Cheating workers on the U.S.-Mexico border

Introduction

Cheating workers out of overtime is a common wage violation. But paying workers in the United States in Mexican pesos? Failing to pay them the U.S. hourly minimum wage? It sounds outlandish, but it’s happened. And it’s illegal. 

Since January alone, the U.S. Department of Labor has reached back-wage agreements with two San Diego companies that underpaid Mexican nationals, in pesos, for work done at warehouses on the U.S. side of the border. Mexico is the top U.S. partner in the global trade of goods. To keep transactions going, U.S. warehousing and shipping services do a brisk business, often in partnership with Mexican companies.   

The Center for Public Integrity has been publishing Cheated at Work, a series that so far has revealed employers shortchanging workers with impunity and the U.S. Postal Service cheating workers for years. 

“I don’t think it’s a stretch to say that everybody who’s employing workers should know about minimum wage and overtime,” said Labor Department trial attorney Adriana Ahumada, who handled one of the San Diego cases. “These are concepts that we all grew up knowing in this country.” 

Nonetheless, Ahumada said, labor officials have uncovered a “pattern” of Mexican nationals working at U.S. border warehouses, sometimes to prepare paperwork with import details that Mexican law requires. The workers might technically be on a Mexican partner’s payroll, Ahumada said, but officials have shown that “the American entity is functionally an employer of these employees.” 

Back in January, labor officials announced an out-of-court settlement requiring San Diego warehouse company G-Global to pay 61 Mexican workers $124,465 in minimum wages owed. Investigators found that the workers’ pay in pesos added up to a “fraction” of U.S. hourly minimum wage. G-Global also agreed to pay 59 of the workers $10,456 in overtime compensation.

In August, Ahumada filed a complaint in federal court against San Diego’s Premar Global Warehouse Logistics, and its Tijuana partner, Export Dynamics de Mexico. Labor officials announced a consent judgment on Sept. 21. The judgment orders the companies to pay 16 Mexican nationals $154,100 in overtime and $75,900 in minimum wages.

The compensation for the Mexican workers’ labor in San Diego covers a nearly two-year period between 2018 and 2020, according to the judgment. Workers were earning flat salaries in pesos and putting in an average of 45 to 51 hours a week. Labor officials calculated that they were earning between $3.38 and $5.61 an hour. The U.S. minimum wage is $7.25 an hour and overtime pay beyond 40 hours a week should be 1.5 times a worker’s normal hourly wage.    

Ahumada declined to speak about the Premar case specifically, or to say whether workers had work visas.

U.S. wage laws cover all employees, Ahumada said, so labor officials don’t inquire about workers’ immigration or visa status. Protecting all workers, she said, ensures that employers don’t hurt workers in general by legally underpaying some. Premar, whose lawyer didn’t respond to requests for comment, will also pay a $5,000 fine and participate in Labor Department outreach to educate companies about legal responsibilities. 

“The Department of Labor,” Ahumada said, “has other investigations that are ongoing.”

Susan Ferriss is a senior reporter at the Center for Public Integrity. She can be reached at sferriss@publicintegrity.org . Follow her on Twitter @susanferriss. 

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