13 workers first to file complaint under new wage theft law

For three years Erik Lopez and his three brothers say they each often worked 80-hour weeks, building highway ramps and trash landfills for city projects.

Yet they say their employer refused to pay them overtime. Nor did the company provide tax forms, such as a W-2, instead giving them cash or personal checks so the brothers couldn't pay their taxes - and stayed off the company's books.

"(My boss) would tell me it didn't really suit him to pay me overtime," said Lopez, 30, a native of Guerrero state in Mexico, who came to Houston 14 years ago seeking work. "I worked all the time, but we struggled paying our bills."

It was not until he heard about Houston's wage theft ordinance, passed last November, that he realized he had some recourse. With the assistance of the nonprofit Faith and Justice Worker Center, Lopez and 12 others on Tuesday became the first to file a complaint under that law, saying they're collectively owed more than $200,000 in unpaid wages for work performed for sub-contractors on city-funded sites.

Ed Bradley, listed as president for Lopez's employer, Bradley Demolition and Construction, did not return calls seeking comment.

The ordinance, weakened significantly from its original form last summer after protest from trade groups, aims to prevent companies from stealing workers' wages and ensure the city doesn't hire those that do.

In the Houston area, about 100 wage theft complaints are filed to the U.S. Department of Labor every day, representing "just a small sliver" of the problem,said Laura Perez-Boston, executive director of the Faith and Justice Worker Center. About $750 million in local wages are lost annually to the practice, according to the center.

Under the ordinance, the city's inspector general investigates the claims and tries to resolve matters directly with employers.

If people or firms assessed civil penalties and judgements related to wage theft refuse to pay or are criminally convicted, they are barred from working for the city. They also appear in a public database on the city's website.

Any person or firm criminally convicted of wage theft is prohibited from renewing 46 types of city permits and licenses for five years, effectively banning working in Houston. Officials say such convictions are rare but act as a deterrent.

"We want to make sure that the money that is invested in public projects goes into the hands of the working people doing those projects," Perez-Boston said.

Afraid to complain

Yet workers most affected by rogue employers are often those too afraid to complain. Jose Santa Cruz, a 33-year-old father of two from Michoacán, Mexico, said his employer didn't provide safety equipment and threatened to call Immigration and Customs Enforcement if his workers reported violations.

Finally, when the boss said he might stick employees with the bill for broken heavy machinery, Santa Cruz just didn't come back.

Now he said his employer owes him more than $900 in wages and he's yet to find steady work. "I'm counting on some friends to pay the bills," he said.

About half of all construction workers in Texas are foreign-born, many of them lacking work authorization, according to a 2013 survey led by the Workers Defense Project.

Researchers found more than 20 percent of Texas workers say they were denied payment for their construction work and 50 percent reported not being paid overtime.

'Very common practice'

At least 4 in 10 were paid in cash or personal check or falsely classified as independent contractors to keep them off payrolls. That is a "very common practice" to avoid paying taxes, overtime and workers compensation, said Stan Marek, CEO of Marek Companies, a large Texas construction company.

Employers also fear they'll face immigration penalties for putting undocumented workers on their payroll, he said.

Daryl Bailey, a lawyer at the Houston branch of Gray Reed & McGraw, said workers who are employees rather than independent contractors generally are expected to be at a job at set hours and are not usually able to work for someone else. They can be asked to work more than 40 hours a week and typically use company tools and equipment rather than providing their own.

Lopez, the father of three children, said his lost pay adds up to around $40,000, a giant financial blow.

The injustice of it gnawed on him for years.

"I always wanted to do something about it, because it's not right," he said. "But I was afraid."