New Immigrant Community Empowerment (NICE)

Labor sharks sink teeth into low-wage immigrant workers

In New York, employment agencies face few penalties for charging advance fees for jobs that don’€™t exist

When Ophelia Hernández, a 53-year-old clothing store owner from El Salvador, got working papers to immigrate to the United States, she jumped at the chance to escape the gang violence and extortionists who had forced her out of business in her native country. As she began her job search in New York, however, she came up against a different kind of extortion in the form of labor sharks. These predatory employment agencies exploit low-wage job seekers, many of whom are newly arrived or undocumented immigrants, by charging them exorbitant fees for jobs that pay less than the minimum wage — and sometimes don’t even exist.

Sitting in the small apartment in Queens that she shares with family members, Hernández recounted how she had to pay a $400 fee for a housecleaning job that lasted only two weeks and paid well below the legal minimum wage.

“I had to work more than 12 hours a day, six days a week, for just $200 after the fee was deducted,” she said, speaking through an interpreter. “After two weeks, the agency told me the woman who had been doing the job was coming back.” 

Today Hernández gets by looking after her relatives’ children — three toddlers and a 5-year-old. Her search for a more permanent job, one that pays a living wage, has been stymied by the labor sharks. “We can’t trust the agencies,” she said, “but it’s really hard to get any work without them.”

Under New York state law, only two classes of job seekers — manual laborers and domestic workers — may be charged a fee by employment agencies before being referred to an open position. Many workers who have been charged these up-front fees have found themselves, like Hernández, the victims of scams. Last month New York’s attorney general announced agreements with five agencies in the city to end predatory and abusive practices. Since this announcement, the Department of Consumer Affairs has issued subpoenas to 115 additional agencies and has begun investigations into 23. But to end the systemic issues that allow the abusive practices to flourish, advocacy groups for low-wage and immigrant workers say the law must be changed.

“Allowing the poorest workers to be charged advance fees makes no sense,” said Laura Huizar, an attorney with Latino Justice PRLDEF, a nonprofit civil rights organization. “It just creates an incentive for bad actors in the industry to exploit people.”

Many of our members report being sent to fake employers, to employers that had never contacted the agency or to employers who are not hiring.

Jessica Garcia

director of organizing, NICE

Under state law, agencies are supposed to refund any advance fees if the referral does not result in the applicant’s being hired. But a comprehensive 2012 survey conducted by New Immigrant Community Empowerment (NICE), an advocacy group for immigrant workers in Queens, found that 81 percent of respondents, who were charged an average advance fee of $122, were not placed in jobs and did not have their fees refunded.

“Agencies will go to elaborate lengths to give job seekers the runaround,” said Jessica Garcia, NICE’s director of organizing and programs. “Many of our members report being sent to fake employers, to employers that had never contacted the agency or to employers who are not hiring.”

Rosa Pauta, a 50-year-old mother of three, paid $125 to an agency in Jackson Heights in exchange for a position at a laundromat. She said she was given a paper stipulating she would work 40 hours a week for $400. But when she showed up at the laundromat, there was no job opening.

“I called the agency three, four, maybe five times, but they didn’t pick up the phone,” Pauta said. When she returned to the agency the next day to get her money back, she said, “the woman told me I probably didn’t get the job because I was too old.” The agency refused to refund the fee.

Servando Rodríguez paid an agency $120 for a plumbing job that he later learned would pay much less than the agency agreed to in his contract.
El Centro del Inmigrante (of Staten Island)

“These kinds of stories are all too common,” said Lucia Gomez-Jimenez, executive director of La Fuente, a group that specializes in community and labor organizing efforts. “But the penalties for defrauding job seekers are so low, the agencies just build it into their business model.”

In other states with large immigrant populations, including New Jersey, Illinois, Nevada and Hawaii, agencies can be charged a maximum fine of $1,000 to $5,000 per violation. In New York, where the penalty provisions have not been updated since the 1970s, the maximum fine is just $500.

Another aspect of current law that makes preying on unsuspecting job seekers a low-risk enterprise is that workers cannot take private action against an agency that has defrauded them. Wronged individuals can only file a complaint with either the Department of Consumer Affairs or the Department of Labor.

“It’s very difficult for these overburdened and underresourced enforcement agencies to efficiently deal with an influx of complaints,” said Huizar, “so workers almost never get to reclaim lost fees, never mind damages.”

Huizar recently took a client’s case to small claims court to see if that might be a successful option for workers. Her client, Servando Rodríguez, a 48-year-old construction worker from Staten Island, had signed a contract and paid a $120 fee to a Brooklyn-based employment agency in exchange for the promise of a plumbing job. When he showed up for work, the plumber offered him a much lower salary than the one stipulated in his contract. Rodríguez didn’t accept the job and asked the agency for a refund.

“Unlike most contracts I’ve seen, this one actually included the relevant portion from current business law outlining an applicant’s unequivocal right to a refund if they do not accept a job,” Huizar said. But even armed with this contract and the proof that the fee had been paid, Rodríguez did not prevail in court. “The burden of proof is on the individual,” Huizar explained, “and the employment agency was simply taken at its word.”

New York state Assemblyman Francisco Moya introduced a Justice for Job Seekers bill to protect low-wage workers.
New York State Assembly Photography

Earlier this year, New York state Assemblyman Francisco P. Moya of the Jackson Heights neighborhood in Queens in New York City introduced the Justice for Job Seekers bill. The legislation would end the practice of charging advance fees to low-wage workers, increase penalties for offending agencies and allow anyone who has been victimized by an agency to seek redress in court. “It will give prosecutors some teeth to go after labor sharks,” he said, “and it will bring fairness to people who just want to work.”

The bill passed overwhelmingly in the Assembly but has been stalled in the state Senate. Moya plans to introduce it again in the next legislative session, and he hopes that with increased awareness of agency abuses, it will fare better.

If it doesn’t pass, workers like Rodríguez, Pauta and Hernández will continue to get duped in their search the stable jobs they so desperately want.

“I’m lucky I have family to lean on,” said Hernández, as two of the toddlers she cares for clambered onto her lap. “But I didn’t come here to be a burden or to get a handout. I came here to work.”

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