by Michael Grabell ProPublica, Jan. 6, 2015, 8 a.m.
Illinois regulators revoked the business license last month of a check cashing store featured in a ProPublica investigation of temp agencies and labor brokers in Chicago.
The revocation order is the latest in a string of government and legislative actions taken in response to a ProPublica series on the growth of temp work in the United States. Illinois regulators said they learned of the store’s unlawful collection of fees from our story in April 2013.
According to the order, the 26th and Central Park Currency Exchange arranged a deal with a labor broker to funnel temp workers to its check-cashing business. Under the arrangement, the temp agency gave the workers’ paychecks to the labor broker who then brought them to the check cashing store. The store distributed the checks only after it had deducted fees for the broker and for its services, according to the order by the state Department of Financial and Professional Regulation.
“The workers, earning minimum wage, were charged fees by the licensee well in excess of the amount permitted by law,” Francisco Menchaca, director of the Division of Financial Institutions, wrote in the Dec. 2 order.
Regulatory actions rarely lead to criminal charges and the Illinois Attorney General’s office said it has not received any information about the case from the agency.
The store has appealed the license revocation and is allowed to remain open until a hearing before an administrative judge. Bruce Balonick, an attorney for the check cashing store, said he didn’t believe “the currency exchange did anything wrong other than to serve its customer.”
Temporary employment has surged to record levels since the most recent recession, leading to the growth of ” temp towns,” where it is nearly impossible to find blue-collar work without first going through a temp agency. Workers in these largely Hispanic and African-American neighborhoods reported rampant wage theft and high fees that often brought their pay below the minimum wage.
In addition, a ProPublica analysis of workers’ comp claims in California, Florida, Minnesota, Oregon and Massachusetts found that temp workers were far more likely to get injured on the job than regular workers. ProPublica detailed the deaths of temp workers who were buried alive in sugar, pulled into a hummus grinder and crushed by a 2,000-pound pallet of flavored rum2014all after bosses ignored warnings about the dangers facing temp workers in their plants.
The United States stands nearly alone in its lack of regulation, with some of the weakest labor protections for temp workers in the developed world, ProPublica found using data compiled by the international Organization for Economic Cooperation and Development (OECD).
Among the actions taken:
- In September, California Gov. Jerry Brown signed a bill, inspired by the ProPublica’s investigation, which will hold the state’s employers legally responsible for wage and safety violations committed by their subcontractors and temp agencies. Companies could face fines if the agencies they use fail to pay wages or provide workers’ compensation insurance.
- In July, U.S. Senator Robert Casey, who heads the Senate’s workplace safety subcommittee, said he was “particularly troubled” by the death of Janio Salinas, who was buried alive in sugar 13 days after the Pennsylvania plant where he worked as a temp removed a safety screen because it slowed down production. Casey, D-Pa., wrote a letter to the Occupational Safety and Health Administration (OSHA) asking the agency to explain its handling of the case and what additional actions Congress could take to improve temp worker safety.
OSHA, which launched a temp worker initiative in April 2013, has devoted increased attention to safety violations involving temp workers and to informing temp agencies, and companies that use them, of their responsibilities. In 2014, OSHA inspected 283 worksites employing temp workers2014more than four times the number of inspections in 2013, according to Nickole Winnett, an employment lawyer for Jackson Lewis.
The agency now trains inspectors and company safety officials with surveillance video that ProPublica obtained showing the failures that led to the death of temp worker Day Davis on his first day at a Bacardi plant in Jacksonville, Fla.
In Illinois, ProPublica detailed abuses in the Little Village neighborhood of Chicago, where labor brokers known as raiteros, picked up workers and shuttled them in buses and vans to pack products for Sony, Fresh Express, Smirnoff and Ty Inc., one of the largest makers of stuffed animals in the world.
Dozens of workers interviewed by ProPublica knew the companies they worked at only by generic Spanish names2014las lechugas (the lettuces), los vinos (the wines), los peluches (the stuffed animals). Their only contact with the temp agency that officially employed them was that its name was on their paycheck. In all other respects, their employers were raiteros they knew only as Rigo, Carmen or Cirilo2014 drivers who would pick them up from street corners and alleyways and ferry them to suburban warehouses 30 minutes to an hour away.
The raiteros would charge the workers $8 a day for the ride. But workers who had their own rides or tried to arrange with the temp agency to drive directly to the warehouse said they lost their jobs to other workers who paid the raiteros.
Under Illinois law, it is illegal for temp agencies to charge workers for transportation. The arms-length relationship with raiteros allowed temp agencies to get around the law and benefit from free recruiting without having to open an office in the immigrant neighborhood.
The Illinois Department of Labor said it is still investigating three temp agencies on transportation issues2014an inquiry that has lasted more than a year.
At the end of the work week, raiteros would pick up the paychecks from the temp agencies and bring them to check cashing places in Little Village. The check cashing store named in the revocation order, for example, made an arrangement to collect fees for Rigoberto Aguilar, a raitero who supplied workers for Select Remedy, part of one of the largest industrial temp agencies in the United States.
The check cashing store’s manager, Rudy Polheber, said in 2013 that the practice was a convenience offered to Aguilar’s temp workers, who would get charged a reduced rate of $1 plus 1 percent of the check, he said.
But Leone Bicchieri, director of the Chicago Workers Collaborative, said the arrangement often resulted in workers facing excessive fees, waiting weeks to get paid or getting trapped in a finger-pointing game between the temp agency and the raitero over missing pay.
It is illegal in Illinois for temp agencies to force a worker to pay fees for cashing a paycheck. But some workers, who had accounts at banks that cashed checks for free, told ProPublica they couldn’t get their paychecks unless they agreed to pay the check cashing fees.
Aguilar did not return calls about the order, but responded with a text message declining to comment. Last year, Aguilar, who started as a temp worker himself, said he merely provided a service to workers who needed transportation. He said he had never denied a person work over failure to use the check cashing agency.
“It’s positive that a public statement has been made,” Bicchieri said, “that shady dealings between temp agency raiteros and check cashing places are not going to be tolerated.”
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