Joseph Rinaldi wondered why he was attracting stares from facility cleaners when he recently made a delivery to a building. “I walked in and everyone just froze,” he says. “Later, I found out that it was simply because I was wearing a suit. The workers in that particular building were anxious about possibly being visited by an immigration official.”

Rinaldi’s awkward experience is indicative of a larger immigration issue that is affecting not only cleaners, but the cleaning industry as a whole. The fact that illegal immigrants often find work in the cleaning industry is nothing new. What is new is increased pressure from the federal government on building service contractors (BSCs) and facility managers to root out illegal hiring practices within their operations. It’s an issue that has been building up over time, says Rinaldi, and the recent Wal-Mart raid in late 2003 was the capstone.

“We have a major influx of immigrants in this country,” says Rinaldi, who owns Diversified Solutions, a Long Island, N.Y.-based BSC. “It’s confusing because on one hand, President Bush is promoting legislation that will help illegal workers gain citizenship, but on the other hand, Wal-Mart is being raided for having those illegal cleaners work in their buildings.”

The Wal-Mart case is slowly working its way through the courts at present, but immigration officials have already commented on their reasons for the raid.

“The priority is not the workers. We can pick up illegal workers any day we want,” says Kenneth Elwood, retired director of the Philadelphia immigration district, which was involved in the raids. “What we were looking for was something to prove a violation [by Wal-Mart].”

Rather than simply punishing illegal workers, the immigration officials attempted to send a message to U.S. companies that they should not attempt to subvert the law, according to national reports.

The immigration crackdown has grown to become a contentious issue within the cleaning industry — so much so that Building Service Contractor Association International (BSCAI) recently felt compelled to release a statement declaring its view of the most salient issues within the immigrant-worker debate.

“With alarming progression, some industry contractors are deliberately misclassifying their janitorial workers as ‘independent contractors’ — a practice known in our industry as ‘illegal subcontracting.’ This deprives federal and state governments of millions of dollars annually in revenue, and deprives workers of the benefits and protections of a wide range of laws and insurance programs,” says BSCAI’s statement.

Some BSCs, however, are confident that the immigration focus will not give the cleaning industry a negative reputation. “There are rogues in every profession,” says Jay Vonachen, former regional president of AmSan, and current owner of Vonachen Services, a Peoria, Ill.-based BSC. “I think that in the end, the Wal-Mart situation will prove to be the exception rather than the rule.”

NEWS MAKERS

Study Shows Growth In Paperboard Box Demand
The demand for corrugated and paperboard boxes is projected to climb 2.8 percent per year to more than $35 million in 2007, rebounding from a low base in 2002, according to a recent study released by The Freedonia Group, Cleveland. Advances will be stimulated by an expected upswing in shipments of nondurables, which account for more than three-quarters of total box demand, according to the study.

Researchers Boycott Federal Ergonomics Talk
A two-day federal symposium, titled “Muskuloskeletal and Neurovascular Disorders — the State of Research Regarding Workplace Etiology and Prevention” was recently boycotted by 11 leading ergonomists in an attempt to protest the U.S. Occupational Safety & Health Administration’s (OSHA) stance on ergonomics, having repealed President Clinton’s legislation to prevent ergonomic injuries. The ergonomists — many of whom are university professors and scientists — also sent a formal letter to OSHA, decrying the absence of ergonomic standards and regulations.

Ettore Announces Revenue Increase, Market Share and Annual Sales
Ettore Products Co., Oakland, Calif., recently announced that it has increased overall growth by close to 8 percent for the last 12 years, despite flat commercial product sales. Ettore also announced that it now has annual sales of $50 million and has gained control of 75 percent of the professional window-cleaning market and 80 percent of the consumer market.

REGULATORY NEWS

Many businesses are struggling to comply with CAN-SPAM legislation, the anti-spam law that went into effect January 1. Distributors are advised to obtain legal counsel for a full interpretation of the law, but should take the following steps immediately:

  1. ) Add a physical address to all e-mailings,
  2. ) Include a “clear and conspicuous” notice that your mailing is an advertisement,
  3. ) Review your opt-out mechanism and make sure opt-out requests are handled within 10 days.


The California Air Resource Board (ARB) recently proposed new volatile organic compound (VOC) standards, naming new standards for 20 categories of consumer and institutional products. ARB standards carry the same weight as state laws and regulations in California, which is why sanitary supply legal experts are challenging the recently proposed standards.
“Unfortunately, ISSA remains troubled by a number of the proposed regulations, including the potential economic effect that they may have on California businesses,” said Daniel Wagner, the International Sanitary Supply Association’s (ISSA) manager of regulatory compliance, in a recent letter to ARB. Wagner specifically points to six of the new standards, saying that each carries an excessive burden for business owners in the jan/san industry.

One of those new standards would require that the date of manufacture be displayed on a product label. “Numerous companies have traditionally labeled products with date-of-manufacture codes, rather than displaying the actual manufacture date, to help regulate the internal flow of products and in an effort to prevent consumer confusion,” said Wagner. “Unfortunately, the proposed requirement that all products be labeled with the actual date-of-manufacture, instead of the date-code, will sacrifice these goals.”

Other proposed standards include increased regulation of “general-purpose removers,” “adhesive removers” and “graffiti removers.” The ARB will debate the proposed standards in early 2004 as part of the2004 Consumer Products Regulation Workgroup. For information, visit the ARB’s website.

MERGERS & ACQUISITIONS

K-tech Kleening Systems, Weston, Wis., a provider of commercial and residential cleaning services, recently announced the acquisition of Armstrong Cleaning of Sturgeon Bay. As a building service contractor for commercial buildings, the acquisition of Armstrong Cleaning will increase K-techs’ service area throughout Wisconsin, the company said.

Hubbard Supply Co., Flint, Mich., a distributor of janitorial and safety supplies, recently announced the acquisition of the Kendall Industrial Supply Division of Kendall Electric, Battle Creek. Hubbard Supply, a company with 80 employees, was founded in 1865 as Newton & Hubbard Hardware.

Diversified Chemical Products Inc., North Kansas City, Mo., has purchased Lubar Chemical Co., also of Kansas City. Diversified and Lubar both produce specialty, private-label cleaning compounds for use in industrial, institutional, janitorial and automotive applications.

O-Cedar Commercial, Paxton, Ill., recently announced the acquisition of Clore Mop Co., a third-generation mophead manufacturer located in Danville, Ind. The acquisition will increase O-Cedar’s sales by 30 percent, according to company officials. In August 2003, O-Cedar was purchased by a group of investors and continues to use the O-Cedar brand name.

Teknor Apex, Pawtucket, R.I., a manufacturer of molded-rubber floor matting and rubber and plastic cutting boards, extended its reach into the floor matting market with the acquisition of Velo International, North Canton, Ohio, an international importer and marketer of matting.

Employment Cost Index Results Reveal Growth For Private Industry

In late January, the Bureau of Labor Statistics (BLS), Washington, released the much-anticipated Employee Cost Index (ECI), a quarterly survey of employer payrolls in the final months of the quarter. The recent results measure increases in the cost of labor — wages, benefits, bonuses, etc. — from September 2003 to December 2003.

Overall, compensation costs for civilian workers in the United States rose .7 percent from September to December 2003. Benefit costs increased 1.2 percent and “continued to strongly outpace the gain in wages and salaries for civilian workers, .5 percent,” said a BLS representative.

More than 3,000 private sector firms were surveyed, as well as more than 500 local governments, schools and other public sector organizations. Survey results are broken down into categories according to geographic region, types of jobs and types of benefits, to name a few.

For the month of December alone — often used to measure the year-end strength of employment compensation — compensation costs in private industry increased 4.0 percent for goods-producing industries, compared with the 3.7 percent advance for December 2002.

Among geographic regions, the Midwest performed the best, posting a 4.8 percent increase for the month of December. The South had the poorest performance with an increase of 3.1 percent. Compensation costs rose 4.1 percent in the Northeast and 4.4 percent in the West.

Although the ECI indicator is not the most-watched economic indicator, “it is among a select group of indicators that have enough power to move the markets,” according to Investopedia.com, a recognized authority on economic indicators by those on Wall Street and in Washington. According to the website, increases in wages are especially good when partnered with productivity growth. Otherwise, increased wages can spell trouble for companies.

The ECI survey results are released the last Thursday in April, July, November and January.




POSTED ON: 2/1/2004