Tucson approves city Labor Standards Unit, despite advocates' concerns

Tucson's city Labor Standards Unit is being set up as part of the Business Services Department, despite the concerns of advocates who pushed for an initiative that raised the local minimum wage.

Voters approved the new office in November when they passed Prop. 206, Tucson's $15 minimum wage law, by a 2-1 margin. While city officials are including it as part of an existing agency, backers said the law calls for a new stand-alone department dedicated to enforcing the measure. 

Last week, the City Council approved a proposal for the Business Services Department, usually responsible for registering and regulating local businesses, to take on the duties laid out in Prop. 206 by creating a Labor Standards Unit.

Prop. 206 specified that a Labor Standards Department would conduct investigations, audits, surveys and receive the complaints related to wage theft, when workers are denied pay that they’ve earned. Rather than a separate department, the city manager will direct Business Services staffers to take on those responsibilities.

The Tucson minimum wage will increase to $13 an hour, above the state minimum of $12.80, at the end of the week on April 1. It will be the first bump in pay to come about from Prop. 206, followed by two more increases before being set at $15 on Jan. 1, 2025. After that, the local minimum wage will be pegged to inflation.

City staff held a set of informational meetings for business owners last week to answer questions related to the wage increase and Prop. 206. Although some of the meetings were scarcely attended, business owners asked questions about how the city will judge labor complaints, what to do if there’s disagreement about the outcome of adjudication, and how the policy affects lawsuits between employees and employers.

Alongside Lane Mandle, the city manager's chief of staff, there were two staffers from Business Services, and one from the Office of Economic Initiatives to help Spanish speakers. They talked to TucsonSentinel.com about the Labor Standards Unit, and explained that it's best suited to be in Business Services because those workers already collect data like lists of business licenses and have staff that follows up on complaints and conducts investigations.

Business Services covers the city's budget operations, risk management, human resources, ensuring compliance with workplace safety standards at public work sites and general compliance by city contractors, among others.

Mandle said she "can’t think of the conditions why” they would need to devote an entire department to labor standards.

Isn't Biz Services 'employer-oriented?'

CJ Boyd, the former campaign manager for Fight for $15, the group that put the issue on the ballot and helped it pass, told the Sentinel the week before the informational meetings that he was worried about having the “employer-oriented” department take charge of the duties meant for a separate department.

Business Services shouldn’t have a problem remaining objective, staffers said. Johanna Hernandez, the deputy director of community engagement for the department, helped lead the informational meetings with Mandle. The way Hernandez saw it was that there isn’t a lot of bias in the way they work that would favor employers.

“It’s not entirely accurate to say we’re ‘employer-oriented,’” Hernandez said. “There are certain times when employers definitely wouldn’t see it that way or consider us on their side,” like when looking at their taxes.

Boyd has no beef with Business Services, saying the department “is great, this isn’t anything against them, but their job there is to advocate for employers, and the job of this (labor standards) office is to advocate for employees.”

In a Facebook post, Boyd wrote that putting an office of labor standards under Business Services “would be like if the offices of public defenders were under the office of prosecutors. It's not about one being better than the other. They need to be independent because they each advocate for different people who have opposed interests.”

He also called on the public to address City Council at their meeting last week if they shared his concerns, but no one from the public spoke on the issue. The Council voted unanimously in favor of letting City Manager Mike Ortega designate the Labor Standards Unit as a part of the Division of Taxpayer Assistance of the Business Services Department. The unit, according to their resolution, "will serve as the City’s Department of Labor Standards as provided in  the Act and in Tucson Code Section 17-86."

Boyd works for Northwest Side Councilman Kevin Dahl, who was elected in the fall on the same night Prop. 206 passed. After the Council's vote on Tuesday, Boyd didn't have any comment, noting it was getting hard to balance his role with the city and Fight for $15.

Before voting in favor of the new labor unit, Dahl made sure at that meeting to ask Ortega why it would be included in Business Services. Like Hernandez and Mandle, the city manager explained that Business Services isn’t very employer-oriented and that there might be a confusion between the Business Services Department and the Office of Economic Initiatives, which works with local businesses to create jobs and investment.

“The Business Services Department already deals with licensing businesses, it goes down the path of doing audits, we actually have a whole audit group,” Ortega said. “My thought and reason for including the Labor Standards Unit in this group is simply because I want to take advantage of the resources that we have and the expertise that we have.”

If the unit gets overwhelmed with complaints, Ortega said, he’ll “staff up accordingly.” When asked if a high workload could give way to a separate Labor Standards Department, Hernandez and Mandle similarly explained that the problem could be solved with more staff.

Choose your words carefully

The labor rights lawyer who wrote the text of the initiative that voters enacted into a city ordinance, Billy Peard, said he and others he worked with to write it “chose our words very carefully” and specified that they expected the city to staff a whole new department that’s entirely focused on enforcing labor standards.

“I’m not prepared to pass judgment” on how well the city’s new unit is able to enforce labor standards, he said, because he’s not familiar with the staff taking over the unit nor has anyone from the city has been reaching out to him, he said.

There are, however, several capabilities that he expects the labor unit to have in order to meet the demands of Prop. 206 in terms of enforcing wages and labor rights. One of those expectations is that there needs to be a director who is entirely devoted in their job to enforcing labor standards.

“It was our hope that that department be headed by a full-time individual who was fully devoted, whose job functions were 100 percent devoted, to building out and fulfilling the goals of Prop. 206,” Peard said. “We don’t think it’s a lot to ask that there be a fully devoted individual heading that department, whether you call it a department, whether you call it a unit, whatever verbiage you use.”

He also pointed out that Prop. 206 specifically calls for a “Department of Labor Standards.”

As the director of Business Services, Jeff Yates will lead the unit as an office within his department. Peard said that he hasn’t spoken with Yates nor does he know his background, so he’s “not prepared to pass judgment” on Yates’ abilities either.

“I’m not prepared to pass judgment on someone whose background I don’t know. All I can say is that it was our hope the department have it’s own head,” he said. “Candidly, I don’t know the nature of the Business Services Department in terms of their existing functions within the city ecosystem. I’ve been told that Business Services fulfills many different functions in its current form.”

Peard said that staffers in the Labor Standards Unit should have training in labor law, and understand people’s rights and what legal precedents exist.

“(Labor rights and wage law) is a specific body of law, it’s a specific body of knowledge — how you measure compensable time in the workplace, how you determine whether there is or is not a violation,” he said. “There are words in the ordinance that are very specific; they’re very technical terms.”

“I don’t know what their backgrounds are or what their training has been,” he said, “but if neither Mr. Yates nor Ms. Mandle nor any of the other employees have that background or have studied that area of enforcement then I would want to ensure that the people who hold those positions have that knowledge or are given training on that, and they certainly haven’t reached out to us on that technical insight.”

'What I’m concerned with personally is the technical implementation'

Mandle did meet with Boyd and others from the Fight for $15 group a few weeks ago to talk about the public outreach campaign leading up to the first wage increase in April and the rollout of the Labor Standards Unit. Peard wasn’t a part of those talks though, as it mostly had to do with public input, he said, not with labor law.

“What I’m concerned with personally is the technical implementation,” he said. “And that requires some technical knowledge. You don’t have to have a law degree, but you have to have a few hours of study.”

Peard isn’t sure that the city’s approach to the office will work out or that it matches with how Prop. 206 is written, he said, but he’s not prepared to give any kind of legal conclusion as he tries to catch up with what the city is doing. He’s also not sure that it violates the ordinance or “whether doing it the way they’re proposing to do it is legal or illegal.”

When drafting Prop. 206, Peard tried to anticipate what the city would try to resist or do differently and said “I anticipated that the city would not be eager to devote a significant amount of financial resources for creating the department.”

Another area where Peard expected the city to challenge the ordinance was where it opens up city courts to settle lawsuits between employers and employees. City Attorney Mike Rankin published a memo in October, before the election, saying this “can have no legal effect” as jurisdictions for city courts are set by the state Constitution.

Peard disagrees, saying “just because they’ve never been used that way before, doesn’t mean that they can’t” and that city courts, which settle matters between the city and its residents, have only been limited by tradition, not law. In the same memo, Rankin called a section of Prop. 206 “unconstitutional” for prohibiting employers from requiring Social Security numbers for payment.

Peard hasn’t heard any updates about Rankin’s challenges to Prop. 206, but it’s obvious to him that the city wants to implement Prop. 206 their way, not the way Fight for $15 wants.

“I think it’s very clear to me that they’re trying to do it the way they want to do it,” he said. “We had a campaign and almost 65 percent of Tucson voters expressed their desire that this happen. I think it’s a lesson for all of us, and I take responsibility, that… we had this great electoral victory in November, but that’s not the end. We have to be vigilant if we want things to be implemented properly, the way voters intended.”

He admitted, however, that “for my part, I have not followed up with the city government.”

The long-term vision

At last week’s Council meeting, Dahl and fellow Councilwoman Lane Santa Cruz spoke about making Prop. 206 and the Labor Standards Unit “more expansive.”

“There’s a lot of worker -elated exploitation and violations that happen in our community,” Santa Cruz said. “We need a space to hold employers accountable…we need to think a little broader to protect our workers.”

One example of how Santa Cruz wanted to see the Labor Standards Unit's reach extended was by investigating the harm of check-cashing stores.

Mayor Regina Romero said she wanted the establishment of the new unit to bring about other updates to city labor policy like prohibiting cash pay practices and the mis-classification of workers and requiring employers report their payrolls. She also wants the Labor Standards Unit to handle cases of contract fraud in addition to protecting workers.

Romero repeated Ortega’s explanation about the role of Business Services, saying it’s important for the community to understand.

“It’s important, with the clarification (Ortega) provided, for the community to understand what our Business Services Department does and what it doesn’t,” Romero said. “It’s purpose is not to advocate for employers or promote economic development… with that said I think it is imperative that the Labor Standards Department be adequately staffed.”

She said she was “really happy that we're initiating this unit, and I’m looking forward to the things that we can do for worker protection.”

Ortega also voiced his eagerness about seeing what the new unit can do and his seriousness about making sure it works.

“This whole effort is really a part of the vision that the mayor and Council had established some time ago with the living wage ordinance,” Ortega said. “I have a lot of confidence in our ability to implement this. I’m watching very closely as this evolves, and if I need to add resources, I will do so very quickly…it’s my intention to look hard at this effort.”

The City Council expects Ortega to provide an update about the unit’s staffing needs and his long-term vision for it.