The World Famous "Fence Wizard": Update: Golden State Fence, Guilty or an unfair poster child?

Tuesday, November 6, 2007

Update: Golden State Fence, Guilty or an unfair poster child?

As promised the Fence Wizard responds to Golden State Fence founder and CEO Mel Kay's rebuttal regarding his company, for full context the Wizard recommends reading Mel’s comments, click: The World Famous "Fence Wizard": Mel Kay defends Golden State Fence reputation and history....

Here is the Wizardly Response:
Mel States: “First of all, there has never been any attempt to sidestep the law to undersell our competition”

The Wizard finds that sidestepping the law is exactly what your company pled guilty to. Golden State Fence was not just found guilty of hiring illegals; it was the conspiratorial aspect that Golden State Attorneys could not shake the prosecutors from. Those “10 employees (who didn't make one iota’s difference to our bottom line)” were found in prior government audits to be illegally employed. When they were later found at other Golden State locations still employed - it was clear that Golden State had not made a satisfactory effort to change its ways. So why was Golden State made an example of when so many companies have been caught hiring illegals? The Associated Press offered the following: “You have to show a kind of criminal conspiracy,” said Steven Camarota, research director of the Center for Immigration Studies in Washington, a group that advocates tighter immigration controls. “The mere hiring of illegals is not enough.”

Prosecutors agreed and brought charges against Golden State Fence for the repeated non-compliance. Its hard to ignore that the Federal Government notified your company in writing in July 1999 that at least 15 of its employees at its Oceanside office were discovered to be illegal aliens following a visit by agents. “At that time, Golden State executives said they were terminating the illegal workers, but in September 2004, U.S. Immigration and Customs Enforcement (ICE) agents found that 49 Golden State employees at the Oceanside office were illegal aliens”. http://search.washtimes.com/national/20070330-124512-2035r.htm

This is not a record of attempted compliance – after being warned at just one of eight locations (Oceanside) your company increased the amount of undocumented labor by 310% at that location alone.

Mel States: “We lead the nation in our industry regarding the wages we pay our employees from the yard personnel to installation to office”

How can you possibly know this? Have you surveyed every fence company in the nation? Certainly any company that regularly wins government contracts must pay prevailing wage rates (either state or federal) to it’s workers. Those rates are typically between $35-$60 per hour depending on the project and classifications assigned for the project. Non-Union workers earning those rates can make over 100K per year; certainly a wonderful thing – but these rates are not established by Golden State – they are required rates. This makes the undocumented labor violations all the more egregious. By knowingly hiring illegals, as you pled guilty to – you took excellent jobs away from US citizens. Lets be direct on this – the growth and success of Golden State Fence Company came at the expense of some US citizens and to the great expense of companies who did not hire suspected illegal immigrants. Although Judge Moskowitz agreed that Golden State had paid good wages and benefits; the advantage of hiring undocumented workers cannot be discounted. With low unemployment rates, as seen over the past several years, there are only so many workers available in the labor pool – companies that did not hire suspected illegals were at a great disadvantage to Golden State and any other company that did not constrict themselves to the law. This is why it is remarkable that after years upon years of increasing its market share, Golden State Fence has the audacity to ask other companies to forgo the practice that gave it such market advantages and profits while taking away so much work from any company that held the line regarding employment law.

This begs the question – How does Golden State Fence or Fence Corporation, or whatever other name you like, get away with continuing to bid government projects despite being caught for hiring illegals? Maybe the attorneys at Golden State have figured out how to duck the law on this as well – I think we are all curious as to how its possible. Are we to believe that Golden State made sure to only allow its illegal workers to work for the residential portion of the company? Would this not prove without any doubt that you knew exactly which workers were illegal and which ones were legal? If not, how can you explain the continued bidding on public works projects with Fence Corp? Is Fence Corp not part of the Golden State Family that paid about $5 million in fines for the violations described, thus making it in-eligible to bid public works?

Mel states: “We also provide two-three week vacations, holiday, sick pay..”

The Wizard is very impressed with this, although it seems nearly impossible to give workers 6 weeks off per year plus sick pay. This equates to over 15% of the year paid without work – hard to believe but we will take you at your word.

Mel states: “Illegal Immigration - We hired 1942 employees from September 1999 thru November 2005.” ……… “The majority of our installers have been with our company 15-25 years”

The Wizard Cannot ignore these two conflicting statements. If “most” workers have been with the company for 15 years or longer how can you explain the turnover you cite with hiring over 1942 workers over a 6 year span while maintaining a workforce of about 500-700 according to quoted sources.

To make these figures fly we would have to assume the following:

Most workers= at minimum 251 (a tiny majority of 500). This leaves 249 others (the minority). 1942 workers hired /249 slots available = 7.8 workers hired per slot. Using that data over a period of approximately 6 years:

6years/ 7.8 hired per slot = .77 years worked per employee hired during the 1999-2005 span.

This basic math tells us that roughly half of the employees hired during that period would not have ever become eligible for the vacation pay and probably other benefits that arise from working at least a full year. Perhaps this explains some of the savings that comes from hiring and firing (or simply losing) such huge numbers of workers. Certainly this amount of turnover is not common in the industry – not to that degree. In fact it reminds me of a scheme that many US resorts use during peak season; ski resorts for example will hire large percentages of young foreign workers to work the season. Most of the benefits offered to them require a full years work, however most of them did not understand the benefits package and never intended to work more than the peak season and do not have legal visas to stay that long. Its a great deal for the resorts; very misleading to the foreign students on the work visas.

In short, the Fence Wizard wishes to bring attention to your new programs that are targeted at fixing the system that we all have to deal with. If the Wizard can be of service - we would be happy to share and help provide such information to others in the fence industry and beyond. Certainly no person wishes any other business to suffer as yours surely has from workers who bring false ID and false SSN’s to a job interview.

Finally, while the Wizard will not waiver regarding the law, we can certainly move forward to insure that others comply with the law. The terrible misfortune for all of us is that the Federal Governments is has been unable to seal the border and to provide a reasonable guest worker system that is accountable to the American Voter and the American Taxpayer. Had these ends been met – no company would ever have the burden that Golden State Fence Co. has faced.

The following publications were utilized:
http://www.msnbc.msn.com/id/16211320/ ; http://search.washtimes.com/national/20070330-124512-2035r.htm http://query.nytimes.com/gst/fullpage.html?res=9B0CEEDC1231F936A25751C1A9609C8B63
San Diego Tribune
Relevant Links about this discussion:
Golden State Employment Link
Golden State Fence Official Website
Mel Kay Autobiography

5 comments:

Tamara said...

Wizard,
I read this on firesociety.com - did you give permission for them to distribute your article.

Good debate -thanks

-Tamara Gundel
El Paso

The Fence Wizard said...

Tamara,
Thanks for that update - we get a lot of mail and do not remember Fire Society -but I'm sure we gave permission. We are not attempting to limit distribution of our content - this a free newsletter and industry resource and we would like to maintain that.

Thanks,
The Fence Wizard

Barry said...

If you own a business what are you legally required to do in order to avoid hiring someone who is not legal to work?

Maybe once I understand that - I can judge if companies have an unfair burden or a simple basic responsibility.

Thank you,
Barry O'Neil - Palm Beach, FL

John said...

This CEO has totally tried to twist the facts - Anyone can read the actual release from the US Attorney's office - the link is still active:
http://www.usdoj.gov/usao/cas/press/cas61214-GoldenStateFence.pdf

I dare anyone to read that and come away with the impression that they didnt know what was going on. They should be in federal prison for 5 years.

-John Steward
St.Louis

John said...

My link looks like it was cut off -
here it is cut into two lines:
http://www.usdoj.gov/usao/cas/press/
cas61214-GoldenStateFence.pdf

John

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