February 2, 2017

Judge stops, for now, some of state’s reasons for denying wage theft claims

A judge temporarily halted a New Mexico state agency’s self-imposed limitations on wage theft claims.

In a ruling Tuesday afternoon, Santa Fe District Judge David Thomson ordered that, for now, the state Department of Workforce Solutions (DWS) cannot automatically deny complaints of wage theft that total more than $10,000. The state department is also not allowed to automatically turn down claims that happened more than a year before they’re made.

“Wage theft” refers to an employer denying payments owed to an employee in any way, which can include paying below minimum wage and refusing to pay overtime, for example.

Thomson’s temporary restraining order against the state comes because of a class-action lawsuit filed just two weeks ago by “low income workers” who made wage theft claims against their employers to DWS.

Ten individuals named in the lawsuit allege that DWS’ handling of their wage theft claims violate multiple state laws.

DWS is tasked with enforcing the New Mexico’s minimum wage, wage payment and overtime payment laws.

Department spokeswoman Joy Forehand did not comment on the restraining order but said, in a statement, that DWS “is reviewing the lawsuit and take all allegations seriously.”

“When someone alleges labor law violations, we investigate to ensure New Mexicans aren’t getting shortchanged by businesses,” Forehand said.

Four of the individuals alleging wage theft and five advocacy organizations—the New Mexico Center on Law and Poverty, Somos Un Pueblo Unido, El Centro de Igualdad y Derechos, NM Comunidades en Accion y de Fé (CAFÉ) and Organizers in the Land of Enchantment (OLÉ)—are listed as plaintiffs in the lawsuit.

Forehand called the plaintiffs “a politically motivated group,” an assertion Center on Law and Poverty attorney Elizabeth Wagoner denied.

“There’s absolutely no political motivation in wanting the state to properly enforce the minimum wage on behalf of hard-working, low income New Mexicans,” Wagoner said.

While the restraining order isn’t an immediate decision on the case and does not force DWS “to perform correct investigations” into wage theft claims, Wagoner said the relief is still “really important.”

“Otherwise workers who filed claims at DWS were being lost,” she said in an interview. “DWS was not keeping contact information for them.”

The restraining order will also help people better track how DWS is responding to wage theft claims since the state agency will have to accept more complaints, Wagoner said.

One of the lawsuit’s plaintiffs, Jose Olivas, filed a wage claim complaint in March 2015 claiming that his former employer owed him $15,000 in back wages for remodeling a restaurant in Farmington in the summer of 2014.

DWS, according to the lawsuit, responded in a letter that it “may not accept wage claims over $10,000” and told him he would have to pursue the situation in court himself.

No state statutes, according to the lawsuit, authorize the $10,000 cap.

But DWS refers all wage claims of more than $10,000 to district court, according to Forehand, “because we believe this needs to be taken to the next level, given the severity of the problem.”

Similarly, the lawsuit alleges that the department denied a wage claim by Octavio Rios Olivas, a Santa Fe janitor (no relation to Jose Olivas), who in June 2016 asked for back wages from April 2015. A DWS secretary told Rios Olivas that he could not request back wages from that time “because of the agency’s policy that wage claims can only go back one year,” according to the lawsuit.

The one-year limit is “set in law,” Forehand said, “and we’ve always believed it needs to be changed.” She added that DWS has “called upon lawmakers in the past to change the statute to three years.”

New Mexico wage laws require employers to maintain payroll records for their former employees for just one year.

But Wagoner argued that DWS is ignoring a law passed by the state Legislature in 2009 that indeed extended one-year statutory limitation on wage claim investigations by the department to three years, which is also cited in the lawsuit. She added the a separate state unemployment statutes call for employers to keep payroll records for former employees for four years.

“What [DWS] can’t explain is why they think they’re limited by [the wage statute],” Wagoner said.

The lawsuit also alleges that DWS is failing to impose damages on employers who pay their employees below the state’s minimum wage rate, which is currently $7.50 an hour.

On this issue, Forehand said that the department “routinely requests for the appropriate court of law to apply damages and interest associated with wage claims once those cases are filed.”

For now, the restraining order will put an end to DWS’ practice of automatically turning away complaints. In his ruling, Thomson writes the department’s continued use of both practices “will cause irreparable harm” to those affected by them.

“DWS has to preserve these records so that ultimately their rights can be enforced,” Wagoner said of wage theft victims.