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The abrupt closure of Paseo this week amid news that the popular Seattle restaurant is being sued by former workers set sandwich-loving tongues wagging about wage theft, a problem local officials have been struggling to address for years.

Seattle made wage theft a crime under city law in 2011, vowing to go after employers that intentionally cheat workers out of pay. But more than three years later, the Seattle Police Department and City Attorney’s Office have yet to prosecute anyone.

“It’s been frustrating,” said Cariño Talancón, organizer at Casa Latina, a nonprofit that advocates for low-wage and immigrant workers and that helped craft the law.

The City Council on Friday will consider a number of budget actions meant to strengthen Seattle’s hand against wage thieves, while the City Attorney’s Office and cops say they are working on new strategies as they continue to pursue prosecutions.

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In September, Mayor Ed Murray and the council announced a new Office of Labor Standards that will serve as a clearinghouse for workplace infractions, including wage theft and violations of the city’s new minimum-wage law, which takes effect in April.

Wage theft is a widespread phenomenon in Seattle and across the country, Talancón says. The problem is worst in particular industries, including restaurants, landscaping and construction, and many victims are immigrants from Latin America, she says.

It can involve businesses failing to pay proper overtime wages, misclassifying employees as independent contractors and mishandling tips.

The former employees suing Paseo, who were fired in March, claim they worked about 80 hours a week without being paid time-and-a-half for overtime.

Identified as “Hispanic-Mexicans” in their King County Superior Court lawsuit, filed in September, they also claim they were treated differently than non-Hispanic workers. The restaurant, which filed for bankruptcy Wednesday, has denied all the allegations.

Paseo owners have not said why the restaurant shut down.

Talancón says wage theft harms Seattle’s most vulnerable workers.

“You have people choosing between their health and their housing,” she said. “Being on the edge of homelessness, that’s the life of people experiencing wage theft.”

The city criminalized wage theft in 2011 to supplement federal and state laws already on the books and to add enforcement capacity.

Police and city prosecutors insist they’ve been doing their best to bust criminal employers but have failed in part due to a lack of complaints.

Many victims of wage theft don’t speak English and some choose to stay silent rather than risk losing work, according to the City Attorney’s Office. Some are living in the country illegally and steer clear of the cops because they’re worried about being deported, says Richard Greene, an assistant city attorney.

The police have received fewer than 100 wage-theft complaints so far, Greene says.

The cops didn’t start tracking wage theft as a separate criminal category until fall 2013, says police Lt. Greg Schmidt. Since then, there have been about 20 to 25 complaints, he says.

The city will soon formalize a new agreement with the U.S. Department of Labor whereby the feds will refer cases to the City Attorney’s Office, he says. And a new brochure in seven languages will be distributed to educate workers about wage theft.

But even when workers come forward, there are challenges to prosecution, Greene says.

“We had a couple of guys working for a janitorial service that did work at (a local restaurant) and they had what seemed to be legitimate concerns,” he said. “Then we lost contact.”

The high standard of proof for criminal cases is another roadblock, says Greene. When a worker is paid in cash without a contract, it can be difficult to collect the evidence needed to overcome reasonable doubt, he says.

The standard of proof in civil cases is lower than in criminal cases. That’s why the council, in the course of amending Murray’s proposed 2015 and 2016 budget, likely will vote Friday to create civil penalties for wage-theft violations, says Nick Licata, who chairs the council’s budget committee.

“We initially thought the criminal component would be the most effective tool, that it would be scarier,” Licata said. “We’ve discovered that the bar is pretty high.”

The council might also vote Friday to request that Murray’s office prepare legislation increasing the severity of all labor-law violations.

“We need real penalties,” said Councilmember Kshama Sawant.

“When a worker steals from his or her boss, they lose their job and likely go to jail. Why don’t we treat labor-law violators the same?”

The council may also beef up Murray’s budget to provide outreach to workers and hire more investigators as the minimum-wage law launches next year.

The Seattle Chamber of Commerce didn’t immediately return a request for comment Thursday afternoon.

Daniel Beekman: 206-464-2164 or dbeekman@seattletimes.com