Wage theft, dangerous conditions alleged in the San Jose homeless town and praised by Newsom, Liccardo

According to interviews and documents from San José Spotlight, a homeless housing project praised by state and local leaders during the pandemic is the scene of wage theft and dangerous conditions.

“This was by far the worst I have ever seen for A to Z violations,” said Mauricio Velarde, director of compliance at South Bay Piping Industry. “It’s a dead end of violations.”

The shelter in Bernal Monterey, one of three shelters the city opened for the homeless in October during COVID-19, felt like something hastily built by teenagers, union leaders said. Those in charge of monitoring moaned at the project’s delays in emails. Enforcement of the city law pointed to electrical issues. San Jose Mayor Sam Liccardo and Governor Gavin Newsom used the website as the backdrop for a press conference to help those in need during the pandemic.

So far, there has been at least one lawsuit, multiple quotes, and fines related to the project that created 78 new bedrooms for people on the street.

Non-union work

At least 20 to 30 project workers received no money owed to them under a city-wide union agreement with unions across the county, Velarde said.

Several of the project’s subcontractors violated labor agreements with the city that required them to hire trainees for the project, and lead builder Veev used a recruiting agency to hire non-union workers for less than applicable wage laws.

“You get the irony: this is a homeless shelter. In San Jose it’s so hard to live, to live dearly, and then to tear down the workers in a homeless shelter, ”Velarde said. “They perpetuate the same … they cheat on them, they cannot afford to live, etc.”

Construction rubble lies on a project site and harbors numerous tripping and falling hazards. Other workers do not wear adequate face protection and are not socially distant. Photo courtesy of Mauricio Velarde.

The emergency shelter project on Monterey and Bernal Streets cost approximately $ 11 million in public funding. This is a threshold that triggers an agreement that requires the contractor to hire union workers, hire trainees, and pay applicable wages.

But union workers cost more money. By classifying the workers on the project as “workers,” a more general, unskilled term, Veev could save tens of dollars an hour per worker in wages, Velarde said.

Attorney Tómas Margain of Justice at Work Law Group is representing a carpenter who worked on the project. Margain said the workers were owed more than $ 150,000, according to his records.

San Jose public works director Matt Cano said the city recently cited contractors for the prevailing wage and labor violations for the project.

“City workers identified violations of certain subcontractors, and breach notices were issued to contractors and partner agencies,” Cano said. “City officials have notified the authorities and provided documentation to enforce and collect the fines, fees and penalties.”

Margain said the irony is that Veev ended up paying more for each worker through the recruiting agency than if they paid them as a union worker.

“But (the recruitment agency) charged them wage taxes, insurance, and profits and overheads,” he said. “Had the job actually been within the scope of the project employment contract … the workers would have been paid correctly – carpenters would have been employed and apprentices would have been trained. (Because of this) San Jose would like these project working arrangements to be on deposit primarily for large construction projects. “

Margain filed a lawsuit against Veev on February 22nd on behalf of his client, San Jose carpenter Kahree Jahi, in the Santa Clara District Supreme Court. The lawsuit alleges that Veev failed to pay Jahi’s applicable wages, failed to allow lunch breaks, paid overtime, and violated unfair competition laws, among other things.

During the project, Jahi worked at times more than eight hours a day and more than 40 hours a week without overtime pay, according to court documents. At other times, Jahi worked more than 12 hours a day without receiving the additional pay required by law.

Veev officials did not respond to San Jose Spotlight’s request for comment.

Model project

In late summer Velarde requested documents from the city about previous violations of the project.

“We didn’t know then that the city … was going to hold a press conference with the governor (about the project),” Velarde said.

Mayor Sam Liccardo stands next to Governor Gavin Newsom in front of a new emergency housing estate on Bernal Road in San Jose on October 23.

In October, Liccardo, Newsom, and other lawmakers stood in front of television cameras touting the project’s 78 beds to shelter the homeless amid the pandemic, along with the speed at which it had been built. In a press release, the city boasted that the units “were built in a few months and at a fraction of the cost of traditional living”.

At the unveiling, Liccardo said the project would become a model for San Jose and beyond. Liccardo did not respond to a request for comment on Friday.

“By cutting red tape and using more innovative and cost-effective building methods, San Jose is showing how we can build homes at one-eighth the standard development cost in four months where it previously took four years,” said Liccardo. “This will become a national model for saving lives and rebuilding communities.”

Velarde was angry.

Security concerns

On several occasions, Velarde and Margain went to what Margain referred to as the “high school theater stage” the week before the play.

The workers did not wear hard hats, goggles or safety vests, while some others did not wear proper PPE. Velarde said he saw workers who did not wear face shields or glasses when using power tools, including a chop saw. He also documented workers on the roof of the project without fall protection.

The Habitat for Humanity project staff did not wear adequate head protection while another worker was using a welding tool with no fire extinguishers nearby. Photo courtesy of Mauricio Velarde.

“The project didn’t look right,” said Margain. “You had too many people in one small place working on top of each other to complete the project.”

Emails and letters from San José Spotlight show that there have been problems with Veev and the city since the project began.

Jim Ortbal, deputy city manager of San Jose, expressed “disappointment and concern” about the pace of the project in an email to Janit Jensen, President and CEO of Habitat for Humanity on July 6th. The non-profit organization served as the general contractor for all three emergency shelters.

Habitat for Humanity officials did not respond to requests for comment.

According to the letter, the city expected construction to be completed by July 1 and found the delays “unacceptable”. Veev has postponed its delivery date to August 24th.

“Given the importance of housing the unprotected in our city while the shelter is being ordered, we expect Habitat Veev to engage at the highest levels of ownership and management to ensure Veev’s resources and energy are focused on making the project so as soon as possible – and certainly well before the proposed August 24th, ”Orbital wrote.

Construction projects in Silicon Valley stalled in April after the county’s health authorities restricted construction to only essential projects such as emergency shelters and shelters. Uncertainty about what was allowed caused delays as well as supply chain disruptions after COVID-19 turned companies around the world upside down. The project was approved on April 20th.

Violations of the Code

Three weeks after the letter was released, public works officials in San Jose discovered additional issues as Veev rushed to complete the project.

“The electrical equipment (for the project) was installed on site, not at the factory,” Rodney Turco, the city’s chief electrical inspector, wrote in an email to Veev and Habitat for Humanity. “Additionally, the installation clearly violates the list of products and the minimum California Electrical Code for such installations.”

The site of a homeless housing project on Bernal Road, touted by Mayor Sam Liccardo and Governor Gavin Newsom, was fraught with dangerous conditions, including the lack of fall protection for workers. Photo courtesy of Mauricio Velarde.

Brian Lee, a senior civil engineer for the city, forwarded his email down the chain of command.

“For your information, I’m trying to get this under control,” Lee wrote. “These panels were supposed to be installed at the factory but were manufactured on site and did not meet electrical standards. Veev must return to the state and receive a letter releasing the city inspectors from liability before we can open phase 1. “

Twelve minutes later, James Stagi, a housing policy administrator for the City Housing Department, emailed Lee back.

“Thanks Brian. Yes, another example of Veev deviating from off-site manufacturing that we initially agreed to, ”Stagi wrote.

Fallout and Impact

The city has already fined at least two subcontractors for the project.

In an October 20 letter, Steven De La O, city compliance officer, informed Habitat for Humanity that a subcontractor, Beth’s Construction, was violating state and local labor laws.

Beth’s Construction was not hiring apprentices, and Habitat for Humanity was fined $ 200 by the city for the violation. Habitat for Humanity was also fined $ 4,700 after subcontractor Rivera’s Fine Flooring failed to hire trainees, filed a public notice, and failed to properly register as a contractor.

Habitat for Humanity has been fined instead of Veev as this is mentioned in the agreements with the city.

Steve Flores, UA Local 393 Business Manager, who represents the Bay Area’s HVAC technicians, plumbers, steam and piping installers, said he was disappointed with the treatment of the project’s staff and that these conditions were met with a Habitat for Humanity-related project had occurred.

“It’s a great organization and I feel bad,” said Flores. “But these workers are not treated properly. You see marginalized people, first generation Americans who don’t speak English and who are being exploited. They don’t know what their rights are and it sucks. “

Contact Madelyn Reese at [email protected] or follow @MadelynGReese on Twitter.

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