services.

“We’re not adding any new powers. What we want to do is hire more inspectors and put all of the resources under one director within the Department of Business Affairs and Consumer Protection so we can streamline the enforcement of wage theft, the minimum wage and paid sick leave,” he said.

The aldermen pegged the start-up cost at $1.5 million, but he said, “A lot of that can be off-set by the fines that people would pay to correct violations.”

Pawar acknowledged that City Hall is in the process of adjudicating a host of complaints that have been filed against companies accused of thumbing their noses at the three mandates.

But the new ordinance would help that along by empowering the city to join forces with community groups that assist “vulnerable populations where language and immigration status” might be a barrier or where workers are “fearful of retaliation,” the alderman said.

“It’s not just reacting to complaints. It has the ability to inspect businesses in the same way we inspect homes and businesses for safety and public health violations,” he said.

Last fall, Ferguson urged Chief Procurement Officer Jamie Rhee to move aggressively to “promote compliance” to prevent even more contractors from thumbing their noses at the minimum wage mandates.

He suggested sending annual wage increase announcements and requiring contractors to submit “annual certification of wage rate compliance” for themselves and their subs.

On Tuesday, Pawar pointed to the ordinance approved last fall that guaranteed nearly 8,000 other contract employees at O’Hare and Midway Airports a pay floor of “no less than” $13.45-an-hour and secured their right to join unions.

“A robust enforcement mechanism will make sure that, if those workers at O’Hare don’t unionize, that we have the power now to initiate investigations and make sure we protect workers from retaliation,” he said.

Organized labor’s City Council allies and unions seeking to represent airport workers have held a series of O’Hare protests to press their pay demands and claim $1.2 million in “wage theft” from hundreds of airport employees.

The alleged “theft” by private contractors includes everything from failing to make up the difference for tipped employees whose gratuities leave them short of the city’s minimum wage to failing to pay employees who work through their lunch breaks and before and after their regular shifts.

United Maintenance Co. Inc., a clout-heavy janitorial contractor nearing the end of a five-year O’Hare deal, has lent credence to the wage theft claims by agreeing to shell out nearly $850,000 to settle a federal wage-theft lawsuit brought by its O’Hare employees.