Comparison Study Final Oct 24_ 2011

							                A COMPARATIVE STUDY

                             OF THE



Wage Theft Project of the Legal Aid Society of Palm Beach County


                            WITH THE



                  Wage Theft Program of the
Department of Small Business Development of Miami Dade County
         as established by the Wage Theft Ordinance



                            Submitted by



                     The Wage Theft Committee
     of P.E.A.C.E. (People Engaged in Active Community Efforts)

                           Jan Booher M.S.
                         John DMello Ph. D.

                            Oct 25, 2011
                  TABLE OF CONTENTS



PURPOSE OF THE PAPER                    3


BACKGROUND OF THE STUDY                 3


APPROACH OF THE TWO COUNTIES            4


A DESCRIPTION OF THE PROCESSES          4


TIME PERIOD COVERED BY THE DATA         5


KEY FINDINGS                          5 -8


CONCLUSION                            9-10




                                             2
PURPOSE OF THE PAPER

The purpose of this paper is to present a comparison of the way wage theft cases
are being handled in two Counties: Miami Dade and Palm Beach. The data for
Palm Beach County was provided by the Legal Aid Society of Palm Beach County
(henceforth called LAS), while the data for Miami Dade County was provided by
the Department of Small Business Development of Miami Dade County
(henceforth termed SBD).



BACKGROUND OF THE STUDY

For a couple of years now in South Florida there have been serious concerns about
wage theft. These are:

      1. That Wage Theft is a wide spread problem…..(see Wage Theft in Florida,
      Cynthia Hernandez, Research Institute on Social and Economic Policy, 2010)

      2. Many wage theft cases do not fall under the purview of the Department of
      Labor or the State Attorney, or other governmental offices. Hence, most
      wage theft cases are forced to go through a civil process in the court system.

      3. The civil process requires many months of involvement on the part of
      victims, and is relatively expensive for them given that the vast majority of
      them are people who struggle for a living.

      4. Many of the claims are for amounts of money that do not justify the court
      fees, time, or transportation expenses required by the victims to see the civil
      process through to its conclusion.

      5. Hence wage theft continues to be an „open wound‟ in our economic
      system.




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THE APPROACH OF THE TWO COUNTIES:

In Miami Dade County, due to the efforts of the Florida Wage Theft Task Force
(WTTF) and with the help of County Commissioners, a Wage Theft Ordinance
was signed into law on Feb 2, 2010 and became effective on Feb 28, 2010.

In Palm Beach County, due to the efforts of PEACE (People Engaged in Active
Community Efforts), County Commissioners directed staff to draft an Ordinance
against Wage Theft for a first reading. While the Ordinance passed its first reading,
the draft had no teeth. Its public hearing was postponed until June 2011, but then
due to objections from a section of the Business Community, it was further
postponed until March of 2012. In its place, the Legal Aid Society of Palm Beach
County (LAS) was asked to handle wage theft cases as a kind of Pilot Project.

A DESCRIPTION OF THE PROCESSES

The first two phases of the process used by both LAS of Palm Beach County and
SBD of Miami Dade are almost similar, while the third phase is vastly different.
These can be described as follows:

      1. Intake Phase: Wage theft cases are screened to determine if the client has
      a case that comes under the category of Wage Theft. Unsubstantiated cases
      are eliminated, and the few cases that can be more appropriately addressed
      by other governmental institutions are referred to those offices. Retained
      clients proceed to the next phase of the process.

      2. Conciliation Phase: A letter is sent to the employer in an attempt to
      recover funds. If the employer responds, the claim is settled in this second
      phase. If the employer refuses to respond or refuses to cooperate or denies
      the charges, the case proceeds to a third phase.

      3. Adjudication Phase: This phase of the process resolves the dispute
      between employer and employee. This is handled differently in the two
      counties.

            a. In Palm Beach County, cases entering this phase of the process are
            referred to “pro bono” attorneys, who represent the wage theft victims
            in civil court.
            b. In Miami Dade County, cases entering this phase of the process
            proceed to a hearing by a special Hearing Officer.

                                                                                     4
TIME PERIOD COVERED BY THE DATA:

The data prepared by the Legal Aid Society of Palm Beach (LAS) covers the time
period from Feb 2, 2011 through July 14, 2011 and represents the first 169 days of
monitoring.

The data obtained from the Small Business Department of Miami Dade (SBD)
covers the time period from Feb 28, 2010 until Aug 11, 2010 and represents 164
days of the Miami Wage Theft Program. Feb 28, 2010, the day the Miami Wage
Theft Ordinance became effective, was considered the first day of the time period.
The cut-off date chosen was Aug 11, 2010, that is, when SBD released their next
block of data. The time period for SBD was 164 days and this would enable a
comparison with an almost similar time period for LAS of Palm Beach County
(169 days). Thus, the data compares the 169 days of LAS with the 164 days of
SBD enabling us to contrast the two phases of the Wage Theft programs in the
respective counties.

In the third or Adjudication Phase, the process is different for the two counties. In
Miami Dade a Hearing Examiner process was put into effect on Jan 5, 2011 (i.e.,
on the 312th day since the implementation of the Ordinance). In Palm Beach
County there is no such system, and LAS continues to rely on “pro bono” attorneys
who proceed through the legal system. Hence, the time periods for this phase differ.
Nevertheless the outcomes are still measureable.


KEY FINDINGS:

I. INTAKE PHASE

The Intake Phase is designed to screen out wage theft claims that are not actionable.

    LAS (of PBC) retained 42 cases out of a total of 78 calls received,
     registering an intake rate of 54%.
    SBD (of Miami-Dade) reported that of 243 calls received, 179 were
     processed as complaints, thus registering an intake rate of 74%.




                                                                                   5
       Intake Rate

   PBC 54% (42 cases accepted out of 78 calls received)
   MD 74% (179 cases accepted out of 243 calls received)

 80%
 70%
 60%
 50%
                                      Palm Beach
 40%                                  County
 30%                                  Miami-Dade
 20%                                  County
 10%
 0%
       Palm Beach   Miami-Dade
         County       County


II. CONCILIATION PHASE

In both Palm Beach County and Miami Dade, the Conciliation Phase involved
sending a letter to the employer asking him/her to pay the wages.

  A. Rate of Resolution through Conciliation

   LAS (PBC)             17% of cases resolved (7 out of 42 cases)
   SBD (MD)              45% of cases resolved (81 out of 179 cases)

 50%
 45%
 40%
 35%
 30%
 25%                                           PBC
 20%                                           MD
 15%
 10%
  5%
  0%
            PBC                  MD




                                                                        6
    In the first 169 days of monitoring wage theft cases in PBC, 7 of the 42
     cases were resolved through conciliation.
    In the first 164 days of the Miami Dade process, 81 of the 179 cases were
     resolved through conciliation

B. Rate of Claim Dollar Recovery through Conciliation

    LAS (PBC)          2.5% of dollars recovered
    SBD (MD)           46% of dollars recovered

 50.0%
 45.0%
 40.0%
 35.0%
 30.0%
 25.0%                                          PBC
 20.0%                                          MD
 15.0%
 10.0%
  5.0%
  0.0%
               PBC               MD



    In PBC, the total amount of the claims was $145,923.72 but the actual
     amount recovered was $3,711.82. Thus 2.5 % of the claim dollars were
     recovered through conciliation.

    In Miami Dade, the total claim amount was $ 107,113.59. When
     proportionally adjusted for the smaller population of PBC, this amounts to
     $ 55,699.07. However, the actual amount recovered in Miami Dade through
     conciliation was $ 49,142.00. When adjusted for the smaller population of
     PBC this amounts to $ 25,553.84. Thus, the rate of recovery for SBD of
     Miami Dade was 46%.




                                                                             7
III. ADJUDICATION PHASE:

The PBC Civil Action Process and the Miami Dade Hearing Process

       Cases resolved in the adjudication phase

LAS (PBC)            0   cases
SBD (MD)           149   cases


 160
 140
 120
 100
  80                                          PBC
  60                                          MD
  40
  20
   0
             PBC                 MD


In Palm Beach County, cases not resolved by conciliation are referred to “pro bono”
attorneys, who represent the clients in the civil courts and initiate the tedious civil
process. According to the LAS report of June 20, 2011, 25 such cases are still
pending in the courts and not one single case has been resolved in this final phase.

 In Miami Dade County, cases that are not resolved through conciliation are
brought before a Hearing Examiner. From the implementation of the Hearing
Process on January 5, 2011 through August 27, 2011, a total of 149 cases have
been resolved through the hearing process. Awards for the claimants have totaled
approximately $311,590.81 (when adjusted for a proportional population of PBC
this amounts to $162,027.22).

Thus, even though this phase spans a time period that extends beyond 170 days,
and the processes in the two Counties are dissimilar, the differing outcomes are
significant.

The SBD of Miami Dade further reports on the approximate time taken to conclude
each case. They state that the average time frame for the Hearing Process is about
60 days, although in a few cases the process may exceed 60 days.

                                                                                    8
CONCLUSION:
Our brief comparison of the LAS project in PBC with the Wage Theft Program of
SBD of Miami Dade illustrates:

  1. That in the first phase, Miami Dade has an intake rate of 74% as compared
     to a mere 54% of PBC. This difference of course can be due to various
     intervening factors, but it is worth evaluating and reflecting as to why PBC
     cannot have a higher intake rate. Is it possible that, in the mind of workers,
     LAS of PBC is seen as part of the legal-judicial system, which always
     intimidates them? Is it possible that many victims of wage theft are not
     eligible for LAS representation?

  2. In the second or Conciliation Phase, where a letter is sent to the employer,
     Miami Dade has a 45 % rate of resolution through Conciliation whereas
     PBC has a resolution rate of 17%. This difference is worth examining more
     closely. A question that comes to mind is: is it possible that in the mind of
     employers, the Legal Aid Society does not seem to have the same authority
     or status as a body of the County - so that letters and communication from
     LAS do not carry the same weight as those from the government/County?
     Indeed, letters originating from the County in Miami-Dade have the force of
     subpoena power.


  3. The claim dollar recovery rate also is much higher for Miami Dade County
     as opposed to the claim dollar rate for Palm Beach County: 46% as
     compared to a mere 2.5%. This is of tremendous significance! Why is it
     that the SBD of Miami Dade is able to recover so much more in terms of
     dollars than LAS of Palm Beach County (even when adjusted for the
     different populations of Miami-Dade and Palm Beach County)? Could it be
     that the SBD has the weight of a County Ordinance behind it, whereas LAS
     can only threaten with civil action in a court?


  4. Finally, in the Adjudication Phase, even though it spans a time period
     beyond the 170 days, the Hearing Process of Miami Dade is very effective
     both in terms of time (a mere 60 days to resolve a case on average) and also
     in terms of amount of dollars recovered for wage theft cases. LAS does not
     have any data to share on cases resolved in this phase, or dollars recovered,
     because none have yet been conclusively resolved.

                                                                                 9
In sum, our comparative study clearly illustrates that the Small Business
Department of Miami Dade with the whip of the Miami Dade Ordinance has been
much more effective in the area of resolving wage theft than the Legal Aid Society
of Palm Beach County that has no Ordinance on its side, but only the help of “pro
bono” attorneys and civil action in the courts.




                                                                               10