June 11, 2015

Wage Theft Victims Face Daunting Task When Filing Iowa Claim

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Haley Hansel/Special to IowaWatch

Katie Wilson outside the Coralville Applebee's where she won a wage theft claim. Photo taken April 27, 2015.

Haley Hansel/Special to IowaWatch

Katie Wilson outside the Coralville Applebee’s from which she won a wage theft claim. Photo taken April 27, 2015.

With dishes in hand, Katie Wilson, 27, headed into the Applebee’s kitchen in Coralville as her shift drew to a close.

The Ames native said she leaned over the sink and began her nightly routine of washing the plates when she heard something that her managers said she wasn’t supposed to hear.

They were discussing taking tips from the other employees, Wilson recalled.

“It was very bizarre,” said Wilson, a University of Iowa graduate with majors in English and theater arts. She had worked for Applebee’s six years.

“I didn’t expect to hear a topical conversation about it. I confronted them and was told that I wasn’t supposed to hear that.”

Sen. Tony Bisignano, D-Des Moines

Sen. Tony Bisignano, D-Des Moines

Earlier this year, she and a co-worker traveled to Des Moines to support wage reform legislation. They spoke at a news conference hosted by state Sen. Tony Bisignano, D-Des Moines, co-sponsor of the reform bill, which passed the Senate but stalled in the House during the Iowa legislative session that ended this month.

They claimed that management was taking some of their tip money from a tip pool that was set up to share with co-workers.

With Bisignano and bill co-sponsor, Sen. William Dotzler, D-Waterloo, standing nearby, Wilson said she made $4.35 an hour, which is well under the state’s minimum wage, and depended on tips to supplement the hourly wage. She said management rejected their request for a meeting to discuss a change in the policy and repayment of the tip money.

The tip pool was supposed to be shared with bar tenders, hosts and bus boys, but management was taking money from that pool when those workers were not on duty to share it with, she said in a later audio recording with University of Iowa student journalist Rani Simawe.

In an IowaWatch interview recently, Wilson said she discovered the wage practices at the Coralville location in September 2014.

After overhearing the manager’s conversation, she spent the subsequent month searching for what to do and came across the Center for Worker Justice of Eastern Iowa. Before approaching the center, Wilson knew nothing about Iowa’s enforcement policies or the process of filing a wage claim through the Iowa Workforce Development.

In Iowa, filing a wage claim is a long process handled by the wage payment collection and minimum wage staff in the Iowa Workforce Development’s Division of Labor. The staff that processes these claims consists of one full-time wage investigator and an executive officer who splits her time between two departments.

Wilson didn’t file a claim and instead reached out to Misty Rebik, executive director of the Center for Worker Justice of Eastern Iowa and contributor to a 2012 Iowa Policy Project wage theft report.

Money and resources limit the center, which forces it to be strategic when deciding which cases to allocate time to. The center took on the campaign because Wilson’s case affected more than one or two people and is prevalent within many cash-based businesses – not just Applebee’s.

“I went to Misty when I had two weeks left, and that really was because I wanted to keep track of what I was losing,” Wilson said. “I wanted to have a few weeks’ worth of notes, and I didn’t really want to give my hand away and quit.”

The duo hand-delivered the letter to management and insisting on the meeting to change company policy. Along with this, they filed a complaint with the federal Department of Labor.

“We used the DOL as a poke in the thigh as a way to show (Applebee’s) that we are still working on this,” Wilson said.

The Center for Worker Justice said it uses direct action in many of its cases, because community pressure is often more effective than solely filing a wage claim through Iowa’s Division of Labor.

“The only chance that workers have is using community pressure,” Rebik said. “At least the community can gain publicity and fight for you.”

MULTIPLE STEPS REQUIRED
IN WAGE CLAIM FILINGS

Filing a wage claim in Iowa is an 11-step process that can start to break down at different steps, said Jennifer Sherer, director of the University of Iowa Labor Center.

Three steps in the process exist where a case will be closed if the employee does not respond within 14 days.

WageTheftClaims“Employees fall out of the system during these various escape hatches along the way,” Sherer said. “Maybe because they want to drop it themselves, but I think often it is because of logistical gaps.”

For example, workers often relocate when they start losing wages, Sherer said. They don’t get the letter and cannot reply.

The wage claim process also states that the burden of proof rests with the employee. If it is simply the employee’s word versus the employer’s, the investigation will be closed. “There is not a process to subpoena documents or anything like that,” Sherer said.

“That being said, documentation can include somebody trying to just write down what the hours were. And that sometimes has served as good documentation. But of course a huge part of the process that is a huge barrier for people is just knowing how to navigate it and gather evidence for themselves.”

Iowa’s Labor Services Division reported 651 wage claims filed in 2014.

Karen Pfab, executive officer of Iowa’s wage payment and minimum wage department, said employees sometimes file claims when they don’t understand the law or employment policies. They feel they are owed money when maybe they are not.

The step-by-step process for filing a state claims notes many of its own limitations. The process states that:

  • The wage claim process is not speedy and can take several months to reach resolution;
  • Gaining a judgment does not guarantee payment of your claim. The wages must still be collected. Often, this is not possible.

So even winning the claim cannot guarantee employees will get their wages, Sherer said.

Many people have difficulty reconciling this truth.

“One thing that a client of mine always said, which I thought was really powerful, was that if I owe the state they will take my license away. So how is it possible that companies can owe wages and just continue business as usual?” Rebik said. “You can be a worker and have your wages stolen and nothing happens, but if you steal a gallon of milk then you get arrested.”

Limited enforcement on the state level causes time and resource limitations, Sherer said.

Pfab said having more employees could help with enforcement and outreach education.

WILSON’S CLAIM WITH APPLEBEE’S SETTLED

As for the disposition of Wilson’s claim, Applebee’s repaid her a small amount of money but it and Wilson give different versions of how the government resolved her complaint.

Wilson and Rebik said the U.S. Department of Labor investigation determined that the complaint was correct. But, Mackenzi Miller, a manager at the Coralville location, said the location was found “with nothing wrong” and that “they passed with flying colors” on everything the labor board sought.

Molly Mulholland, who works for the Department of Labor’s wage and hour investigations unit in Cedar Rapids, said she could not discuss the case and referred IowaWatch to her supervisor, who did not respond to repeated requests for an interview.

Nevertheless, Applebee’s agreed in a letter to Wilson that employees were owed money from a tip pool, but said it follows guidelines under the federal Fair Labor Standards Act. Wilson provided IowaWatch with a copy of the letter. It said the restaurant acknowledged employees were owed $78 for three morning shifts in September 2014, with Wilson’s share being $14.12.

Wilson said people should not underestimate the value of tips and the importance of server jobs.

“There are people who make these jobs their careers,” Wilson said. “There was a man I worked with at Applebee’s that had worked there for years. People don’t think that these are people who are trying to take care of their family.

“…Something that people don’t think about is that there is a real feeling of helplessness. I trusted my employers that they were supposed to be doing the right thing and they weren’t.”

This IowaWatch story was published by The Gazette (Cedar Rapids, IA) and Butler County Tribune-Journal under IowaWatch’s mission of sharing stories with media partners.

To learn how IowaWatch’s nonprofit journalism is funded and how you can support it, go to this link.

ABOUT THE AUTHOR: HALEY HANSEL ORIGINALLY WROTE THIS STORY FOR A UNIVERSITY OF IOWA SCHOOL OF JOURNALISM AND MASS COMMUNICATION CLASS TAUGHT BY IOWAWATCH CO-FOUNDER STEPHEN BERRY.

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