San Francisco Leverages Health Permits to Combat Wage Theft

Overview

Wage theft is a national epidemic that hurts workers, responsible employers, and the local economy. After learning through participatory research collaborations that wage theft impacts the health of many low-wage and immigrant workers, the San Francisco Department of Public Health, California, leveraged their restaurant health permitting process to hold employers accountable for wages stolen from employees.

Who Took This On

Environmental Health Branch, San Francisco Department of Public Health, CA

Ways You Can Get Started

• Create a 90/10 or 80/20 policy — if staff finish their work in 80–90% of the time, they can use the remaining 10–20% to work on a project that will improve health equity
• Read public health law and leverage existing, unused powers or opportunities that align with your essential public health services (link to a Table of Potential Health Agency Roles to Support Health-Protective Labor Standards)
• Collaborate with worker centers and community organizations to document the prevalence of wage theft among workers and how it impacts their health and well-being
• Build relationships with your City Attorney’s office and state or federal labor enforcement agencies

See Advice for Local Health Departments below for more ways to take action.

What Sparked This?

Informal Staff Policy Enables Staff Action on Health Equity

Recognizing that autonomy is an important component of job satisfaction, the Director of the San Francisco Department of Public Health’s Environmental Health Branch (SFDPH-EHB) worked to create an internal culture enabling staff to pursue their passions independently. He established an informal policy that if a staff person finished all of their assigned work (e.g., inspected 300 restaurants in a year), they could spend up to one day per week moving their own ideas forward about how to improve environmental health.

The Director supported staff by lending organizational authority, resources, and, where possible, funding. For example, one environmental health inspector doing lead inspections stated that she wanted to work with immigrants on occupational safety and health. In her inspections, she saw many day laborers being exposed to lead paint, and she wanted to provide trainings about how to limit their exposure to lead. The Director supported her initiative and secured $5,000 from the EHB equipment budget to do the trainings and purchase protective equipment for the workers. The Inspector worked closely with day laborers and staff from La Raza Centro Legal’s Day Laborer Program to develop and implement the workshops, which later grew to include safe and green cleanings for domestic workers.

Other EHB employees were concerned about air quality, noise, food security, and employment conditions and staff were supported in conducting projects to address these issues as well.  These projects not only increased staff satisfaction and engagement, but also improved environmental health practice.

Over the following years, this collaboration and health impact assessments on minimum wage and paid sick days policies led to various other collaborative grants, research and educational activities and policy advocacy work with day laborer, domestic worker, low wage retail and restaurant worker centers/organizations. For a more detailed description of the initial stages of this work, please see Using Our Voice: Forging a Public Health Practice for Social Justice in Tackling Health Inequities Through Public Health Practice: Theory to Action.  Through this work, various worker centers began to see SFDPH as an ally for workers’ rights and workers’ health.  At the same time, the EHB team became more aware of wage theft and occupational health disparities as health equity issues.

Documenting wage theft and its impacts on health

In particular, staff from the Chinese Progressive Association (CPA), UC Berkeley’s Labor Occupational Health Program (LOHP), and faculty from UC Berkeley School of Public Health approached the SFDPH-EHB Director about working together to document the poor occupational conditions of San Francisco’s Chinatown restaurant workers.  The resulting community-based participatory research collaboration, known as the “CPA Wage Theft Study,” involved CPA staff and worker members, LOHP staff, SFDPH-EHB staff, and UC Berkeley and UC San Francisco faculty and doctoral students.  Supported by the collaborative, CPA members began to document the prevalence of wage theft among low-wage and immigrant Chinese restaurant workers and its subsequent impacts on worker health and well-being — and that of their families — including stress, injuries, mental health, and substance abuse issues. They found that among surveyed Chinese restaurant workers in San Francisco:

• 1 out of 2 workers (50%) receive less than minimum wage
• 1 out of 5 workers (20%) work more than 60 hours a week
• Nearly half (48%) of workers have experienced burn injury
• Only 3% of workers have employer provided health care
• 95% do not receive a living wage

Studies of other immigrant and low wage workers in San Francisco also found high rates of wage theft and poor working conditions.  For example, 90% of SF Bay Area domestic workers did not receive overtime pay (MUA, 2007) and numerous day laborers reported being injured on the job and not being paid at all for work completed nor any medical expenses (Walter, 2002; Valenzuela, 2006).

Community advocates brought agencies together, facilitating interagency collaboration

Armed with compelling statistics and workers’ stories from the participatory research studies and their organizing work, the community organizations and worker centers formed the San Francisco Progressive Worker Alliance to unite young workers, queer workers, and workers of color across race and language differences.

Through their advocacy work, the worker centers facilitated increased communication between SFDPH and the San Francisco Office of Labor Standards Enforcement (OLSE), which was responsible for enforcing San Francisco’s local labor laws related to wages, paid sick days, and employer-required health care contributions. They also subsequently successfully advocated for the creation of a Wage Theft Task Force to “study the issue of wage theft and generate recommendations for how the City can best marshal its resources to tackle wage theft.” Through participation on this Task Force, SFDPH began to develop closer relationships with OLSE, the District Attorney, Office of the Treasurer and Tax Collector, Office of Small Businesses, and others.

Program Description

Researching the health department’s regulatory power

Compelled by the growing evidence and worker stories of wage theft impacting health, SFDPH explored how to use its authority as a city and regulatory agency to promote compliance with existing labor laws. The EHB Director started by reading the California Health and Safety Code to look for language about how his health agency could take action against wage theft. Once he identified specific relevant statements in the code, he sought legal counsel to see whether his interpretation was defensible.

Specifically, the EHB staff sought legal counsel from the City’s Attorney’s Office on the EHB Director’s interpretation of the law. The EHB Director and staff had previously developed relationships with the City Attorney’s Office through ongoing interagency housing and planning code enforcement work. Being housed in the same building had also helped facilitate friendly interactions between staff.

Piloting various approaches

Using their authority, SFDPH-EHB initiated several pilot projects to promote compliance with labor laws:

• Requiring proof of worker compensation for all health permits (see sample documentation form)
• Suspending health permits of businesses failing to pay minimum wage or provide workers’ compensation (see sample Director’s Hearing Order)
• Increasing communication and collaboration with labor law enforcement agencies
• Observing and reporting lack of compliance with labor law posting requirements (this was conducted as part of the CPA Wage Theft Study, see findings from pilot observations)
• Supporting educational outreach to workers and employers (see sample workers’ compensation posting)

“Finding an employer guilty is a lot of work and not our expertise. The beauty of our system is that the labor law experts find the employer guilty, and based upon these experts’ findings, we use the health authority to suspend or revoke permits.”

How it works

SFDPH is not the agency assessing whether or not an employer was guilty of wage theft. Local, state, and/or federal labor enforcement agencies (depending upon which law was broken) are responsible for investigating each reported labor violation, gathering documentation or evidence, and making a formal determination of guilt if applicable and the amount of wages that are to be paid to the employee. SFDPH collaborated with the city attorney’s legal counsel during the prosecution of violators for the test cases. (See a redacted Director’s Hearing Order that illustrates a sample letter threatening permit revocation if the employer does not pay back wages owed.)

Worker centers, legal advocates, and other community groups played a critical public and behind-the-scenes role in this effort. In general, these groups can work with the health department to educate workers about their labor rights (regardless of immigration status), support the workers in filing their case with the enforcement agency, help protect workers from retaliation, and create media and community pressure to pay wages once a finding of guilt is issued. As a result, as noted by an EHB staff member, if there is legal backing, the actual work done by the environmental health agency is minimal. Journal articles by Bhatia et al, 2013, Gaydos et al, 2011, and Minkler et al, 2014 provide greater detail about the participatory research collaborations that resulted in these pilot projects and the potential roles for health departments in supporting local labor law enforcement activities.

Outcomes and Impacts

• Health permits suspended and revoked from employers guilty of wage theft

  Since 2010, SFDPH-EHB has been involved in 22 wage theft cases, including 17 where a notice was issued that they had to come to the Health Department hearing for labor issues. Of these, 2 establishments had their health permits suspended and 4 establishments were permanently closed — the former due solely to labor law issues and the latter because of labor law and extreme food safety violations.

• Business owners more responsive to health department

  Labor enforcement agencies have repeatedly commented on how quickly business owners respond to the health department after evading the labor agency for months. For example, in one case, despite 4 years of hearings and appeals after being found guilty of underpayment of wages, one employer failed to pay the full amount owed to 5 restaurant workers. However, within 4 months of receiving the Director of Health’s orders and threat of health permit suspension, the employer paid the money owed to the workers.

• Businesses acquire workers compensation insurance

  All but 1 of 400 businesses in the initial pilot provided proof of insurance coverage. Prior to SFDPH’s request for proof of coverage, 10% of businesses (40 of the 400) did not have workers’ compensation insurance. While some acquired insurance after the request, 4% did not provide proof of coverage until SFDPH-EHB threatened to suspend their permits. After being compelled to attend public hearings, all businesses except 1 provided proof of insurance coverage.

• Pilot project demonstrates frequency of non-compliance with health and safety laws

  Through the use of a pilot health and safety observational checklist, SFDPH-EHB found that 65% of observed restaurants had not posted required minimum wage, paid sick leave, or workers’ compensation notifications; 82% lacked fully stocked first-aid kits; 52% lacked anti-slip mats; 37% lacked adequate ventilation; and 28% lacked adequate lighting. These findings were used to facilitate additional conversations with restaurant inspectors about how to support creating healthier workplaces.

• Food permit application now includes “declaration of healthy and safe working conditions”

  All facilities applying for a food permit are now required to sign a declaration as part of their application process that affirms the permit holder will uphold specific labor laws and includes the following explicit language: “I acknowledge that failure to comply with all applicable federal, state, and local labor laws may result in suspension or revocation of my Permit To Operate issued by the San Francisco Department of Public Health or a referral to the applicable federal, state, or local agency for enforcement.”

Future Steps

• Leveraging health permits to ensure compliance with labor law is now a routine component of EHB’s work. SFDPH continues to have ongoing and regular communication and collaboration with the local and state offices of labor standards enforcement and low-wage worker centers.
• SFDPH continues to streamline their processes. For example, they now require businesses to declare up front that they have workers’ compensation, will comply with all applicable laws, and understand that they are subject to enforcement activities.

Advice for Local Health Departments

• Start with pilot projects among the willing

  Framing the initial work as a pilot project was helpful for securing staff buy-in to the new approach, which initially appeared far outside EHB’s relevant scope of work. Doing the pilot project with staff who were interested and willing to participate also generated valuable feedback about how much the pilot work impacted other work responsibilities and built non-management allies/advocates for the work.

• Read your existing laws/regulations

  Numerous national, state, and local laws have been passed with the intention of protecting the public’s health and directly or indirectly grant authority to health agencies to support compliance with the health-protective laws. As described above, the California Food Safety Code gives local health departments the authority to revoke health permits if restaurants are not complying with applicable local, state, and federal laws and regulations. Various national and state environmental laws state that analyses are needed to understand the potential impacts of proposed actions on human health. Working with your city attorney or other legal experts, you can explore how to leverage existing authority to improve social determinants of health. For more information, see Bhatia and Wernham, 2009; Bhatia et al 2013; or 2012 HIP/ASU Legal Review.

• Institutionalize internal policies

  Incorporate the new health department policy or program into the department’s scope of work to ensure continuation following leadership changes.

• Leverage interagency and community collaborations to increase efficiency and outreach

  In resource-constrained environments, collaboration between local, state, and federal government agencies, as well as with community-based organizations and the private sector, can facilitate mutually beneficial communication, problem identification, education, enforcement, evaluation, and other activities.

• Request letters for public servant actionIt can be helpful to have clear requests for health department involvement from community organizations or other collaborators. As public servants, the health department is responsible for responding to these public requests. This also helps justify the work if there is a change in leadership or resources. If something is hard for you to do politically, tell community organizations to make the request directly to the Director of your agency or to elected officials who can direct your agency to respond.
• Support an authentic community agendaTo address equity, it’s important to understand what people are struggling with and fighting for in their communities and how that aligns with your goals of advancing health equity. Your work should be guided by the community’s agenda and be transparent and accountable to them. At the same time, be clear about what you can and cannot do as a health department. Provide concrete examples of things the health department could do to support or inform the community’s agenda — e.g., gathering data, conducting focus groups or surveys to elevate community voices, testifying on health impacts, convening various stakeholders and government agencies, etc.