On a recent morning inside the Oakland office of Labor Ready, the nation's leading provider of temporary manual labor to light industry and small businesses, a few bored men sat on blue plastic chairs and waited. Outside, several more stood, smoked, and waited. On any given morning, the scene at Labor Ready offices throughout the Bay Area is likely to be the same: a bunch of people sitting, standing, watching TV, reading the paper -- basically, anything but working. They are technically in the offices of their employer, waiting for the opportunity to dig ditches, sweep floors, lift boxes, or perform other manual labor. Sometimes they wait all day.
Labor Ready specializes in immediacy. As its name implies, it provides companies with a pool of laborers ready to go off to work at any given moment. Even though the work assignments are often physically grueling, and the company's $7.65-an-hour average California wage doesn't necessarily allow its workers to make ends meet, Labor Ready's offices typically are filled with people waiting for a chance to work. Its Bay Area dispatch centers open at 5:30 a.m., but some workers take their place in line as early as 4:00 a.m. because the jobs are first-come, first-served.
Local workers say Labor Ready requires them to check in at the office an hour before they go out to work, even if they are returning to a job they worked the day before. But the company does not pay them for either the wait or the travel time from their offices to the work site. And that violates California's labor code, according to a class-action lawsuit filed in Alameda County. With the help of two Oakland law firms, five company laborers are arguing that California law requires employers such as Labor Ready to pay workers for all the hours they spend under that employer's control.
Part of Labor Ready's appeal is the extent to which it shoulders burdens that normally fall to industry. In addition to handling worker payment, Labor Ready takes care of workers' compensation and payroll taxes for the small businesses and contractors who actually put their laborers to work. And last fall Labor Ready and other temporary agencies helped repel a California bill that would have made some of these duties the responsibility of their customers.
The lawsuit argues that Labor Ready cannot reap the benefits of being the main employer while simultaneously defining payable hours as only those spent at the customers' place of business. To the company's workers, it's an issue of fairness. "If we have to be here an hour early, we should start getting paid an hour early," veteran laborer Mel Crowder said as he waited at Oakland's Labor Ready office. Longtime worker Kevin Thomas agreed. "They told us vehemently over and over again that you don't work for them, you work for us," said Thomas, who worked for Labor Ready for four years. "You can't have it both ways."
Labor Ready, however, maintains that its policies comply with all California labor laws. David Ongaro, the attorney representing the company in the case, flatly denies that workers are required to wait at their offices. "It is just to get their availability," Ongaro said of the check-in policy. "A lot of our workers do not have a permanent place to live or phones that are readily available." Employees with phones can phone the company to notify it of their availability, Ongaro contends. But the plaintiffs and other local workers say it's understood that they won't actually get a job unless they are physically present.
Richard Kelley was one such laborer. A homeless laborer who lives out of his car, Kelley is one of the flock of former company laborers who asked to be added to the class-action suit since the judge ordered Labor Ready to tell its workers about it in November. "Everybody knows about it," said Kelley, who worked at very physical jobs until his knees gave out. "I called immediately."
Labor Ready spokeswoman Stacey Burke said her company provides an invaluable service to workers such as Kelley. "We put people to work," Burke said. "We provide dependable temporary workers to businesses ... and we can provide a bridge to full-time employment without charging a fee." For instance, Burke said that last year Labor Ready found work for 700,000 people across the nation -- 90,000 in California alone. Without such services, Burke said a whole class of workers would have few other opportunities for legal employment.
"What we do has such enormous social value," Burke said. "When people work for us, they are not working in the underground economy. They are covered by workers' compensation. They are paid every day, and they can work in a way that suits their lifestyle."
But attorney David Borgen of Saperstein, Goldstein, Demchak & Baller, describes the lawsuit as a different form of service to some of the state's lowest-paid employees. "Many have no benefits and are working just above minimum wage," Borgen said. "They are the most vulnerable part of the work force and they are getting taken advantage of. The employer has to follow the law strictly and literally."
Labor Ready officials like Burke get plenty of practice defending their firm from such accusations. Across the country, the company must answer to a number of class-actions lawsuits and an ever-growing litany of worker-abuse complaints. A New Hampshire court ruled that Labor Ready illegally deducted fees from workers' paychecks for transportation costs. In its home state of Washington, the Tacoma-based firm was ordered to pay more than $730,000 for improperly classifying workers and thereby reducing its workers' compensation costs. Here in California, the state Occupational Safety and Health Administration moved to make the company inspect customers' job sites before sending its laborers there.
The cascade of complaints is partly a product of a national organizing and oversight campaign launched last year by the AFL-CIO. Will Collette, a senior strategic researcher for the AFL-CIO's Building and Construction Trades Department, said that while the union has not financed any of the current lawsuits against Labor Ready, organizers do routinely talk with workers about possible legal abuses, helping them fill out complaints and introducing them to lawyers.
Like many temporary workers, Labor Ready's employees are not unionized, which organizers blame on the transient nature of temporary work. The union also disapproves of Labor Ready's practice of sending in strikebreakers during management and union disputes. "It's not illegal, but it sucks," Collette said. While the AFL-CIO campaign is aimed at the whole temporary industry, Labor Ready has become a focus. "Labor Ready is the big dog in blue-collar temping by far," he added. "As we looked at Labor Ready, we were amazed at the extent which this company misbehaves."
The union alleges that Labor Ready endangers its workers by sending them to dangerous work sites with few skills and little safety training, and that their rate of injury is three times that of the construction industry average. In addition to paying workers low wages, Labor Ready routinely deducts fees for equipment, transportation, and check-cashing.
A lawsuit filed in San Jose attacks this latter practice. Workers who want to enjoy the fruits of the company's "Work Today, Cash Today" motto can use the company's Cash Dispensing Machines to cash their paychecks for one dollar plus any extra change. While Labor Ready calls the charge minimal, it reportedly has made millions off the fees. The suit is pending, as are similar suits filed in Georgia and New York.
The company notes that its employees are free not to take advantage of optional services such as check-cashing. Burke believes the union's real worry is that temporary workers may start filling jobs once filled by union laborers -- even though Labor Ready workers most typically fill unskilled construction jobs not likely to tempt higher-skilled union workers. Burke chalks up the legal wrangles to the reality of running a large company. "It's the cost of doing business," he said.
Those costs could get higher if the wait and travel time lawsuit succeeds. Lawyers for the plaintiffs are demanding back wages and penalties for a still-undetermined number of workers. The total price tag could be in the millions. "This is a wake-up call for the temporary agencies that they should be changing their policies," said Lisa Pau of Van Bourg, Weinberg, Roger & Rosenfeld, the firm that is co-counsel on the suit. In turn, Labor Ready's Ongaro warns that if the suit succeeds, it could mean temporary agencies will move out of California, leaving many of its unskilled workers to fend for themselves.
Since the case still is in the discovery phase, it will take some time for the issue to be settled. But in the meantime, with unemployment rising, more workers are likely to join the ranks of those waiting to work and eager to get paid -- the sooner, the better.
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