Matt Rota
The Sun Prairie Woodman’s store is visible from U.S. Highway 151. The size of a mega-church or a shopping mall, the building glows in the suburban midnight gloom as you approach. Every night around this time, four workers pull into the nearly empty parking lot and enter through the gleaming double doors. Their first stop is to the left, near the customer service counter, where they sign in. Then they slip into the maze of brightly lit aisles, sweeping, mopping and scrubbing the store until 8:30 a.m. They work between five and seven nights a week.
Woodman’s is advertised as “employee owned,” but none of these custodial workers are Woodman’s employees. Their aprons and timesheets both say “Midwest Maintenance Group,” the name of an Illinois-based contracting company. But technically they don’t work for MMG either. On paper, they are independent contractors, the final link in a tangled and informal chain of out-of-state contractors and subcontractors.
Raul Sanchez was one such worker. “I was never under a contract,” says Sanchez, an undocumented worker who has been given a pseudonym for this article. “When we started, we filled out an application with Midwest, but then our checks were coming with a different name.”
This largely hidden Dane County workforce, the norm at most big-box retailers, works for low pay and no benefits, and has tenuous legal recourse when workplace violations occur.
“That story is about the employers that are essentially willing to move around the rules, and the employers that have to compete with them,” says Laura Dresser, associate director of the Center On Wisconsin Strategy, a Madison-based think tank. “That pulls the whole system down.”
Raul Sanchez left Mexico City 13 years ago to join his niece in Madison. Like many other immigrants, he was looking for a better life, although he did not have any particular profession in mind.
“I worked in different companies, hotels and restaurants [in the Dane County area],” Sanchez says in Spanish, through an interpreter. “We have to find a way to work, so sometimes we have to find papers that aren’t ours.”
In April 2012, a former co-worker of his told him that there was work at Woodman’s.
Sanchez first worked at Woodman’s East. After a few weeks the store was visited by a supervisor for Midwest Maintenance Group, a company owned by William Grundhoefer and based in Schaumburg, Ill. The supervisor had Sanchez fill out an application with MMG and assigned him to Woodman’s new Sun Prairie location, with three other undocumented workers.
But Sanchez received his first paycheck, in May 2012, from a company called Commercial Janitorial Services, based in Burr Ridge, Ill.
The checks kept coming from Commercial Janitorial Services until May 2014. During that period, Sanchez never worked fewer than 40 hours per week. Forty-three of those weeks Sanchez worked 48 hours, and 18 of those weeks he worked 56 hours, translating to a shift every night of the week.
He was paid a rate of $69 per night (the equivalent of $8.62 an hour) for working from midnight until 8:30 a.m., with two 15-minute breaks. His job consisted of cleaning bathrooms, scrubbing, sweeping and mopping the store. At first Sanchez was supervised by two other MMG workers, but after about six months Woodman’s assigned its own employee, Martin, to tell Sanchez and his peers where and what to clean.
In May 2014, for unclear reasons, Midwest Maintenance Group terminated its relationship with CJS, which is no longer in business, and Sanchez’s checks began coming from a company called Northern Illinois Janitorial Services (NIJS), based in Rockford, Ill.
“They were telling us that there was going to be a new company and that we had to fill out some paperwork,” remembers Sanchez. Sanchez and his co-workers hoped this might now mean they would receive benefits. But they were told that would not be the case, since they were considered independent contractors.
Although he wasn’t getting benefits, Sanchez did get a slight raise from NIJS. He was now paid a nightly wage of $72, or $9 an hour.
Twice a month, Sanchez and other cleaners reported by text message how many hours they had worked. Although Sandro Aguirre, of NIJS, signed his checks, Sanchez only met Aguirre once, dealing instead with his supervisor, a man named Ray.
Ray and Sanchez got along at first, but after a few months some tensions developed, and Sanchez thought Ray was trying to fire him. He went to the Workers’ Rights Center in Madison to learn about his options. The center’s advisers told him that since he was working more than 40 hours a week, he should be getting overtime pay. But since he had no pay stubs, it was impossible for him to know what he was being paid for.
On Sept. 29, 2014, in cooperation with the Workers’ Rights Center, Sanchez sent a letter to William Grundhoefer asking for unpaid wages and overtime pay. He received no response.
In October, Sanchez filed a Labor Standards complaint against MMG with the state’s Department of Workforce Development, and in November Sanchez and three co-workers petitioned Aguirre, asking Midwest Maintenance Group for an hourly wage of $10 per hour, rather than a flat nightly wage. They also asked for pay stubs, health insurance and vacation time.
In early December, NIJS responded to one of the other petitioners, asserting that the workers were independent contractors, not employees (the Department of Workforce Development later refuted this claim). Furthermore, because their Social Security numbers did not match IRS records, NIJS began immediately deducting 28% from their wages. Eventually these withheld wages were returned.
Sanchez believes that the withholding was retaliatory, although he admits that the Social Security number he was using was not valid.
NIJS responded to the workers’ complaint in a letter to the Department of Workforce Development, claiming it had a “verbal agreement” with Sanchez, who they say “refused to fill and sign” a written contract. Sanchez denies that he was ever offered a contract.
On Dec. 31, Sanchez and the other petitioners were given a letter from MMG addressed to the “R&G Cleaning Work Crew,” stating that after Jan. 19 MMG would be ending its contract with a company called “R&G Maintenance,” of which no further record can be found.
The workers had never heard of this company and were getting paid by NIJS. Sanchez believes they were fired in retaliation for filing a labor standards complaint.
However, MMG’s attorney, Craig Brown, claims the opposite. In an email to Isthmus he says “Northern Janitorial has never had an agreement of any kind with Midwest Maintenance Group.” When asked about NIJS checks sent to custodial workers at Woodman’s Sun Prairie location, Brown expresses surprise.
“That is news to us,” writes Brown, who understood R&G Maintenance had been doing the work. “We have a contract with R&G that does not allow further subcontracting.... We are not jumping to any conclusions, but we are concerned.”
In a response to an inquiry from Maegan Evans at the state’s Department of Workforce Development, Grundhoefer denied any relationship with the workers.
“The persons listed in the documents do not now, nor have they ever been employed by Midwest Maintenance Group.” Furthermore, the letter adds, “We have been in business for over two decades and have never had any issues such as this, either directly or pertaining to any of the contractors we have worked with.”
The Department of Workforce Development shifted its attention to Northern Illinois Janitorial Services, eventually extracting a check for Sanchez of $171.65. Although Sanchez believes he is owed more, he did not push it further.
He now works at a downtown hotel.
Woodman’s turned to subcontracted maintenance work around 10 years ago, when the regional chain underwent a major expansion.
“We had six stores 15 years ago; now we have 15,” says Clint Woodman, vice president of the family-owned business. “As you become a bigger company you become more specialized.... As you grow you concentrate.”
That specialization led Woodman’s to begin contracting out many routine jobs, such as sweeping the parking lot, doing the laundry and cleaning the bathrooms.
“We employ people to sell groceries,” says Woodman. “If it’s more specialized, then someone else can do it and manage it better than we can.”
Woodman’s is not alone in using subcontractors, and there’s nothing illegal about the practice.
“I’m fairly confident that the majority of large retailers do their janitorial and maintenance services this way,” says Brown, the attorney with Midwest Maintenance Group.
This prevalence of contracted labor was facilitated by an influx of immigrant labor from Latin America, says Dresser.
“There was a growing population of workers who maybe didn’t understand that they did have rights [or] what those rights would be,” Dresser says. “Even if they understood the rights perfectly, their fears about documentation status made them hesitant to pursue their rights as workers.... They could be taken advantage of because they weren’t in a position to demand things from their employer.”
Dresser says these changes are not limited to immigrant workers but extend to all low wage earners doing work for temp agencies.
There is also a risk, says Dresser, of employers using contractors as a way to drive down labor standards without being liable. Stores hire contractors for their custodial needs; these contractors then subcontract out their work to companies who hire workers often misclassified as “independent contractors.”
“There’s a consistent obfuscation of employment relationship that is happening down at the bottom,” says Dresser. “[Companies have] these people who clean, but they don’t work for [those companies], they work for this agency...and then both [companies] are like ‘no, you control the terms of employment,’ ‘no, you control the terms of employment.’ And the employee has a hard time even really knowing where the fight is.”
Patrick Hickey, director of the Workers’ Rights Center, is more brutal in his assessment.
“Rather than pay their employees a decent wage, [a lot of companies] get temp agencies to compete for who can pay the least, and charge the least, for landscaping or food service or janitorial service or things like that,” says Hickey.
The subcontractors are technically responsible for worker conditions, but the companies that work with them bear responsibility as well, Hickey says.
“[Big-box companies] don’t even accurately assess whether the contract that they’re bidding out can be done legally for the amount that they’re willing to pay,” adds Hickey.
These problems can be compounded for workers when their immediate supervisors, the subcontracting companies, turn over frequently.
Some companies, Hickey claims, will change names frequently. “They may have a bunch of wage claims or worker’s comp claims against them, then they just switch,” Hickey says. “All the liability, and all the problems, just disappear with that company, and you see the same players have half a dozen companies that they might be running, as a way to play this game, and get away with this stuff.”
Matt Rota
‘You have to be competitive to run a business.’ – Clint Woodman
Clint Woodman thinks highly of the men and women who clean his family’s stores. “We have a steady workforce that does our janitorial, and they’re great guys, they get along with all of our employees at our stores, and what I know is that they’re paid very well,” says Woodman, who did not know the specific rate workers make.
But he doesn’t view them as his responsibility. Asked about Woodman’s custodial workers working 13 or 14 nights every two-week period, Woodman replies, “That’s not our business, so I wouldn’t know how their employees are set up.”
A worker at Woodman’s customer service desk shows Isthmus documents with its pay rates, with the starting wage for a third shift “utility clerk,” or maintenance worker, being $9.95 an hour, with a 50-cent raise after six months. Based on this figure and not accounting for contractors’ overhead, Woodman’s saves approximately $79.20 per night on custodial work at each store, compared to the $69 a night wage Sanchez was earning.
Woodman is unaware that MMG subcontracts out its work. He also “couldn’t speak to” questions about any cost parameters Woodman’s sets for its custodial contracts.
“I think it’s a market price,” says Woodman. “They have to charge what they need to run their business and be competitive in that marketplace.... You have to be competitive to run a business.”
Hickey is unsympathetic.
“The big-box stores can kind of shrug their shoulders and say, ‘well, we’re not breaking the law, we’re just doing what you do in the economy; we’re not responsible for the fact that we have these undocumented workers who are cleaning our stores, and who are not earning enough or getting any benefits to survive on.’”
Dresser understands the market logic of this system, where companies “do what they do best, leaving those other things to other people.” But she says it also creates problems.
“Leaving those things to other people means allowing others to break the law so you don’t have to, or degrading a kind of standard that we should have been upholding,” she says.
When a company allows workplace standards to degrade, it makes it easier for competitors to do the same, she adds. “The theme I try to emphasize is the structure of demand,” adds Dresser. “We make people desperate so that they must take these jobs. There were desperate people 40 years ago, but we didn’t run the bottom of our labor market like this.”
Midwest Maintenance Group denies responsibility for any infractions that may occur at its client sites and views itself as a facilitator. The company is a small contracting firm, with about 200 client sites and between 800 and 1,000 people working indirectly for them through their subcontractors.
“The whole point is that we go out, we get the contracts with the various sites and facilities, and we make sure we’re able to fulfill those contracts,” says Brown, MMG’s attorney.
He acknowledges that there is a very high turnover rate for MMG’s subcontractors, or “affiliates,” in the Madison area.
“Madison has an extraordinarily low unemployment rate, and your labor pool relative to the number of jobs has diminished significantly,” says Brown. “A lot of former affiliates simply don’t have the headcount to fulfill what’s required of them, so that’s causing more turnover than anything else.”
So who does Brown think is responsible for worker conditions and pay?
“The immediate employer of that worker would have that direct liability,” says Brown. “As business models go, it’s more cost-effective to do it this way.”
No subcontracting companies known to have overseen work at Woodman’s could be reached for comment.
Martin, a short man with a pompadour and a thin mustache, one night this spring walks the sprawling Sun Prairie Woodman’s store wearing the grocery’s bright red uniform shirt. As a Woodman’s employee, his job is to supervise the custodial workers directly, a role that undermines the argument that these workers are truly independent contractors.
Martin — who would not give his last name — remembers Sanchez and the others who were fired at the same time as good workers, and is unclear about what led to their departure.
Unlike Martin, “Jose” and “Rosa” wear the navy blue aprons of Midwest Maintenance Group. They believe they work for Midwest Maintenance and are unaware of any subcontractor that might be involved, even though Midwest doesn’t directly oversee any janitorial workers. Jose and Rosa have each worked at the Woodman’s in Sun Prairie one month, after the last cohort of employees all left.
Jose’s timesheet — which is visible near the customer service desk — says he was here at midnight, although this reporter saw him cleaning at 11:40. In Spanish, Rosa says her biggest problem with this work is the low salary, but still she is glad for the work.
Dresser understands.
“In almost any instance, you can never say, ‘The world would be better tomorrow without these jobs,’” says Dresser. “But, societally, there are questions about what we tolerate.”
