Last March, the Palo Alto's elected officials heard an appeal from workers who spend plenty of time in City Hall but who hardly ever appear at City Council meetings.

The topic was wage theft, as experienced by janitors who work for the company SWA Services Group, which has been under contract to clean Palo Alto facilities since 2017. The janitors had recently learned that they had not been getting their contractually required raises. They and their allies were asking the city to do something about it.

Speaking through an interpreter, Magnolia Lucatero, an employee of SWA, told the City Council at the March 21 meeting that the company is failing to pay its workers the 3% raises that they're owed under the contract.

"Sometimes they even lower our wages," Lucatero said. "And we don't even really understand how our PTO (paid time off) works or if we've entitled to sick days. They told us we're not entitled to sick days."

The issue may not have surfaced at all if not for the work of the Maintenance Cooperation Trust Fund, a statewide watchdog group that advocates for janitors. In April 2021, the organization issued a report that was based on 246 surveys and that detailed labor abuses involving janitors across the state. Janitorial employers, the report concluded, "are under intense pressure to cut labor costs, particularly during the pandemic when clients are exerting pressure on janitorial companies to reduce overall costs. These factors create an incentive for janitorial companies to not just reduce wages and benefits as much as possible, but also to dodge their workplace safety responsibilities, such as providing workers with PPE, effective cleaning materials and training."

The organization, which regularly conducts field visits to talk to janitors, found incidents in which janitors were denied paid time off even after they tested positive for COVID-19. In one southern California grocery store, one janitor reported that there was an outbreak of COVID-19 among her co-workers. The employer reportedly made them work even after they tested positive and threatened to fire them if they took time off, according to the report.

The MCTF also found cases in which employers failed to provide janitors with personal protective equipment like gloves or masks, even as COVID-19 cases were spiking. And many had failed to educate janitors on the hazards of new and potent cleaning chemicals and to enact safety measures to protect them from the negative health effects of these chemicals. Of those janitors who reported using new chemicals since the start of the pandemic, 30% said they did not receive any safety training, according to the MCTF report.

Cassie Peabody, legal director for the MCTF, said in an interview that her organization learned about the problems experienced by Palo Alto janitors when it toured local facilities as part of its field research.

"We go out and meet janitors during their shift to see what their working conditions are like," Peabody said. "As a result, we met janitors who work at SWA who told us they thought they're not getting paid the amount they thought they were getting paid. They were anticipating raises but they didn't get raises."

The organization investigated the claims of seven SWA employees, reviewed their pay stubs and concluded that they did not get the 3% raises that they were supposed to receive in 2018, Peabody said. The MTCF filed a complaint with the state Labor Commissioner's Office, Peabody said. That complaint remains under investigation, she said.

In addition, workers also filed individual claims pertaining to unpaid overtime, Peabody said. SWA settled those claims in August, she said.

Prompted by complaints, the city did its own investigation in 2021 and verified that SWA indeed failed to give its workers the 3% annual increase that was required by the contract, according to a memo that City Manager Ed Shikada submitted to the City Council in June. City officials chalked this up to a disagreement between the city and SWA over what the 3% increase actually represents. Janitors and city officials believed it pertains to wages, while the company argued that it refers to overall costs of providing janitorial services.

SWA, for its part, has consistently maintained that it has complied with the terms of its original request for proposals and rejected the idea that it was involved in wage theft. Esmeralda Rodriguez, the company's human resources manager, noted that the original terms called for wages to be paid at the "minimum wage rate only."

"Not only did SWA pay above minimum wage, we also provided additional benefits not required by the RFP (health benefits, paid time off, 401K participation," Rodriguez said in an email response to this news organization.

Solomon Wong, the company's CEO, told the city that SWA understood the 3% increase to pertain to labor, overhead, materials and supplies, not just wages, according to a letter that he sent to the city on April 6, 2022. Wong also noted that janitorial supplies saw a cost increase of between 15% and 25% over the course of the pandemic. The company has also seen a rise in its insurance costs, as well as in costs related to mask mandates, which were not planned for in the original contract.

"From SWA's point of view, we were and are in compliance with the contract," Wong wrote on April 6, a week after he met with city officials to discuss the wage dispute. "However, the points that were brought up during the meeting, regarding the language of the contract, allows us to see the City's perspective and how it appears to read that the increase was to labor (wages) specifically."

Wong noted in the letter that SWA has taken steps to bring all current employees to appropriate wages, effective April 1, 2022.

Despite the allegations, the council voted in June to extend the SWA contract by six months. With expiration looming last month, council members approved another six-month extension last December. In his report to the council, Shikada wrote that "certain discrepancies between the documents and past communications between SWA and staff may have contributed to SWA's misunderstanding of the contract language."

Shikada's report also noted that even though SWA had raised wages in April 2022, it did not address the back wages that it owed to its workers prior to this date, according to a report from Shikada. To address this discrepancy, the city agreed at its Dec. 19 meeting to contribute $97,112 in public funds toward the back wages, half of total amount owed.

The only council member who opposed the move was Greg Tanaka, who objected to both the city's contributions to recovering owed wages and to the new $1.2 million contract for an additional six months of services.

"They should be on the hook, not us," Tanaka said, referring to SWA. "Why the heck are we giving them $1.2 million at all? We should find another vendor."

Since the wage discrepancy came to light early last year, the council has been under growing political pressure to address the issue. In June, state Sen. Josh Becker submitted a letter urging the council to look into claims of wage theft and "ensure that the workers were not victimized." He also asked the council to consider legislation to combat wage theft.

"It is critical for local governments, like the City of Palo Alto, to adopt a higher level of standards for these contracted services," Becker, D-San Mateo, wrote in a June 15 letter.

Both Becker and state Assembly member Marc Berman, D-Menlo Park, encouraged the city to collaborate with the Service Employees International Union-United Service Workers West (SEIU-USWW), a union that represents more than 40,000 janitors, security officers and other service workers. Members of the union have attended recent council meetings to lobby for stronger labor standards for janitorial workers. In December, José Luis Pavón, a political organizer with SEIU-USWW, asked the council to adopt new policies that would ensure fair labor practices for all employees.

"We are strongly suggesting that the city adopt a responsible contractor policy that will increase labor standards but will also increase assurance and protect the City of Palo Alto from other contractors who commit labor violations and can be a liability to the city," Pavón said.

Berman, a former Palo Alto council member, wrote in a July letter that it is critical for local governments like Palo Alto to adopt "a higher level of standards for these subcontracted services." Rep. Anna Eshoo, D-Palo Alto, also waded into the issue in September, when she submitted a letter expressing concerns that "some of the affected employees allege that they have not received the back wages that are owed."

"Given the prevalence of reported exploitation in the janitorial industry, employers must be vigilant to ensure that janitors are treated fairly," Eshoo wrote.

Now, the city is preparing to take a more drastic action. On Monday, the City Council will consider a proposal from Vice Mayor Greer Stone and council member Pat Burt to adopt stronger rules for janitorial contracts. Specifically, the new rules would require any future contractor to be a firm whose employees are covered by a collective bargaining agreement and that their wage rates and benefits should be no less than prevailing wage and benefits, as established by the California Public Utilities Code. Mountain View had adopted such requirements for its own janitorial contracts in 2020.

"As a City, we have an interest in ensuring we have uninterrupted operations, high quality services, and that contracted workers performing services for the city are treated fairly," the memo from Stone and Burt states. "We recommend the City Council direct staff to address the issues facing the City's subcontracted janitors by developing a policy that would heighten standards where needed within the Janitorial Services RFP for the City Council to adopt for the upcoming and future such RFPs."

In an interview, Stone said that the goal of the proposal is to help ensure that local workers receive a livable wage.

"We talk a lot about providing opportunities for those to be able to serve our community, to be able to live in the city to be able to work with dignity, to be able to have a living wage," Stone said in an interview. "There's so much talk about that, not only in Palo Alto but regionally. But traditionally we don't pay people enough to do that.

"At the end of the day, a livable wage in order to be able to afford to live in or near Palo Alto is critical."

The reform will come at a cost. If the proposal is adopted, wages for custodial workers would have to be no lower than $20 per hour, up from the current level of $17.50. When benefits like sick days, holiday pay and pensions are taken into consideration, the new wage would be about $29.98 per hour, a 44% increase from the current level of $20.84, according to a newly released analysis from the Department of Public Works. This will necessarily mean more expensive contracts for janitorial services going forward.

Stone argued, however, that moving ahead with the change is the right action. It's particularly important, he said, to make sure that future contracts provide protection for unionizing janitorial workers, given the history of widespread abuse that they have been encountering across the state.

"Those allegations allowed a light to be shed on this issue and to open up the opportunity for public dialogue, one that may not have happened had those allegations not been made," Stone said.

Peabody, MCTF's legal director, called the new proposal a "great step toward a more responsible contracting policy in the city." Many janitorial workers currently operate in an "underground economy" and are forced to deal with unscrupulous employers. According to the MCTF report, janitors are an especially vulnerable workforce because most of their work takes place at night, out of public sight. They get low wages and minimal benefits and the workforce is predominantly composed of Latinos and other "predominantly marginalized demographic groups."

Given the history of wage theft in Palo Alto and elsewhere, Peabody said cities need to make sure that contractors are committed to following the law and ensuring safe working conditions so that incidents like the recent wage discrepancy don't happen again.

"We're really glad that they took this issue seriously," Peabody said.