A controversial security firm co-owned by the brother of powerful Chicago Ald. Danny Solis (25th) has been underpaying its workers on several city-related jobs, apparently a violation of contracts and of state and federal laws, according to several of the company’s current and former employees.
Monterrey Security Consultants, a Pilsen-based business started in 1999, has been paying entry-level security guards $7 an hour, workers said, to monitor city-owned salt piles and the construction site at Soldier Field, which is owned by the Chicago Park District.
Five former and current Monterrey employees who worked on those sites said they were paid $7 an hour, and two of those workers provided Monterrey pay stubs.
Based on state law and the city contract, the security guards should have been paid the prevailing wage in the security-guard business, a figure calculated by the Illinois Department of Labor. The prevailing wage for security guards was at least $8.50 at the time the contracts were awarded, officials said.
“We expect them to pay the prevailing wage,” said Barnaby Dinges, a spokesman for the $632 million Soldier Field project, which is being financed by city hotel taxes and private interests. “We expect them to live up to the contract.”
Monterrey also should have paid its guards the prevailing wage on a $2.9 million city contract to provide security for salt piles and equipment, the city’s top lawyer, Mara Georges, said late Friday. The city recently canceled the contract with Monterrey because of an ethics dispute.
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Two weeks ago, prompted by inquiries from the Tribune and Exito!, city officials broke off their contract with Monterrey because its owners are both city employees. Under the city’s ethics law, city employees are prohibited from having an interest in a city contract.
City officials might have spotted the alleged pay discrepancy themselves, but Monterrey never turned in monthly payroll reports that are required as part of its contracts.
Georges said the city is looking into Monterrey’s payments to workers and its failure to supply payroll reports as part of an inquiry of the firm that was prompted by an investigation in the Tribune and Exito!, a Spanish-language weekly that is published by baiduhai Co.
The report, which ran in both publications on Thursday, showed how Monterrey prospered despite regulatory problems with the state, misleading statements to the city and the professional and financial woes of the company’s president.
If the city determines that workers were underpaid, Georges said it might seek penalties against Monterrey.
Monterrey President Juan Gaytan, a Chicago police officer, could not be reached for comment. His partner, Chicago firefighter Santiago Solis, is the younger brother of Ald. Solis, a close ally of Mayor Richard Daley.
Monterrey won both its contract with the city and at Soldier Field by submitting the lowest bid. Monterrey offered such a low bid on the city contract–$11.49 an hour–that several competitors questioned how it could pay the prevailing wage of $8.50 an hour, plus benefits, and still turn a profit.
“They can’t do it at that price,” said Wyomia Ellison of Network Security, which bid $17.44 an hour. “I knew I had to pay the prevailing wage. If I don’t pay what they say, they come back and make me pay and put me out of business.”
Tami Soto, of Luna Security Services, another bidder, said city officials should have paid closer attention to what Monterrey was paying its workers.
“I would have thought [the city] would have been monitoring this,” she said.
Besides the low pay, Monterrey workers complained that they weren’t paid overtime or provided with medical benefits or vacation, as required by contract provisions and state law.
“I worked 120 hours in two weeks,” said Marcos Garcia, who has worked for Monterrey since February. “Sometimes I worked 18-hour days…They said they weren’t paying overtime, just straight time.”
Tyrone Hutchins said he too was paid $7 an hour and never received overtime, even though he occasionally worked 18-and 19-hour shifts. Hutchins, who started at Monterrey in February and was fired earlier this month, said he was often asked to fill in when other workers didn’t show up. He said he accumulated about 120 hours of overtime that was not paid at the overtime rate.
Federal and state law generally requires employers to pay workers overtime–at a rate of 1 1/2 times their regular wages–if they work more than 40 hours a week. The federal Department of Labor can go to court to recover back wages and damages.
Employers found to have violated Illinois prevailing wage requirements must pay back wages and may be hit with fines, according to a spokesman for the Illinois Department of Labor. Repeat violators may be barred from public works projects for two years.
The Tribune/Exito! investigation found that Monterrey Security has thrived on city-related contracts in the three years since it opened even though it did not have a state security license for its first 21 months and initially hid the ownership interests of Santiago Solis in documents filed with the city.
Gaytan, meanwhile, is suspended and may be fired from the Police Department after he was accused of threatening to shoot a Southwest Side man, then allowing fake blood to be smeared on Gaytan’s face to make it seem as if he were attacked.
The Tribune/Exito! investigation also found that Monterrey won its contract to provide security guards at Chicago Housing Authority buildings after Rick Castro, a CHA manager, recommended Monterrey to a building management company, a company official said. Castro is Danny Solis’ brother-in-law.
CHA spokesman Derek Hill said Friday the agency is investigating the allegations about Castro, but he declined to elaborate.
The CHA’s ethics policy prohibits employees from using their position to obtain contracts for certain relatives.