City of Seattle Orders Company to Pay $335,000 for Violating Minimum Wage Law

Sky Chefs workers in West Seattle first complained they weren't getting the right minimum wage nearly two years ago JAMES YAMASAKI

After nearly two years of complaints and bureaucratic hangups, a group of mostly immigrant and refugee workers in West Seattle could finally be paid what they're owed by their employer.

Sponsored Library Curbside Pickup Service is Now Available! Place holds online, then schedule a time to pick up at select locations by mobile app or phone.

In a decision announced today, the City of Seattle's Office of Labor Standards has ruled that LSG Sky Chefs, a subsidiary of the German airline Lufthansa, failed to pay workers at its West Seattle facility the right minimum wage beginning in 2015.

Workers at Sky Chefs' West Seattle location assemble sandwiches and salads to be sold at 7-Eleven stores and on Alaska Airlines flights, often arriving at work around 4 am and spending much of the day inside a walk-in cooler. "It's cold all the time," one worker told me last year. That worker, who asked that I not use her name for fear of retaliation from the company, said she and her coworkers "live paycheck by paycheck." Other Sky Chefs workers I spoke to as their case dragged on in November were also afraid to allow me to use their names. Gathered at a coffee shop for a meeting with their union representative, the workers told me they would use the back pay—if they ever receive it—to pay bills and buy health insurance.

Sarah Warren—staff director for Unite Here Local 8, which represents the Sky Chefs workers—said today the union is "elated."

"This amount of money is going to have a huge impact on these workers' lives," Warren said.

You can see the full breakdown of what the company was paying workers when here, but according to the city’s findings, throughout 2016 Sky Chefs paid many workers $12.50 or less per hour when they should have been earning $13.

In total under the city's order, the company will be required to pay workers about $319,533 in back wages, interest, and damages. That money will be divided based on hours worked, with some workers getting as much as $5,000 or $7,000 and the mean worker getting about $1,900. (About 50 workers are employed at the West Seattle location at any given time, but the company has cycled through 156 workers who were not paid what they were owed in the last two years, according to documents in the case.)

The company will also have to pay the city $15,500 in fines for violating the law and “willful[ly] resisting, impeding, preventing, or interfering with the director." If the company pays the workers within 10 days, the city will waive those fines. If they pay within 15 days, the city will cut the fines in half.

But even now, the company is showing little willingness to pay its workers. In a statement to The Stranger, the company said it "strongly disagrees" with the city's conclusion and "plans to vigorously contest the findings." The company has 15 days to appeal the decision to the city's hearing examiner; it is unclear how long it could take to resolve such an appeal.

In disputing the city's findings, Sky Chefs claims the federal Railway Labor Act prevented the company from changing wages while it was bargaining with a union in 2015, when Seattle's minimum wage went up. The Office of Labor Standards doesn't buy that argument. The office cites court rulings to argue that the RLA doesn’t deal with wages and working conditions and doesn’t preempt minimum wage laws. (Read OLS's full response to the company's claims in this document.)

The finding is among the first significant and contentious orders from the Office of Labor Standards since Seattle began increasing its minimum wage on the way to $15 an hour in 2015. In a statement, the office's director Dylan Orr said: "The City of Seattle is committed to holding large employers accountable to our labor standards laws, and ensuring that workers receive all of the money they have earned."

But the office's press release announcing the order also reveals the reasons behind the drawn-out timeline for solving this case, a wait that has frustrated workers and labor advocates. Watch out for that last sentence:

The original complaint alleged that Sky Chefs failed to increase wages for its Seattle-based employees once the City’s new Minimum Wage Ordinance went into effect on April 1, 2015. OLS ordered the company to respond on April 23, 2015, but Sky Chefs chose to challenge the wage claim by arguing that it was exempt from Seattle’s Minimum Wage Ordinance under a provision of the federal Railway Labor Act. A delay in the investigation resulted when the assigned case investigator went on maternity leave and OLS transferred the case to another investigator; a delay of 2-3 months occurred when Sky Chefs changed its legal counsel. The investigation was further delayed when Sky Chefs released weekly payroll records for 165 employees to OLS investigators in a non-alphabetized stack of 14,000 individual pieces of paper, resulting in investigators’ spending 201 hours to calculate individual employees’ wages, shift differentials and overtime payments over a period of 4 months.

Warren, from Unite Here Local 8, praised the city's decision and acknowledged the Office of Labor Standards has been understaffed since its launch in 2015 but said, "It is definitely hard to understand why the hammer couldn't have been brought down sooner."

"It's hard to imagine it would take almost a full two years to figure out how to get a multinational corporation to follow the law," Warren said. "I will tell you it is incredibly difficult to explain to 50 refugees and immigrants how it could take the city this long to enforce the law."