The federal Department of Labor found employees at some Bloomington businesses were owed an average of more than $5,000 in back wages. Other local employees walked away with about $18. To the department’s investigators, wage theft from vulnerable working populations is abuse, no matter the amount.

Bloomington, like other cities includ-ed in the federal Department of Labor’s Midwestern College Town Initiative, has been identified as a city with high poten-tial for wage theft. A college town tends to foster a thriving hospitality industry, a sector typically filled by student, temporary or foreign workers. Often unfamiliar with wage laws and worker rights, these vulnerable populations may face language barriers, a lack of options, concerns about immigration status, cultural expectations and other issues. All of these pressures can expose the workers to the potential for exploitation.

That’s why Christie Popp, a Bloom-ington lawyer who has practiced immi-gration law exclusively for four years, always asks those who come to see her, “Are you treated fairly by your boss? Do you get paid fairly for the work you do?”

“I would say the majority of my clients aren’t being paid well, but they don’t want to do anything about it,” Popp said. “These are small communities, and you don’t want to make trouble because everybody will know about it. Honestly, people don’t come to see me unless they have an immigration issue, so there’s a huge population out there that is just dealing with it (wage theft).”

Popp refers those who come to her strictly with complaints about wage theft to the Department of Labor. If it’s a matter of more than $2,000, she’s not reluctant to recommend a labor lawyer. Rob Hicks, an Indianapolis labor and employment attorney with Macey Swanson & Allman, said he’s had experi-ence with wage theft in Monroe County.

“I think wage theft is prevalent,” Hicks said. “I think it happens a lot more than people realize or would estimate that it happens. But employees have to know the law, and in some cases — particularly

in cases of undocumented workers — they have to make the calculation to see if it’s worth saying anything.”

Popp said her client base is a mix of demographics, due in part to her loca-tion downtown and her background. Having worked at Indiana Legal Ser-vices, Popp said she was involved with many Latino and low-income clients. Today, she helps a diverse crowd that is primarily Latino, with a mix of Korean, Middle Eastern, African and some Euro-pean workers.

“The largest population in Bloom-ington is Latinos, but I always wished they (the city’s Latino Programs and Outreach division) would expand to

the populations that go unnoticed,” Popp said.

A Pew Center analysis of the U.S. Census Bureau’s 2011-13 American Com-munity Survey data shows that immi-

Short Changed: Day 2 of a 2-day series on labor abusesThe Herald-Times looks at violations of federal Fair Labor rules uncovered in a recent U.S. Department of Labor investigation of wage theft in Midwestern college towns.

Thursday: What was found in payroll records of selected Bloomington businesses.

Today: Which workers are most vulnerable to wage theft; details of local violations.

In case you missed it, you can read Thursday’s story on HeraldTimesOnline.com.

American workers receiving back wagesThe federal government has recovered back wages for thousands of employees.Employees

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U.S. DEPARTMENT OF LABOR’S WAGE AND HOUR DIVISION

’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16

283,677

BILL THORNBRO | HERALD-TIMES

WAITING FOR JUSTICEHotel, restaurant workers in college towns particularly vulnerable to wage theft

By Kurt Christian812-331-4350 | kchristian@heraldt.com

Vol. 140, No. 222© Hoosier Times Inc. 2017

TODAY’S WEATHER | BACK PAGE

34 24

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More on wagesLOCALDetails of local cases | PAGE A5BUSINESSBloomington’s wage growth task force | PAGE D1

“I would say the majority of my clients aren’t being paid well, but they don’t want to do anything about it. These are small communities, and you don’t want to make trouble because everybody will know about it.”CHRISTIE POPP, a Bloomington lawyer who specializes in immigration law

JEREMY HOGAN | H-T FILE PHOTO

SEE WORKERS | PAGE A4

Switchyard Park will take months longer and $5.8 million more than originally planned in order to become a reality.

A recently approved update to the design contract for the future park adds extra work and pushes the final completion date for construction out to May 2020, although city officials said the park will open for use in late 2019.

That’s more than a year later than the original estimate for park completion.

The original project schedule envisioned ribbon-cutting in late summer or fall of 2018.

Now, city officials hope to have a ribbon-cutting ceremony by the end of 2019 and open the park for public use, said Dave Williams, operations and development manager for the Bloomington Parks and Recreation Depart-ment.

Final touches to the park, including planting of trees and other vegetation, should then

Switchyard Park will cost more, take longerUpdated plan pushes projected completion date back to May 2020By Megan Banta812-331-4368 | mbanta@heraldt.com

SEE PARK | BACK PAGE

While a letter to the parents of black and biracial boys at Jackson Creek Middle School about a new student program sparked controversy, those who attended the first meeting say principal David Pillar had good intentions and that the program he sought to bring to the school was sound.

Roy Dobbs, the speaker at the meeting Tuesday morn-ing, described the atmosphere of the meeting with 20 or so boys as “elec-trifying.”

Dobbs is a principal at Pike Preparatory Academy in Indianapolis’s Pike Township. He founded his pro-gram, Young Men of Purpose, in 2001 to “build character, citi-zenship and academics for all young men,” he said in a phone interview Thursday.

He said schools and communi-ties throughout central Indiana use the program, as do groups in Arizona, Colorado and Cali-fornia.

And while some, like the Colo-rado group, may choose to use the program for select demographics

JCMS meeting praised, despite controversial invitation letterBy Brittani Howell812-331-4243 | bhowell@heraldt.com

PILLAR

SEE JACKSON CREEK | BACK PAGE

Tom Crean

75 cents n Bloomington, Ind. n Friday, January 27, 2017 n HeraldTimesOnline.com n 5 sections

Don’t pigeonholeThe Foxhole

Hoosiers no match for Wolverines

SPORTS | B1BUSINESS | D1

grants are 1.4 times more likely to work in leisure and hospitality businesses — including the food service industry — than native born workers, with 12.3 percent of that sector made up of immigrants.

That likelihood is even greater in Indiana, with for-eign born workers being 1.5 times more likely to work in that sector in the state. The Bureau of Labor Statistics also surveyed age demo-graphics for the accom-modation and food services sector in 2015, finding that 16- to 24-year-olds make up 37 percent of that industry.

Those demographics demonstrate the scale at which wage theft violations may happen, especially when vulnerable popula-tions are more likely to be exploited.

At the local level, Jerry Conover, director of the Indiana Business Research Center, said Bloomington’s accommodation and food services sector accounts for one in every eight jobs locally. That’s an increase from the one in every 10 jobs in 2000.

It’s a sector largely driven by local population growth, Conover said, which will continue expanding in the years ahead.

Foreign-born workers were nearly twice as likely as their U.S.-born counter-parts to have a minimum wage violation, according to a study for the National Employment Law Proj-ect, the UCLA Institute for Research on Labor and Employment and the Cen-ter for Urban Economic Development.

Hicks said younger employees may face simi-lar situations since they’ve

not had much workforce experience. And younger employees who also are college students, Hicks said, may be less likely to report wage theft since they have “another goal on their horizon.”

“In what I’ve seen, anecdotally, the younger employees may be dispro-portionately affected by tipping,” Hicks said. “As you see in Bloomington, they’re often working in jobs where they’re just getting tips. They may be in those posi-tions a little bit more fre-quently. In addition, lack of work experience may play into them getting taken advantage of.”

Aside from gaps in demographic coverage, Popp believes the smaller the restaurant, the more likely it is to fly below the Department of Labor’s radar.

“When I hear com-plaints, it’s the owners pinching pennies by taking it out on their employees,” Popp said. “It’s often the smaller owners — the ones that own one or two restau-rants and aren’t making as much money — that aren’t paying well and mistreat their employees.”

Popp said she’s reported businesses in the past, only to be told the Department of Labor had to decline investigating them due to limited resources.

“There are systematic gaps because they can only investigate so much,” Hicks said in agreement. “A lot of

times, there may be cer-tain norms in the work-place that are violations of the (federal Fair Labor Standards Act) rules, but those don’t necessarily get exposed unless somebody brings it to the forefront. I applaud the Department of Labor for doing what it’s doing, but … it only has enough of an investiga-tive arm and branch and resources to focus on the initiative like the one in Bloomington, and that’s very specific. They can’t do that everywhere.”

While Popp said there are restaurants in Bloom-ington that pay undocu-mented workers well and according to federal law, the number of complaints she receives outweigh the positive examples. A host of factors play into why one restaurant may take advan-tage of its employees while another treats them fairly. For relationships between foreign employers and for-eign employees, Popp said it often comes down to trust.

“I have seen people — in multiple places — forced to work for basically no mon-ey by a co-countryman or a family member, and when the person speaks up, that’s when the threats begin,” she said. “I have seen family members abused by fam-ily members. Not only are they vulnerable by status, but they’re also vulnerable because they have to go against their family mem-bers.”

When it gets to be too much, Popp said, victims often reach out to Middle Way House, local com-munity resource group El Centro Comunal Latino, their place of worship or any number of social orga-nizations. Jane Walter, El Centro Comunal Latino’s health projects coordinator, has heard many anecdotal accounts from area Latino workers, even some who have lived off tips alone.

“I think they (Latinos) go where there are jobs, and college towns — by nature — have jobs,” Walter said. “Especially restaurant and hospitality jobs.”

Hicks said that while the law generally protects workers from retaliation by bosses, employees in Indiana are at-will employ-ees who can be fired for a variety of reasons.

“Employees have to weigh the assertion of that right versus what it means to them, and whether they’re going to get any-thing significant from it,” Hicks said. “If you need a job and you’re supporting a family, you may look the other way.”

A4 | FRIDAY, JANUARY 27, 2017 | THE HERALD-TIMES | LOCAL

WORKERSImmigrants, young employees often don’t know their legal rightsCONTINUED FROM PAGE A1

Does someone owe you money? The U.S. Department of Labor isn’t always able to locate and notify all employees who are owed back wages, so in an effort to connect those workers with what is rightfully theirs, the agency created the “Workers Owed Wages” search, http://webapps.dol.gov/wow/. The website allows workers to search for the money owed to them by inputting their employer’s name. The department only holds back wages for three years. If, after three years, the worker does not receive their money from the department, it goes to the United States Treasury.

Other resources• Call the U.S. Department of Labor’s Wage and Hour Division at 1-866-4US-WAGE (1-866-487-9243) toll-free for information and a helpline, available 8 a.m-5 p.m. weekdays.

• The U.S. Department of Labor’s Employment Laws Assis-tance for Workers and Small Businesses advisers are a set of interactive, online tools to help employers and employees learn their rights and responsibilities under federal employ-ment law, http://webapps.dol.gov/elaws/about.html. The site says each “adviser” mimics an employment law expert by providing tailored information based on the user’s indi-vidual situation.

• A U.S. Department of Labor fact sheet outlines the investi-gatory process used in the Midwestern College Town Initia-tive. The webpage, www.dol.gov/whd/regs/compliance/whdfs44.htm, includes procedures and possible litigation options, and can even connect users to a “Know Your Rights” video series.

• Indiana Department of Labor’s online wage claim form, www.in.gov/dol/2734.htm.

“I think wage theft is prevalent. I think it happens a lot more than people realize or would estimate that it happens. But employees have to know the law, and in some cases — particularly in cases of undocumented workers — they have to make the calculation to see if it’s worth saying anything.”ROB HICKS, an Indianapolis labor and employment attorney

LOCAL | THE HERALD-TIMES | FRIDAY, JANUARY 27, 2017 | A5

The results of an ongo-ing federal Department of Labor investigation into Fair Labor Standards Act and other wage violations in Bloomington are listed below. As part of the labor department’s Midwestern College Town Initiative, investigators requested records for 10 food ser-vice and hospitality indus-try establishments. With amounts owed ranging from more than $150,000 to $0, each businesswas found to have at least one violation of wage and hour regulations.

El RancheroEl Ranchero’s two loca-

tions in Bloomington and a third in Spencer were the worst violators in this investigation. According to Scott Allen, the U.S. Department of Labor’s regional director for public affairs, El Ranchero was not maintaining appropriate records for the number of hours worked for servers, bussers, dishwashers and cooks; not paying servers for all hours worked; and not paying an overtime premium of time and a half to nonsalaried kitchen staff and bussers for time worked more than 80 hours in a two-week period.

At the 2100 S. Liberty Drive location, Depart-ment of Labor investiga-tors found 21 violations, with 11 employees owed back wages totaling $57,260. For the location at 3615 W. Ind. 46, investigators found 15 violations involv-ing seven employees, incur-ring $29,608 in back wages. Finally, at 405 E. Franklin St. in Spencer, investigators found 23 violations, earn-ing 12 employees $63,378 in back wages. According to Allen, the total damages of $150,246 across the three properties have been paid in full.

Several conversations with the restaurant’s cur-rent owner, Meinardo Cris-tobal, resulted in a “no com-ment” response.

Asuka Asuka Japanese Steak-

house’s violations are a result of the employer only paying employees based on scheduled hours, and not the actual number of hours

worked. The owner also did not pay nonexempt sala-ried employees overtime premiums. Investigators found 24 employees who worked at the 318 S. Col-lege Mall Road restaurant deserved $6,117.55 in back wages. Those back wages were the result of 24 viola-tions. As of Jan. 6, Asuka had paid $5,802.69. Accord-ing to Allen, the amount of back wages owed and the restaurant’s ability to pay both factor into how long an employer has to pay in full.

“It’s not our job to make businesses go out of busi-ness; it’s our job to protect the workers and get the back wages owed to them,” Allen said.

Repeated attempts to contact the business’s own-er, Ming Chan, were unsuc-cessful.

Malibu GrillIn terms of back wages,

Malibu Grill at 106 N. Wal-nut St. is the next- high-est offender on the list. The restaurant was cited for deducting around $60 from servers’ paychecks to pay for employee uni-forms. That deposit, Mal-ibu Grill president Rich-ard Coombes said, would be returned whenever an employee left the restau-rant’s employment. Where that practice violated labor laws was in instances in which the uniform deduc-tions lowered servers’ hourly rate of pay to below the federal minimum wage.

That rate is $2.13 per hour for servers, excluding tips. Malibu Grill was also cited for failing to maintain accu-rate records of the number of hours a nonexempt chef worked.

While the total amount owed in back wages was $2,725 owed to 48 employ-ees for 50 violations, the restaurant wound up pay-ing twice that amount in liquidated damages, bring-ing the total amount paid to its employees to $5,450.

According to flsa.com, liquidated damages are a doubling of owed back wages paid to affected employees in lieu of inter-est. Employers are able to avoid liquidated damages by proving that they “acted in good faith in failing to pay for off the clock work, and that it had a reasonable basis to believe that it need not pay for off the clock work.” Good faith, in rela-tion to the Fair Labor Stan-dards Act, requires employ-ers to have investigated the application of the act to particular employee types, according to the website.

The website continues to say liquidated damages are the rule, not the excep-tion, and that employees normally are entitled to liq-uidated damages. Coombes and the restaurant’s former managing partner, John Bai-ley, understood liquidated damages to be standard operating procedure, but Allen said Malibu Grill was the only one that incurred such charges as part of the

Bloomington investigation.Allen contested the

website’s definition of liq-uidated damages. When asked for a definition of the term and why one business might be given liquidated damages over another, Allen wrote in a follow-up email, “We make a deter-mination on a case-by- case basis after consultation with our solicitor’s office.” No further explanation was made available.

TravelodgeTravelodge, at 2615 E.

Third St., was penalized for six violations having to do with maintaining appropri-ate records for the hours that housekeeping staff worked. At that location, four employees were found to be owed $2,363 in back wages, and as of Jan. 6, the business had paid $2,117.

Repeated attempts to contact the ownership at that business were unsuc-cessful, as representatives from the hotel repeatedly said the owners were out of the country.

SummerHouse at IndianaDocuments provided

by Allen list the former SummerHouse Inn motel as one of the Blooming-ton businesses in viola-tion, despite the motel’s 2013 demolition. Official Department of Labor docu-ments list SummerHouse at Indiana as the offender. Regardless, Renaissance Hospitality LLC at 4501 E. Third St. operated as the owner of SummerHouse Inn and currently operates as owner of SummerHouse at Indiana apartments.

The company had to pay one employee $321 in back wages for three violations, in which the employer did not pay a non-exempt leasing consultant an overtime premium. Eric Dainton, general manager for Renaissance Rentals, said the violation was a basic misunderstanding of regulations that define exempt and nonexempt salaried workers. Accord-ing to Dainton, the vio-lation occurred when a person they considered an assistant manager worked beyond 40 hours in a week. Dainton said the person’s pay was above the mini-mum salary floor required to be an exempt salaried employee; the employee had managerial duties and had input on policy, but was missing a key factor in being exempt from earning overtime premiums.

“I think the sticking point was she didn’t spe-cifically have two people she was tasked to manage, and that’s why we got this violation,” Dainton said. “It’s a little disheartening to see we’re put in this list with other companies that actu-ally maybe did maliciously do something wrong.”

Dainton said the busi-ness has paid those back wages in full, and was happy to do so. “We understand now, more clearly, exact-ly what it means to give somebody salary and not be eligible for overtime,” Dainton said. “If they don’t meet those parameters, we now have them as hourly and pay the overtime.”

DeAngelo’sItalian restaurant DeAn-

gelo’s, at 2620 E. Third St., received six violations, including some that involve placing underage workers in harm’s way. DeAngelo’s was cited, like Malibu Grill, for deducting the cost of uniforms from employee paychecks. Furthermore, DeAngelo’s was cited for child labor violations. The restaurant worked a 15-year-old hostess beyond the state-regulated allow-able hours and allowed a 16-year-old to operate a meat slicer, which vio-lates the federal Hazard-ous Occupations Order for employees younger than 18.

With regard to the uni-form issue, six employ-ees were paid back wages totaling about $108, with $79 of that fee having been paid by early January. As a result of the child hazard-ous occupation violations, the restaurant also incurred what’s called a civil mon-etary penalty, which is an additional fee paid to the federal Department of Labor. According to Allen, that fee was $975, bringing the total amount levied against DeAngelo’s in this investigation to $1,083.

Gerry DiNardo, co-own-er of DeAngelo’s, main-tained the allegations of a 16-year-old worker oper-ating a meat slicer have never been confirmed. That $975 penalty was much lower than the maxi-mum allowable penalty of $12,080. DiNardo said the amount came about due to the discrepancy between his account and the inves-tigator’s charges. Allen said the mild nature of the offense was also a factor in the relatively low level of the fine.

Days InnDays Inn was the final

offender to owe money on the list of closed Blooming-ton Midwestern College Town Initiative investiga-tions, with 11 total viola-tions.

While hotel owners are within their rights to pay housekeepers a standard rate per room worked, that amount must total at least $7.25 per hour. In the case of Days Inn, the employer failed to do so, and there-fore did not pay housekeep-ing staff minimum wage. Allen said in addition, the employer paid overtime premiums to some hour-ly employees, but not for those housekeepers paid by the room.

As a result, seven employees at the 200 E. Ind. 45/46 Bypass Days Inn were owed $2,603. As of early January, the employer had paid $2,505 of those back wages. Repeated attempts to contact Days Inn man-agement over several weeks were not successful.

HuHot Mongolian GrillHuHot Mongolian Grill,

which opened its eastside restaurant in 2015, was the only business to not owe any back wages or see any fines as part of the Bloomington phase of the Midwestern College Town Initiative.

Despite the lack of mon-ey owed, HuHot still was cited with a record-keeping violation that did not gener-ate any fines.

Local businesses found to owe up to $150,000SHORT CHANGED: A SERIES ON LABOR ABUSES

H-T Report

More in the seriesLOCALSome workers particularly vulnerable | PAGE A1

H-T FILE PHOTO

El Ranchero, a Mexican restaurant with two locations in Bloomington and one in Spencer, had the largest amount of back wages owed to its workers. Across three properties, the business owed its workers $150,246.

H-T FILE PHOTO

Malibu Grill was found to owe back wages totaling $2,725 to 48 employees for 50 violations, but the restaurant wound up paying twice that amount in liquidated damages, bringing the total amount paid to its employees to $5,450.