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The Temp Agencies Taking Immigrants for a Ride in Chicago

The "raiteros" system provides large companies with labor at the lowest possible cost.

| Tue Apr. 30, 2013 6:00 AM EDT
a bus in a parking lot
Workers get off the bus at 5:30 a.m., head into the warehouse, sign their names to a sheet of paper and wait until just before 6 a.m. when they can start getting paid. Sally Ryan/ProPublica

Select has supplied workers to Walmart warehouses, Bank of America, Toyota, Costco, Trader Joe's, General Mills, Mattel. and Fisher-Price, according to court records, trade journals and the company's website.

In recent years, Select has weathered several controversies over its employment practices unrelated to its use of raiteros.

In 2011, it was hit with a $50 million jury verdict in a civil fraud case brought by the California state insurance fund. The lawsuit alleged that the company lowered its workers' compensation costs by lying about its payroll and falsely claiming its employees worked for another company. Select appealed and in January announced it had reached a confidential settlement with the state fund.

The company has also faced several lawsuits accusing it of cheating workers out of their pay. In August, while denying the allegations, Select Remedy agreed to pay up to $400,000 to cover unpaid wage claims from a group of more than 200 workers in the Chicago area. None of these workers used raiteros or worked at Ty.

Select Remedy entered the Chicago market in 2007. There, the raiteros helped the agency satisfy corporate clients by getting large numbers of people to the worksite, according to five former managers.

"Recruiters are under a lot of stress to make sure they don't lose out on the hours," a former personnel supervisor for Select Remedy said, meaning recruiters needed to fill an order immediately or the client company would turn to another agency. Indeed, volume is key. In the industrial sector, according to analysts, temp firms typically average only about 4 percent profit on each worker.

The supervisor, who asked not to be named because she signed a nondisparagement clause, recalled office-wide emails calling for, say, 200 workers all of sudden. "They're just trying to get bodies out there," she said, and the raiteros are "the easiest way to do it."

And one of the cheapest. In addition to not paying the raiteros, Select Remedy avoids the cost of maintaining and insuring the vans.

"It always bothered me," said the former personnel supervisor. "Half these employees were making minimum wage."

Temp agencies that don't use raiteros face other added costs, such as employing neighborhood recruiters. They also have to depend on individuals who might get sick, run late, or have cars break down.

Robert Stack, owner of Custom Staffing, which has an office in Little Village, said using raiteros definitely gives his competitors advantages. A big one: not having to pay rent in the neighborhood, which can cost a few thousand dollars a month. Still, Stack said he prefers not to use raiteros.

"Simply put, it's illegal," he said.

"Live the American Dream"

Promotional videos on Select's website tell job seekers that the company can help them "get paid like a professional" and "live the American dream." In one ad, the pitchman jokes, "Did you know that eight out of five economists say that working at Select is 6 bajillion times more effective than standing on a corner?"

In fact, Select employees in the raitero system start their workday by gathering on Chicago street corners before dawn. Many workers in Little Village don't know the basics of where they work. They often had to refer to their paycheck stubs for the name of their temp agencies. The companies they served were known simply by the Spanish name of the product they were handling—galletas (cookies), vinos (wines), or lechugas (lettuces).

A ProPublica reporter followed buses and vans from the early morning pickups in Chicago to the warehouses in the far suburbs, and conducted more than 60 interviews with workers, raiteros, temp agency recruiters, managers of check-cashing stores, and others. We examined check stubs, court records, labor department files, and undercover video shot by the Chicago Workers' Collaborative, an advocacy group that opposes some temp agency practices.

Several workers agreed to speak for this story using their full names. Others like Maria Castro asked that only their second Spanish surnames be used for fear that they wouldn't be able to find work in a labor market that is largely controlled by the raiteros.

"I would be homeless if they found out who I am," she said.

Like many workers in this system, Castro is undocumented. However, companies must abide by most labor laws, such as minimum wage, for anyone they hire regardless of whether they are in the United States illegally.

An arch that says "Little Village"
Little Village, on the west side of Chicago, is home to the largest Mexican community in the Midwest. Sally Ryan/ProPublica

Here's how the raitero system works.

Little Choice But to Pay

Aguilar said he has been a raitero for seven years. Like many others, he said he started as a temp worker himself, packing video games for Sega. Another raitero asked him to help drive one of his vans, and soon after, Aguilar said he borrowed $1,000 from a temp agency, now out of business, to buy his own van. Eventually, he bought a school bus.

He and other raiteros recruit workers by advertising in check-cashing stores and by word of mouth. When workers call, they are told to come to Aguilar's house to fill out Select Remedy's application. The sign on the front door of his building says in Spanish, "Señor Rigoberto lives on the second floor. If you come looking for work, go upstairs."

Castro originally applied to Select Remedy through Aguilar's brother, Eugenio Aguilar, who is also a raitero, and went to work for Xentris Wireless, a company she knew as los celulares, packing iPhone cases and other accessories. She said Eugenio sent her to Rigo's house, where she paid $5 to apply online. Rigo said people can come and use his computer, but he doesn't charge.

Every day, the temp agencies call the raiteros, giving them the number of people they need for the next shift. The raiteros then pick the workers, tell them where and when to meet, and drive them to the warehouse or factory.

Nearly 50 workers said they have little choice but to pay the ride fee. Several workers said they had their own cars, but their temp agency told them they had to go with the raitero. "There was a lot of pressure to use Rigo," said Elizabeth Bellido, who worked for Select Remedy at Ty until March. "The first people who would get picked to work would be his people."

Other workers said they were allowed to drive, but soon found that the raitero had given their spot to someone else.

Castro recalled working with a raitero named Cirilo, who was ferrying workers on behalf of the temp agency Most Valuable Personnel, or MVP. One day, Castro said, Cirilo tried to cram 44 people into two 15-passenger vans.

"They wanted me to sit on the lap of another woman," Castro recalled. So she asked for a ride back from another raitero, who also served the plant and had a milk crate to sit on.

In retaliation, she said, Cirilo confronted her and told her she would never get work from him again. "If you work with another raitero, your raitero won't take you anymore," Castro said.

Cirilo declined an interview and hung up on a reporter.

MVP said it was unaware that Cirilo was charging the workers and said that it would investigate. While Select Remedy said it doesn't pay raiteros, MVP operations manager Darron Grottolo said his company has been paying Cirilo Peralta Transportación $1,350 every week to transport workers to his client companies. Hearing that workers said that they also paid Cirilo, Grottolo said, "It's disturbing. It's against the law. It's wrong." He explained, "You can't charge for transportation in Illinois."

This January, told by Aguilar that she had work, Castro came to the corner of 26th Street and Drake Avenue with about 50 others before dawn. She walked through an alley behind a blue-neon-lit dentist clinic and a shop selling quinceañera dresses and got on Aguilar's school bus. The bus took her 30 miles down Interstate 55 to the far southwest suburb of Bolingbrook, where the Ty warehouse is located.

A weekly paycheck from January for her work at Ty shows her take-home pay was $291.07, the state minimum of $8.25 an hour, minus taxes. Not mentioned on the pay stub, though, is the $40 she had to pay Aguilar to get to work that week. With those deductions, Castro's actual pay was $7.22 an hour.

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