Illinois

On a breezy Friday, Elda Burke and a co-worker waited at Chicago’s O’Hare International Airport for a plane to arrive from India. Onboard, there was an elderly couple who would need her help getting through customs, baggage claim and to the curb to hail a cab.

Burke is one of the people who push wheelchairs from gate to gate for people who are disabled or elderly.

It’s a job where workers rely on tips, though many customers don’t know it. And federal law prevents workers from asking. It had been a particularly slow day for tips, and Burke hoped this incoming couple could change her luck. But by the end of her eight-hour shift, she had only $11 in tips. That, along with what she earned each hour, made her take-home less than the state’s $8.25 hourly minimum wage.

But when Burke received her paycheck, her stub showed that she had met the state’s minimum wage standards. Not only was her employer underpaying her and reporting an inflated tip wage to the Internal Revenue Service, but Burke said she would have to pay income taxes on money she had never received.

“I don’t think it’s right. [The company] is taking money from our check,” she said. “They don’t even want to pay us minimum wage.”

Burke may not be the only airport worker impacted. Few claims have been filed in recent years with the Illinois Department of Labor against companies contracted to work for tips at O’Hare and Midway airports. But a new report by the University of Illinois at Chicago shows that of 113 tip workers surveyed, at least 62 percent of them didn’t earn a minimum wage, according to Robert Bruno, a professor of labor and employment relations who co-authored the survey.

More workers could be impacted as Chicago’s airports employ thousands of local residents, including about 1,000 who earn tips, like service workers who push wheelchairs and curbside baggage handlers. Among all workers at the airports, more than 32,281 workers at O’Hare earn less than $1,250 each month and 10,587 employees at Midway, according to 2009 local employment data.

The problem is not unique to Chicago. Officials in Los Angeles, San Francisco and San Jose, Calif., in the past 10 years successfully passed laws to force any contractors who do business with the airports to pay a living wage, which is higher than the state’s minimum wage. Two Chicago aldermen this fall have proposed ordinances that would do the same, but those recommendations have gone nowhere as of yet.

This group of workers “shouldn’t be treated as tipped employees,” said Paul Sonn, co-legal director of the National Employment Law Project, a New York-based research and advocacy labor center. “It just seems like the wrong payment model.”

These problems with underpaying workers stem from federal labor law that allows employers to label workers as “tipped,” which allows them to be paid less than minimum wage.  Employers are allowed to estimate workers’ tips to determine how much tax to withhold. But many employers use the estimation without verifying how much employees actually earn, Sonn found in his 2009 national study.

The tips that employees receive are credited toward paying the minimum wage. If the worker doesn’t bring in enough tips to earn a minimum wage, employers are required to pay the difference. But there is widespread abuse because of the complexity of these rules and since most tips are given in cash, it’s difficult to keep track, Sonn said.

That is part of the problem in Burke’s case. She earns $6.50 an hour and needs to get at least $70 per week in tips to earn minimum wage. On average, she makes $50—or $100 every two weeks. Burke said her employer, Prospect Airport Services, reported to the IRS that she earned an average of $100 to $140 in tips every two weeks, according to her check stubs. But that wasn’t often true, Burke said.

Thomas Murphy, outside general counsel for Prospect, said the company asks every employee to fill out tip forms. By reporting these tips, the company can accurately report wages to the IRS and pay workers the difference if they don’t meet minimum wage.

Murphy denied allegations that the employees are not making minimum wage. Most employees don’t fill out these forms, and it is not feasible for the company to ask every employee how much they’ve earned in tips, he said. The company assumes employees earn at least minimum wage and report it to the IRS, he said.

“It is very easy for a tipped employee to say that they didn’t make enough,” Murphy said. “But they all continue to want their jobs. If they weren’t making enough money, they would have quit.”

Tipped workers face an additional problem in that they must pay taxes on this income that they say they never earned. For example, median income for tipped airport workers is $15,500 annually, the survey found. One worker the Reporter spoke to on condition of anonymity provided W-2 federal forms for 2010 showing that he had earned $17,000 in taxable income, though he said he hadn’t earned that much.

Chicago airport workers are not alone. In Houston, for example, service airport workers earn between $5.25 and $6.35 plus tips. A handful of airports on the West Coast have enacted living-wage ordinances, requiring contractors to pay a minimum of $10 an hour without health benefits to employees, Sonn said.

Other airports have implemented similar ordinances, such as Los Angeles International Airport, San Francisco International Airport and Mineta San Jose International Airport.

Locally, freshman Alderman Jason Ervin, of the 28th Ward introduced a living-wage ordinance in October that, among other things, would require contractors who do business at both of Chicago’s airports to pay a living wage of $11.18 per hour.

In September, 3rd Ward Alderman Pat Dowell introduced a similar ordinance that would force contractors to pay the prevailing wage, which starts at $11.90 an hour for janitors.

Ervin said he’s received a lot of support for the ordinance with 30 aldermen co-sponsoring it. Dowell’s ordinance has 15 aldermen co-sponsoring it. Both ordinances have been sent to the Committee on Workforce Development and Audit.

The Illinois Department of Labor is investigating three minimum-wage violation cases filed in 2010 against Prospect Airport Services and also against Air Serv Corporation, said Anjali Julka, a department spokeswoman. The status of those cases was not immediately available.
Burke has been working for Prospect for nine years. She, along with a group of Prospect workers, decided to form a union and report Prospect to the Illinois Department of Labor. At the beginning of 2011, the workers began talks with SEIU Local 1 and are still in the process of starting a union.

Prospect settled a class-action lawsuit in 2009. The lawsuit was filed a year earlier by two employees at O’Hare but benefitted plaintiffs in other cities. Workers who handle curbside check-in accused the company of not paying them minimum wage.

The lawsuit was settled out of court in 2008. Prospect agreed to pay $355,000, according to court records. Prospect workers at O’Hare received $109,203, according to the records.

Marc Siegel, the lawyer representing workers in Chicago, declined to provide details about the settlement.
Service airport workers say they aren’t asking for much—just fair wages.

“We are only asking for minimum wage and one paid sick day. That’s not much. We are just trying to survive,” Burke said.

http://www.chicagoreporter.com/infographics/2012/01/reaching-minimum-wage

mzamudio@chicagoreporter.com

CHICAGO, Ill. — Every day she goes to work at O’Hare International Airport, Elda Burke faces the same dilemma.

Burke, 30, works as a passenger attendant at the airport, escorting the elderly and disabled to and from their gates by wheelchair. Even though the airlines describe this as a free service, Burke’s employer has her working partly for tips, which is why her base pay is a low $6.50 an hour, somewhat like a restaurant server’s, rather than the typical Illinois minimum wage of $8.25.

But unlike diners at a restaurant, many of the passengers Burke will be escorting on their holiday travels this week won’t realize she’s working for tips — and by federal law, she won’t be allowed to tell them.

“We cannot say anything,” Burke says. “If we do that, they can fire us.”

Burke works for Illinois-based Prospect Airport Services, Inc., a company that has contracts to supply service workers at O’Hare and other airports around the country. Prospect and similar contractors often pay their workers like Burke at a reduced rate before tips, which allows them to shift a portion of the salary burden to passengers. Such a pay scheme is perfectly legal, so long as the employer makes up the difference whenever a worker comes up short of the minimum wage after tips.

But several attendants at O’Hare claim their pay often works out to be less than the legal minimum, an issue that lies at the center of an ongoing unionization push among service workers at the airport. The Service Employees International Union has been trying to organize workers at O’Hare and Chicago’s other airport, Midway International, this year.

SEIU officials say a union could help airport workers earn a living wage. They note that many have not seen raises in years and don’t have paid vacation or sick days, even though they carry some security responsibilities, like checking the cleaning crews who enter planes. Burke says she started out at $5 per hour in 2002 and has only received a $1.50 pay bump in her nine years. She also says she has gone without health insurance the entire time because the company plan is too expensive.

“A lot of them are paid poverty wages, in some cases below the minimum wage, and they have no access to affordable health care insurance,” says Izabela Miltko with SEIU Local 1. “They’re organizing to have a dignified workforce and to win higher wages.”

Tom Murphy, general counsel for Prospect, says that the company has been following all state and federal laws, and that the complaints from workers like Burke amount to “a union ruse.” A handful of workers recently filed labor-law complaints against the company with the state labor department, though a subsequent inspection of the company by officials found that the company was in compliance with minimum-wage laws, Murphy notes.

“For years they’ve always gotten paid well more than the minimum wage,” Murphy says. “Their paychecks match the law. I don’t know what more we can do.”

A labor department spokesperson says the state is currently investigating the allegations.

Workers who don’t earn the minimum wage are supposed to fill out “tip sheets” detailing how much they earned in tips and how much they’re owed by their employer, if anything. These sheets are rarely if ever filled out, Murphy says, because workers do in fact take home sufficient pay.

But Burke and some of her colleagues at O’Hare say many workers don’t fill out tip sheets because they feel their supervisors won’t deal with it or because they don’t want to be seen as not pulling their weight. Several of them told HuffPost that they often don’t earn the $1.75 in tips each hour that they’re expected to. According to a survey of workers done by the SEIU, 86 percent said there was a time they didn’t earn the minimum wage.

“A lot of people just stopped reporting their tips,” says Aaron Crawford, a 20-year-old aspiring pilot who takes public transit to O’Hare from Chicago’s South Side for each shift with the wheelchair. “They know it won’t be taken care of.”

Some workers attribute their low pay partly to the fact that they work in the international terminal, where many of the foreign travelers don’t have the tipping customs of Americans. The federal Air Carrier Access Act that requires airlines to staff attendants for disabled and elderly travelers also prevents those attendants from soliciting tips or putting out tip jars.

Waldo Gucwa, a 22-year-old student who’s been an attendant at O’Hare for three years, says that some workers who are desperate for tips try to artfully steer the conversation with passengers toward employment, in hopes that the passenger might ask if they can accept tips. Gucwa also says that many young, apparently able-bodied travelers seem to request wheelchair service as a way to bypass the lines at security, and often choose not to tip at the end of the ride. The attendants are forbidden from asking a passenger if he or she is actually disabled.

“There are days you leave here with 7 bucks, 8 bucks” in tips, says Gucwa, who said he supports the idea of a union. “When you go home and do the math, you’re not even getting the minimum wage, and that’s the reason people are getting real riled up around here.”

The O’Hare workers aren’t the first to say they’re earning less than the minimum wage escorting passengers. Last year a group of 20 workers who drive passenger carts at Dallas-Fort Worth International Airport sued Prospect. The workers claimed the company had switched them to a tipped pay schedule because it had put in a low bid on the airport contract and could no longer afford to pay the full minimum wage, according to the suit. The workers said they did not “customarily” receive tips and were required to do odd jobs on top of escorting passengers.

Worker paychecks, the complaint alleged, were “extremely confusing” and often led to a wage below the federal and state minimums. Workers said they stopped reporting their low tips because they feared losing their jobs. Prospect denied the allegations and the case was settled, according to court documents.

This summer, wheelchair escorts at Bush International Airport in Houston lodged similar allegations against their employer, Nashville-based PrimeFlight Aviation Services. The workers were earning between $5.25 and $6.35 per hour before tips, and some told the Houston Chronicle that they were pressured to pad their tips out of fear they’d be punished or lose their jobs if their employer had to pay them more.

One worker told the paper she reports $80 worth of false tips each month, nonexistent earnings that she would be paying taxes on. PrimeFlight was receiving state funding for its workforce — up to $2,000 per employee — but the company was recently suspended from the subsidy program, the Chronicle reported earlier this month.

Keisha Davis, a passenger attendant at O’Hare, says she’s been trying to raise her two-year-old twins on her salary, but she can’t do it without food stamps and Medicaid. She says she was earning more money when she was pregnant, taken off wheelchair duties and paid a flat rate of $8.25 per hour. Now that she’s escorting passengers again, she too says her tips don’t boost her pay to where it needs to be.

“We really couldn’t make it without government assistance,” Davis says. “It’s like living from paycheck to paycheck to paycheck. … At the end, there’s nothing left.”

Source: dave.jamieson@huffingtonpost.com

http://www.huffingtonpost.com/2011/11/23/airport-workers-tips_n_1082307.html