The city of Mountain View is seeking new ways to protect working class residents and construction workers from getting shortchanged by their employers, launching a pair of ordinances that would crack down on businesses that have failed to pay their employees in full.

Preventing wage theft has been a high priority for the city since 2019, seen as a way to help employees working in Mountain View -- particularly those in the service sector and in the construction industry -- combat unscrupulous businesses that shortchange their staff. Wage theft includes failing to comply with minimum wage laws, taking tips and failing to pay for overtime.

Though state and county laws already prohibit wage theft, city officials are looking to build an extra layer of protection, proposing a new law that requires all businesses operating in Mountain View to provide proof of whether they're bilking their employees. Businesses would be required to file an affidavit stating whether they have any outstanding court orders to pay back employees.

But advocates against wage theft have raised concerns that the affidavits and the threat of further fines won't be enough. At the Oct. 26 City Council meeting, local labor organizers argued that administrative citations would do little to detract illegal behavior, and that the ordinance needs more teeth in order to get law-breaking businesses to pay up.

"In its present form the ordinance is pretty limited in its ability to prevent employers, contractors and subcontractors with unpaid wage theft judgments from further shortchanging their employees," said Krista De La Torre, an organizer with the South Bay Labor Council.

Reports from the Santa Clara County Wage Theft Coalition have cited nearly 26,000 wage theft cases across all industries in the county, affecting tens of thousands of employees and totaling $128.8 million in unpaid wages. Jobs at highest risk for wage theft include retail, construction, restaurants, caregiving and the service industry.

Between 2017 and November 2020, employers in Mountain View filed 101 wage theft claims, about half of which have been settled or a final judgment has been issued, according to city staff.

But for many workers in California, winning a judgment and being awarded unpaid wages is only half the battle. Actually getting the employer to pay up is a significant hurdle, and the Wage Theft Coalition found that only 17% received any payments between 2008 and 2011. Of the $282 million owed statewide over that three year period, only $42 million was paid out.

Santa Clara County, in its own effort to counteract wage theft, launched what it calls the Food Permit Enforcement Program, designed to compel companies in arrears to finally pay up or risk getting shut down. The county has the ability to suspend or revoke a vendor's food health permit in order to push employers into compliance.

Louise Auerhahn, a member of the group Working Partnerships USA, encouraged the city to crack down on the high number of construction companies who are taking advantage of their workers. Many of these workers are immigrants and Latino workers, she said, who are disproportionately harmed by wage theft.

"Wage theft is an alarmingly widespread crime, and construction is one of the main centers where it occurs," Auerhahn said. "The Wage Theft Coalition's recent report found that over 12,000 Santa Clara County construction workers have been victims of wage theft, robbed of over $46 million in wages that they earned -- and that's only the cases that have been documented."

Maria Marroquin, executive director of the Mountain View Day Worker Center, told council members in a letter that day laborers are exposed to the perils of wage theft on a daily basis, and that the nonprofit has assisted victims of wage theft in filing claims for their rightful pay.

Not getting paid has serious ramifications, Marroquin said. These low-wage workers depend on that money for rent, groceries and other bills, and numerous workers who get shortchanged are forced to seek rental assistance to stay housed.

Marroquin raised concerns that the future wage theft protections in Mountain View may have some holes. Though the ordinance is still being drafted, the plan is to impose reporting requirements on construction companies for all commercial and multifamily housing projects above 15,000 square feet. Many of the projects worked on by day laborers are smaller, she said, leaving a segment of the workforce vulnerable to wage theft.

"In the city of Mountain View particularly, small project construction workers and day laborers are at risk of wage theft from unscrupulous employers that take advantage of them," she said.

But there's only so much enforcement activity Mountain View can bear on its own, according to city staff. Just handling the estimated 4,600 affidavits from businesses operating in the city would be a challenge, and the city is quick to admit that each one would not be independently verified. Instead, the city would investigate potentially false attestations based on complaints.

City Council members did not take action on the ordinances at the Oct. 26 study session, instead generally agreeing with the direction of the wage theft protections. Councilwoman Lisa Matichak made a pitch for adding more strength behind the ordinance beyond just an administrative fine, while councilman Lucas Ramirez asked staff to consider whether sole proprietors without employees should be exempt from the new law.

City officials say the ordinance will come before the council for approval some time in 2022.