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Many of Katrina's Migrant Workers Go Unpaid

With oversight lacking, layers of subcontractors take advantage of a cash-based economy and those hired to help in the reconstruction.

September 11, 2006|Sam Quinones | Times Staff Writer

NEW ORLEANS — When attorney Luz Molina met a worker on a street corner to talk about how he'd been stiffed of wages he was owed for helping install a roof, they weren't alone for long.

As they spoke, five other men approached Molina with their own stories of work they had not been paid for.

"There's no talking to one without three or four coming up to you," said Molina, a law professor at Loyola University in New Orleans.

In the year since hurricanes Katrina and Rita, thousands of illegal immigrants have come to the region for the first time to work.

Most speak no English and often take under-the-table jobs without knowing even the names of those who hire them.

A cash-based reconstruction economy has taken root in New Orleans, and reports of worker rip-offs are common.

Molina spends her days trying to construct cases with enough detail to file in court.

"I describe it as the new Wild West of labor law, where lawlessness is absolutely tolerated," she said.

Last month, the National Immigration Law Center filed suit on behalf of 82 guest workers from Bolivia, Peru and the Dominican Republic against Decatur Hotels, a downtown New Orleans chain.

For The Record
Los Angeles Times Thursday September 28, 2006 Home Edition Main News Part A Page 2 National Desk 3 inches; 100 words Type of Material: Correction
Unpaid hurricane workers: An article in Section A on Sept. 11 about migrant laborers not being paid for the post-hurricane construction work they had done said that before hurricanes Katrina and Rita, the U.S. Department of Labor had one investigating agent covering Louisiana and Mississippi. The article also said that although more agents were sent to Louisiana, they were mostly taking complaints and had not launched investigations. The Labor Department maintained a staff of 26 in the region before the hurricanes and since then has initiated several unpaid-wage investigations and recouped more than $2 million in back wages for workers.

The suit alleges that the workers were recruited, went into debt to get here, then weren't given the work hours they were promised.

By law, they aren't allowed to work elsewhere.

"It's a system of slavery," said Luis Lopez, 34, who left a job in an architecture office in the Dominican Republic to come work for Decatur.

"You belong to the person who contracted you."

Partly to blame for the chaos, critics say, is a federal disaster-relief contracting system that breeds fraud and waste by allowing work to be contracted and subcontracted repeatedly, without much opportunity for public scrutiny of how taxpayer money is used.

Prime contractors often don't oversee how their subcontractors do the job.

The subcontractors who actually do the work, meanwhile, are so removed from oversight, critics say, that they're often tempted to hire illegal immigrants who have little recourse if they are not paid.

A case in point: suits filed by the Southern Poverty Law Center of Montgomery, Ala., against contractors Belfor USA and LVI Environmental Services, which had been awarded government reconstruction contracts.

The suits allege that the companies and their subcontractors did not pay dozens of illegal workers the wages and overtime owed them for cleaning hospitals and public schools.

On Sept. 7, Belfor USA acknowledged that many of its workers far down its subcontracting line hadn't been paid and, in a court-approved settlement, agreed to begin looking for, and paying, those workers. A Belfor attorney said the company had relied on subcontractors to pay workers and was unaware any had not been paid until the law center filed suit.

"This was something that was dropped at the subcontractor or the sub-subcontractor level," said Steve Griffith, a New Orleans attorney representing Belfor. Griffith said the company is, in turn, suing one of its subcontractors -- Florida-based Expo Services Inc. -- alleging nonpayment of workers.

LVI Environmental Services did not return phone calls requesting comment.

Failure to pay workers has become widespread in New Orleans since the hurricane.

The Southern Poverty Law Center has interviewed more than 500 workers in New Orleans since Hurricane Katrina who have had problems getting paid from contractors of all kinds, said J.J. Rosenbaum, a law center attorney. Most reported that when they were paid, it was in cash. Only in rare instances did workers get payroll checks that showed hours worked.

"Workers should be getting checks with stubs that show their hours," Rosenbaum said. "This is 2006. No one is running a cash payroll unless they're running a scam."

One problem, Molina said, is that even before the hurricanes, Louisiana had no infrastructure to deal with labor-law violations, or the challenges presented by thousands of illegal immigrants. The state has no labor office.

The U.S. Department of Labor had one investigating agent covering Louisiana and Mississippi. Earlier this year, the Labor Department sent more agents to Louisiana.

But mostly the agents take complaints and have not launched investigations of their own, a department spokeswoman said.

Another complicating factor in the labor market has been the enormous size of the federal disaster-relief contracts created by bundling together smaller ones. Bundling is intended to speed contracting and make prime contractors responsible for completing the job, paying workers, and ensuring they have safe work conditions and are in the country legally, said Jean Todd, chief of contracting for the Army Corps of Engineers' Louisiana Recovery Office.

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