By Laurie Monsebraaten, Toronto Star, May 12 2011

About one in three low-wage workers in Ontario is a victim of “wage theft,” according to a report being released at Queen’s Park on Thursday. The report, based on a survey of 520 casual, temporary and non-standard workers in the Greater Toronto Area and Windsor, is among the first attempts in Canada to document how often vulnerable workers go unpaid or suffer other violations of employment standards.

The findings point to the need for more government action, including better scrutiny of employers and stiffer penalties, says the report by the Workers’ Action Centre, titled Unpaid Wages, Unprotected Workers.

“The legal right to minimum wage, overtime pay and wages is not a reality for people in low-wage and precarious work,” says the report, obtained by the Star.

“The lack of protection in Ontario workplaces leaves many of the workers surveyed with little hope of getting the wages they’re owed, resulting in significant economic hardship,” it says.

The report urges Ontario’s labour ministry to proactively target employers in high-violation industries such as cleaning, hospitality, retail and construction that attract newcomers, young workers, visible minorities and other vulnerable workers.

Mexican immigrant Julio Cesar, 32, is one of them.

The Toronto father of two, who painted luxury condos in the GTA for Com-Kote Inc. (formerly Com-Kote Interiors Inc.) between November 2007 and March 2010, estimates he is owed $14,000 in unpaid wages.

“The impact has been very hard on me,” he said in an interview. “I started to use my credit cards to cover food and rent, and when I couldn’t pay off my credit cards I had to declare bankruptcy.”

Another Com-Kote painter, Eduardo Eribe, 35, says he was forced to take out a line of credit to pay rent and relied on food banks to feed his wife and 6-year-old daughter to cover unpaid wages over six months last year. He says he is owed $11,500 in wages and another $7,000 in unpaid overtime, holiday and severance pay.

“If I steal something from a store, I’m going to be in trouble,” the Mexican immigrant says through an interpreter. “What this guy is doing is the same thing. He’s a thief. And no one seems to be able to stop him.”

Com-Kote owner Frank Abbaglivo denies the allegations. He says Cesar and Eribe were subcontractors and weren’t paid because they didn’t complete their contract. The work they did was also substandard, he said.

The action centre says the workers were forced to become subcontractors to get the job and were treated like employees. The centre is helping them go to small claims court to retrieve the money because the labour ministry will only investigate claims below $10,000, another concern highlighted in the report.

The men are among 20 workers who have complained to the ministry about Com-Kote since 2007. Five were denied, suspended or withdrawn; two orders to pay are outstanding, and one is under investigation.

In March, the ministry charged Com-Kote with 12 other counts of failing to comply with an order to pay wages totalling more than $40,000.

Individual orders range from about $480 to $7,700 in unpaid wages and date back to claims filed in 2008, said ministry spokesperson Matt Blajer. Abbaglivo is scheduled to appear in court Friday over the 2008 violations.

“It was contract work and it wasn’t completed properly,” Abbaglivo said in an interview. “The ministry ruled that I had to pay them regardless. But it doesn’t make sense in my opinion.”

According to the survey, completed by workers between November 2010 and March 2011, just four per cent of workers with unpaid wages complained to the labour ministry. It means roughly 20,000 claims filed every year for unpaid work is likely just the tip of the iceberg, the report notes.

“The emphasis should be on employers complying with the law instead of on workers having to make the claim. Where is the responsibility of the employer in all of this?” said Deena Ladd of the action centre, which helps vulnerable workers file claims and advocate for change.

The centre, a non-profit worker-based organization, was instrumental in pushing the Liberal government to improve protection for temp agency workers in 2009.

Wage Theft in Ontario

The Workers’ Action Centre survey of low-wage workers found:

• 20% earned less than minimum wage

• 39% failed to receive earned overtime pay

• 36% were fired or laid off without termination pay or notice

• 34% struggled to get vacation pay

• 33% were owed wages and of those only 23 per cent were ever paid