Employment Advisory Committee Meetings
EMPLOYMENT COMMITTEE
MINUTES
September 2, 2004
Members Present
Commissioner Larry Lee, Commissioner Faye Woo Lee, Bridgett Brown, Rodney Hampton, Jerry Jones, Greg Marutani, Judy Starbuck-Sorro, Norma Tecson, Stan Warren, and F. Ross Woodall
Members Absent
Ronnie Rhoe, Guillermo Romero, and Len Vetrone
Staff Present
Linda Chin, Kabir Hypolite, Mary Gin Starkweather, James Fields, and Ed Campos
Guests
Donna Levitt Manager Office of Labor Standards Enforcement
Call to Order/ Roll Call
The meeting was called to order at 1:45p.m. A quorum was present.
Approval of Agenda
Greg Marutani moved to adopt the agenda. Judy Starbuck-Sorro seconded and the motion was carried unanimously with no discussion.
Approval of Minutes
F. Ross Woodall moved to adopt the June 3, 2004 minutes. Greg Marutani seconded and the minutes were unanimously adopted carried as amended.
Commissioner’s Report
Commissioner Larry Lee noted his disappointment that an unspecified staff person objected to his concerns about prevailing wage violations but that he will continue to fight exploitation of workers. Commissioner Faye Woo Lee noted the prevailing wage issue is a serious one in Chinatown because many workers are not fluent in English and have a hard time getting work outside of Chinatown. She also cited a letter from a Chinese female See’s Candies employee who has not received promotions because of her limited English skills despite having seniority with the company. She was told by the Commission Secretary that the matter would be handled by HRC staff and requested a status update in October.
Staff Report
Kabir Hypolite updated the Committee regarding the Superior Court decision in Coral Construction & Schram Construction vs. the City and County of San Francisco. The Court clarified that its earlier ruling only applies to Chapter 12D and not Chapter 12B of the San Francisco Administrative Code.
Mr. Hypolite also updated the Committee on the outcome of the Staff’s comparison report of five San Francisco agency employment program models. In addition, there have been several meetings with the Mayor’s Office, HRC staff and CBO’s representatives. The upshot is that there will be an application of the PUC model program to Department of Public Works. Judy Sorro noted that the report is not finalized yet, but the Director has seen it. Rodney Hampton read the report (Memorandum dated August 30, 2004) prepared by Diana Rathbone into the record with some annotated comments. He noted that the Collaborative has requested that HRC Representative Mary Tramil be transferred to this task because of her experience with job placement on construction jobs. Ms. Sorro expressed confidence that these new arrangements will end the practice of awarding contracts to contractors that repeatedly fail to reach their employment goals. Mr. Hampton said that the Collaborative will continue to meet with Diana Rathbone to finalize this report upon her return in two weeks and he called for all City departments to have an employment model like the PUC model.
Jerry Jones expressed concern that the number of employees needed to staff the DPW project is not in place. Stan Warren inquired about the number of current Contract Compliance Officers there are. Judy Sorro and Stan Warren recommended a simple shifting of Contract Compliance Officers from the former MBE/WBE/LBE program to employment. Greg Marutani there is no definition of progress in the proposal, a goal to achieve, or a method of measuring progress. Commissioner Larry Lee opined that the proposal is a start and that it needs to be fined tuned to create programmatic guidelines. Ms. Sorro cited experiences with the San Francisco Redevelopment Agency as an example of what can be achieved. Ed Campos said he is excited that data entry clerks are included in the proposal. He said he is the only staff person at DPW for all contracts. He created a computer database for employment, but he questioned the accuracy of Ms. Rathbone’s report because there is no Contract Compliance Officer I in place. He said that from the standpoint of data entry his unit has been starved. Currently, the data is 18 months behind. He blamed funding for the problem.
Commissioner Larry Lee said the data is available but the enforcement is never correct. A given contractor who has not previously met the goals will still be given contract after contract. Ed Campos corrected that the names of employees are not entered in his certified payroll database because of privacy, but he can tag gender, diversity, or local residency. Commissioner Larry Lee asked what happens to such a vendor? Mr. Campos says he used to send out enforcement letters but he was ordered not to do so by his boss. He offered no explanation for the order.
James Fields offered a correction regarding certified payrolls. PUC collects certified payrolls weekly from contractors. Richard Norton reviews DPW payrolls. Mr. Fields says these are two exceptions to the departments where HRC collects the monthly workforce tracking forms to determine whether the contractor is in compliance. Most departments have the responsibility for collecting the certified payroll for their contracts. Some have an Office of Labor Standards Enforcement representative who collects the payroll information to determine whether wages and benefits are properly paid.
Jerry Jones asked for clarification regarding Mr. Campos’ example of being ordered not to send an enforcement letter. Mr. Campos clarified that there was one case early in his career during Marivic Bamba’s directorship. He was instructed to change the title. It could not be an enforcement letter. He offered no explanation for the instruction. He gave another example that prevailing wage information can identify diversity issues on the work site.
Ross Woodall suggested that Frank Anderson come to the next Employment Committee meeting to explain why the order not to send enforcement letters was given. Commissioner Lee directed the request to staff.
Finally, Mr. Hypolite updated the Employment Committee on the status Mr. Vernon Jenkin’s employment discrimination complaint raised at its August 30, 2004 meeting. Roel Villacarlos has been unable to contact Mr. Jenkins by phone. On September 1, 2004, Mr. Villacarlos sent a letter to Mr. Jenkins last known address.
New Business
James Fields, Senior Compliance Officer provided an amended report on the joint Mayor’s Office of Community Development / Mayor’s Office of Housing (MOCD/MOH) Village construction project as requested by the Employment Committee at its August 2004 meeting.
Donna Levitt, Manager of Office of Labor Standards Enforcement presented an overview of the OLSE and particularly about prevailing wage on City construction contracts. She applauded the Commission’s efforts to refocus on employment issues. The OLSE was created in October 2000 in section 6.22 and 6.24 of the SF Administrative Code. The mission of the OLSE is to ensure that workers employed on City construction contracts receive the wages they are entitled to and that contractors have a level playing field on which to bid. The City amended the ordinances again to include appeal and complaint procedures. In November 2003, the minimum wage ordinance was passed. Enforcement was done by the Living Wage, Living Health unit that has now been merged with the OLSE. Thus far the OLSE has collected over $1 million in back wages and $325,000 in penalties for the City’s general fund.
Complaints are initiated by personal complaints or by random computer selection. OLSE has found widespread abuses. Prior to the OLSE there was no agency with the task of enforcing prevailing wage issues. The office has a dedicated, experienced staff. Common practices are misclassification of workers who are then paid at a lesser wage scale. Group 4 laborers are clean up laborers that are used at the end of a project. Hour shaving is another common violation where a contractor says that a worker is paid $40 and works 20 hours a week when in reality they work 40 hours and are paid $20.00 an hour (or as low as $8 an hour.) The key is to look beyond the certified payroll and speak to workers on site. Translators are often necessary.
Sometimes contractors who are union contractors say they pay fringe benefits to a trust fund, but when you check the contractor has not made fringe benefits payments for years. Another ploy is to list a worker as an apprentice and the only way to be one is to be registered in a recognized apprenticeship program, but when we call they are not registered and should be paid the prevailing wage at a journey person rate.
Contractors pay by the piece, or sheet of drywall, or a room that’s completed instead of by the hours as required. Sometimes they pay cash for overtime so it’s off the books. Sometimes there are straight out underpayments where the contractor just picks a rate. An extreme case involved a kickback scheme where workers were taken to a bank, signed blank checks and handed cash back to the employer.
OLSE works with City Departments to highlight red flags such as certified payroll undercounts of workers, failure to show overtime where its known to be accrued or misclassification of type of worker performance. OLSE relies upon resident engineers for their experience, on site access and reporting responsibilities.
OLSE is short staffed. Electronic submission of certified payroll records would be very helpful because typically department staff is drowning in payroll records paperwork from primes and subcontractors on all the City projects. Software expenditures would be worth the expense because they pinpoint the violations and even audit back wages owed. This would be the start of a thorough investigation. It would be a significant step to stop violations that fall through the cracks.
Complaints are not about non-union vs. union contractors working on a city job. Nor is it about a disgruntled competitor who lost out on a bid unless there is a huge bid spread that indicates that there is no way they could pay prevailing wages. It must be a person who lost wages or who reviews payroll records and interviewed two workers who said one was getting paid less than required. Or where a worker is getting paid at that wrong classification. Or where one crew is on the books and another is off the books.
OLSE also cooperates with HRC in a variety of ways. For example notifying HRC that a contractor that is listed as a MBE performing work on a site is not actually performing that work. They then follow up. Other examples were noted. Other possibilities for cooperation exist in the Surety Bond Program to include Labor Standards training. Donna Levitt and committee member Norma Tecson also urged that HRC and the OSLE could do some public service announcements as well as a form a joint task force to address the concerns raised by Commissioner Larry Lee about immigrant workers being victimized because of their limited language skills. F. Ross Woodall said that the HRC should be more than just all bark and no bite. Penalties need to match violations. He noted that the fines do not exceed the monetary incentive to cheat workers. Greg Marutani inquired about the method by which a contractor may be debarred. To date, no debarment proceedings have ever been initiated against a contractor to date. Stan Warren commented that the Building Trades Council has been enforcing prevailing wage laws for decades. The issue is like an incomplete puzzle. He said the OLSE is understaffed but is getting the word out and urged further coordination between OLSE and HRC.
Old Business
Mr. Fields presented a revised report of the Village Project. The contract fell under the last of several construction projects for the replacement of the Geneva Towers in Visitacion Valley. It also had a 30% contracting requirement as well as a 30% 94134 resident hiring requirement. The project achieved 20% of the 30% goal on the contract and surpassed the 50% HRC hiring goals. At the request of the committee Mr. Fields added information regarding Spencer Masonry, a local African American owned brick company.
Greg Marutani asked why one contract had no local residents on the job. Mr. Fields noted that they had two Latino male workers who performed all the work on the project according to the workforce reports. Glass installation was done with prefabricated materials. That is typical for this type of work.
Ed Campos updated the committee on the resumption of the goal setting Working Group. Work was temporarily suspended because of the July 26th Court decision in Coral Construction and Schram Construction vs. the City and County of San Francisco. The Court clarified its ruling on August 17, 2004. The purpose of the Working Group is to set the goals for female and ethnic minority participation in the various construction trades. There is no plan to revise the local resident goal of 50%. The goals are revised based on the census report that is released every ten years. The census information provides a basis for determining the availability of different ethnic populations in the specific trades.
Public Comments
None
Announcements
Mr. Hypolite and Ms. Starkweather announced a Citywide Town Hall Meeting Construction Contracting Opportunities about construction contracting opportunities available through the SFO International Airport, SF Community College District, DPW, MUNI, Port of San Francisco, Redevelopment Agency, and the PUC on Monday, September 20, 2004, from 2:00 to 5:00 at the State Building, Milton Marks Conference Center, Lower Level, at 350 McAllister Street or 450 Golden Gate Avenue. Ms. Starkweather noted that CBOs would be able to put out their literature and send a single joint representative to the town hall meeting.
Adjournment
The meeting was adjourned at 3:55p.m.
Next Meeting
Thursday, October 7, 2004
1:30pm to 3:30pm
25 Van Ness Avenue, 8th Floor, San Francisco, 94102