US Department of Labor; Small Businesses; Minimum Wage

October 22, 2014

Many startups are often owned and operated by U.S. immigrants and in most cities there is a burgeoning workforce ready to work at minimum wage.  Immigrants, and many other new business owners, are often unfamiliar with the complexity of overlapping laws and regulations that apply to businesses.

There is one business trap that I have been working on that business owners should heed: minimum wage documentation.  The reason I mention immigrant in this context is that a Department of Labor investigator I spoke with had a great deal of familiarity with asian-owned small businesses and seemed to be disdainful of their intention to comply with minimum wage law.  I don’t know that the Department of Labor is focusing on this segment of the population but from this conversation I got the impression that it might be or at least this investigator seemed to view this part of the business world with cynicism.

Apparently based on a complaint by a disgruntled formed employee the Department of Labor investigated an immigrant-owned small business and found that its recordkeeping was inadequate with respect to hours actually worked.  Apparently based on the word of this former employee, the Department of Labor determined that a nearly crippling amount of money was owed to employees for nonpayment of overtime.

The business owners were not fluent in English, were not given a translator, and the method of calculating the underpayment was not shown to them.  They were not advised to get a lawyer and they were told that if they did not pay it right away they would be taken to court where they would be assessed a higher amount and have to pay a huge amount of money for lawyers.  The people were terrified, signed a “confession,” and agreed to pay the assessment.

These bullying tactics have been repeated.  People subjected to a minimum wage audit need to be aware of their rights and understand that the unverified conclusions of the Department of Labor can be substantially off the mark.

The Fair Labor Standards Act, a federal law, requires a level or recordkeeping that is not difficult to maintain.  It is prudent to verify compliance.  If audited by the Department of Labor, seek assistance as the conclusions of the Department of Labor are not unassailable.

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Attitudes Toward Illegal Immigrants

June 7, 2008

The Christian Science Monitor reported two years ago that there are between 7 million and 20 million, or more, illegal immigrants here.  These people typically take up the bottom strata of jobs, filling the least desirable jobs, often for wages lower than would be acceptable for citizens.  In the 1990’s this supply of cheap labor was viewed as a key component in avoiding inflation.  For that reason and because many key businesses (and industries) relied on this cheap labor supply, the nation turned it’s back on this “problem.”

Paul Krugman, the liberal economist who writes for the New York Times, wrote some time ago that this situation was not a partisan issue.  His analysis suggested that illegal immigration was a net economic loss for the country.  While many businesses were profiting off this labor source, the country as a whole was paying a significant amount of money for public education, and health care.  While many illegal immigrants were paying taxes, often through false social security numbers, many others were not paying taxes.  These people accepted cash under the table from employers who were able to pay substandard wages and on top of that avoid paying withholding taxes.  As we know, many politicians were found to have employed illegals this way as domestic help.

I don’t think that anyone disagrees that the deportation of illegals in mass would have a substantially disruptive effect on business here and a sharply inflationary effect.  This seems to be the main reason that the “law and order” arm of the Republican Party cannot get anything done about the influx of undocumented immigrants, even with a Republican dominated legislative branch (until a couple of years ago), a Republican president and  a Republican-heavy judicial branch.  Our economy is rather delicately balanced right now and the disruption caused by massive deportation could have a strong negative effect.

Because we have only made largely token efforts to enforce our immigration laws and at least certain sectors of the economy have profited by the exploitation of illegals as cheap labor, you could very well say that the illegals are here at our sufferance — with a nod and a wink from business.

The economy has always played a role in attitudes toward immigrants, both legal and illegal.  Chinese people were shipped here in mass to provide labor for the construction of the railroads in the nineteenth century.  The transcontinental line reached Tacoma mid-century, then lines were built to Seattle from the south and from the east and between Seattle and Newcastle where there were extensive mining interests.   When this was done hundreds of Chinese were left in the Seattle area.  They found jobs in town and what would now be called a Chinese ghetto developed here.  There was a regional economic downturn here in the 1860’s and vigilantes rounded up almost all the Chinese in town and marched them to the end of a pier where they waited for several days for a ship bound for San Francisco.  Some were put on the first ship to arrive and the remainder went on the next one.  The impetus for this was the view that the Chinese were taking jobs that whites should have in hard times.

In the 1880’s “exclusion laws” were passed by the federal government which rendered it illegal for anyone  to come here from China.  A federal law passed in 1882 limited U.S. citizenship “to aliens being free white persons and to aliens of African nativity and to persons of African descent.” The Chinese who were already here were undocumented, denied any hope of citizenship and the subject of a great deal of abuse.

The Alaska gold rush and a disastrous fire in Tokyo created a local lumber boom which led to the importation of large numbers of Japanese laborers at the end of the nineteenth century.  Many lived in company towns in Eastern King County, such as Sellick.  The Japanese suffered much the same fate as the Chinese who were left stranded here.  In fact the first graduating class from the University of Washington Law School (the class of 1902) included an immigrant from Japan, Takuji Yamashita.  He was denied citizenship and denied admission to the bar after graduation.  He was forced to work in restaurants until his internment forty years later.  It wasn’t until 1968 that immigration laws that banned Asians or barred them from citizenship were entirely eliminated.  Washington’s Senator Warren Magnuson led this fight on the national level.

Other controversial immigration policies include our refusal to allow Jews admission from  Germany in the 1930’s and early 1940’s.  Many of those who came here were illegals.  Our current refusal to admit displaced people from Iraq has caused mild controversy.

The division between people on the question of illegal immigrants is many faceted, but some people have a more sympathetic attitude because they see the illegal immigrants in  a light something like the Chinese in the mid-nineteenth century and the Japanese in the late nineteenth century as being admitted here for the purpose of performing labor, then rebuked because of their status.  For these sympathizers the purposefully lax enforcement of immigration laws and eager employment of people coming here without papers is a form of admission that carries with it responsibility.


Illegals In Washington

March 4, 2008

Some folks feel that people who reside in the U.S. without immigration papers should not have the rights and privileges of enjoyed by citizens. That seems easy enough.Here’s a little background. The Christian Science Monitor reported two years ago that there are between 7 million and 20 million, or more, illegal immigrants here. These people typically take up the bottom strata of jobs, filling the least desirable jobs, often for wages lower than would be acceptable for citizens. In the 1990’s this supply of cheap labor was viewed as a key component in avoiding inflation. For that reason and because many key businesses (and industries) relied on this cheap labor supply, the nation turned it’s back on this “problem.”

Paul Krugman, the liberal economist who writes for the New York Times, wrote some time ago that this situation was not a partisan issue. His analysis suggested that illegal immigration was a net economic loss for the country. While many businesses were profiting off this labor source, the country as a whole was paying a significant amount of money for public education, and health care. While many illegal immigrants were paying taxes, often through false social security numbers, many others were not paying taxes. These people accepted cash under the table from employers who were able to pay substandard wages and on top of that avoid paying withholding taxes. As we know, many politicians were found to have employed illegals this way as domestic help.

I don’t think that anyone disagrees that the deportation of illegals in mass would have a substantially disruptive effect on business here and a sharply inflationary effect. This seems to be the main reason that the “law and order” arm of the Republican Party cannot get anything done about the influx of undocumented immigrants, even with a Republican dominated legislative branch (until a couple of years ago), a Republican president and a Republican-heavy judicial branch. Our economy is rather delicately balanced in a presently mild recession and the disruption caused by massive deportation could have a strong negative effect.

Because we have only made largely token efforts to enforce our immigration laws and at least certain sectors of the economy have profited by the exploitation of illegals as cheap labor, you could very well say that the illegals are here at our sufferance — with a nod and a wink from business.

The economy has always played a role in attitudes toward immigrants, both legal and illegal. Chinese people were shipped here in mass to provide labor for the construction of the railroads in the nineteenth century. The transcontinental line reached Tacoma mid-century, then lines were built to Seattle from the south and from the east and between Seattle and Newcastle where there were extensive mining interests. When this was done hundreds of Chinese were left in the Seattle area. They found jobs in town and what would now be called a Chinese ghetto developed here. There was a regional economic downturn here in the 1860’s and vigilantes rounded up almost all the Chinese in town and marched them to the end of a pier where they waited for several days for a ship bound for San Francisco. Some were put on the first ship to arrive and the remainder went on the next one. The impetus for this was the view that the Chinese were taking jobs that whites should have in hard times.

In the 1880’s “exclusion laws” were passed by the federal government which rendered it illegal for anyone to come here from China. A federal law passed in 1882 limited U.S. citizenship “to aliens being free white persons and to aliens of African nativity and to persons of African descent.” The Chinese who were already here were undocumented, denied any hope of citizenship and the subject of a great deal of abuse.

The Alaska gold rush and a disastrous fire in Tokyo created a local lumber boom which led to the importation of large numbers of Japanese laborers at the end of the nineteenth century. Many lived in company towns in Eastern King County, such as Sellick. The Japanese suffered much the same fate as the Chinese who were left stranded here. In fact the first graduating class from the University of Washington Law School (the class of 1902) included an immigrant from Japan, Takuji Yamashita. He was denied citizenship and denied admission to the bar after graduation. He was forced to work in restaurants until his internment forty years later. It wasn’t until 1968 that immigration laws that banned Asians or barred them from citizenship were entirely eliminated. Washington’s Senator Warren Magnuson led this fight on the national level.

Other controversial immigration policies include our refusal to allow Jews admission from Germany in the 1930’s and early 1940’s. Many of those who came here were illegals. Our current refusal to admit displaced people from Iraq has caused mild controversy.

The division between people on the question of illegal immigrants is many faceted, but some people have a more sympathetic attitude because they see the illegal immigrants in a light something like the Chinese in the mid-nineteenth century and the Japanese in the late nineteenth century as being admitted here for the purpose of performing labor, then rebuked because of their status. For these sympathizers the purposefully lax enforcement of immigration laws and eager employment of people coming here without papers is a form of admission that carries with it responsibility.


Integration of Immigrants

March 3, 2008

I recently wrote an admitted dry, entirely neutral and innocuous, report on a decision regarding the admission of evidence in a case in which an illegal immigrant was the plaintiff. This person was paralyzed as a result of an accident caused by illegal working conditions, but apparently because his status as an illegal immigrant came out in court the jury denied him any recovery whatsoever. Judging from blind fury of the reaction to the piece, there appear to be many people for whom this topic unleashes their damaged inner-child.  The idea of illegal immigrants unlocks some component of their psyche that should be kept locked.  This certainly supports the view that mention of the topic can deny an illegal immigrant a fair trial.Apart from primal screams, there have been developments in regard to immigrant policy. Governor Gregoire two weeks ago signed an executive order creating Washington’s New Americans Policy Council, which is charged with helping immigrant succeed and become citizens. While this approach was not championed by those who commented, it might help with their socialization by subduing their need for therapy.


Exploitation of Immigrants

January 16, 2008

Being an election year, immigration is a hot topic. Somewhat less discussed is the exploitation of non-English speaking immigrants as consumers. Mexican immigrants are now generally recognized as a significant market sector. Sometimes the efforts made to lure them into sales are not matched by the care to see that they are treated fairly. The disadvantage suffered by some immigrants in commerce is not just lack of familiarity with the language but more importantly — and quite independently — many are vulnerable to dishonest practices due to a lack of familiarity with customs and conventional practices.

For example Harris Ford in Seattle is a car dealership that employed a Spanish speaking translator who could not read English, so the non-English speaking Latino had no way of checking the language of a contract before signing. He or she was entirely dependent on the representations of the sales person.

Lorenzo Hernandez went to Harris Ford to see about getting a truck. He had a two year old car but was drawn to the dealership by advertising for a truck that cost only a few thousand dollars more than his car had cost. He was told that his car could be used as a down payment. Lorenzo who was working two jobs and whose wife was pregnant with their second child insisted that he had to have an automatic transmission so that his wife could drive up the steep downtown hills for her doctor’s appointments. The salesman said that there were no trucks on sale with automatic transmissions but that he could buy one with a manual gear shift then if after a month or so if it did not work out, he could bring it back and exchange it for one with an automatic transmission. This seemed fair to Lorenzo, and he bought the truck. It turned out that Harris Ford gave him only a fraction of the blue book value fro his tradein, resulting in a $5,000 deficiency on the trade in. This was added to the price and with all the add ins his truck cost more than $10,000 above the price he thought he was getting.

The truck did not work out and Lorenzo took it back to Harris Ford. Sure enough he got a truck with an automatic transmission but what he was not told was that the dealership had just sold him a new truck at a non-sale price and used his first truck as a trade in with a two thousand dollar discount on value from the advertised “drastic” sales price. He ended up with a debt more than twice the advertised sales price of the truck, and crippling monthly payments. After about a year he called the dealership and said that he could not — even with three jobs — continue to make the payments. The truck was taken from him and a few months later he was sued for roughly the full sales price of the truck that he originally inquired about. He found himself with about $15,000 of debt and without transportation.