WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) introduced legislation today that would stand up for working families by cracking down on wage theft. The Wage Theft Prevention and Wage Recovery Act would give workers the right to receive full compensation for all of the work they perform, as well as the right to receive regular paystubs and final paychecks in a timely manner. It would also provide workers with improved tools to recover their stolen wages and make assistance available to build community partnerships that enhance the enforcement of and compliance with wage and hour laws.
“When bosses don’t pay their workers what they’re owed, it robs them of money they earned for their hard work and hurts businesses that play by the rules,” Brown said. “It’s shameful that employers are reaching into the pockets of low-income workers who have bills to pay and families to feed. We must create a system where employers who steal wages are held accountable and workers have the tools they need to recover their wages when they’ve been cheated.”
“Wage theft,” the practice of not paying employees for all their work, refers to a range of wage and hour violations including: forcing people to work off the clock, refusing to pay workers the minimum wage, denying workers overtime pay even after working more than 40 hours a week, stealing workers’ tips, or knowingly misclassifying workers to avoid paying fair wages.
During a news conference call today, Brown was joined by Brennan Grayson, director of the Interfaith Workers Center in Cincinnati, who helped organize support for the City of Cincinnati’s recently-passed wage theft ordinance – the first of its kind in Ohio. In its 11 years of operation the Cincinnati Interfaith Workers Center, with the help of its members and partners in law enforcement, has helped employees recover more than $1.2 million in unpaid wages.
“Only a fraction of wage theft victims have the awareness of their rights to know they are being cheated, and even those who are aware either don't take action or can't fully recover their wages. This is wrong,” Grayson said. “Senator Brown's bill is the type of change we need to begin making things right, to begin restoring dignity to wage earners.”
Workers in low wage industries are at the greatest risk of suffering from wage theft. According to a survey of workers by the National Employment Law Project, 26 percent of those surveyed were paid less than the minimum wage in the week prior to the survey and 76 percent of those who worked more than 40 hours were not paid the legally-required overtime rate.
The Wage Theft Prevention and Wage Recovery Act is comprehensive legislation to combat wage theft in America. This bill will strengthen fundamental protections to allow workers to get the money they have earned through hard work and it will crack down on the corporations that subject workers to these abuses. Taking these steps will help ensure our country can work for all Americans, not just the wealthiest few, so our economy grows from the middle out, not the top down. U.S. Sen. Patty Murray (D-WA), top Democrat on the Senate Health, Education, Labor, and Pensions (HELP) Committee, joined Brown in introducing the bill today and U.S. Rep. Rosa DeLauro (D-CT) introduced companion legislation in the U.S. House of Representatives.
The bill would achieve the following:
1) Require employers to pay all wages owed to an employee. Currently, workers can only recover wages at the minimum wage or, for overtime hours, 1.5 times their regular wage; for example, an employee may be hired at $9.00 per hour, but would only have the right to recover $7.25 of every $9.00 she was owed. This bill would help workers recoup the full compensation that employers have taken from them.
2) Require employers to provide initial disclosures of the terms of their employment and regular paystubs to all employees and create a civil fine for noncompliance of $50 for the first violation and $100 for each subsequent violation.
3) Require employers to pay final paychecks within 14 days of separation or by the payday for the pay period, whichever is earlier; the employer will owe the employee in question her daily wage for each day beyond this period that the paycheck goes unpaid, for a maximum of 30 days.
4) Create a civil penalty of $2,000 when employers violate minimum wage and overtime protections under the Fair Labor Standards Act (FLSA), and—for the first time—the protection guaranteeing workers their full compensation. The Act would also increase the existing civil penalty for willful or repeat violations to $10,000. Currently, the Department of Labor (DOL) does not have the authority to assess civil penalties for violations of the FLSA’s minimum wage or overtime requirements unless the employer is guilty of repeat or willful violations; even then, the penalty is set at just $1,100 per violation.
5) Increase the damages that employees who are victims of wage theft are entitled to. The amount currently provided for by the FLSA is twice the owed wages. This bill would raise that amount to triple the owed wages amount, plus interest assessed on the original owed wages.
6) Strengthen protections for employees who are illegally fired by their employer as retaliation for filing a complaint concerning wage theft or cooperating with a DOL investigation. This bill would increase the damages to which workers are entitled to quadruple the owed wages amount, plus interest assessed on the original owed wages.
7) Strengthen the FLSA’s recordkeeping provision by creating a civil penalty of $1,000 for an employer’s first violation of the provision and $5,000 for each subsequent violation. Additionally, the legislation would give employees a right to inspect their employer’s records by requesting a copy of those records. Finally, if an employer violates the recordkeeping provision, the bill would allow an employee’s reasonable evidence regarding their hours worked to be used to create a rebuttable presumption that the employer engaged in wage theft, and to establish the exact amount of that wage theft. Under this bill, the employer would be allowed to rebut this presumption only with clear and convincing evidence.
8) Increase the time that employees have to bring a claim for owed wages from two years to four years (and from three years to five years for willful violations) from the date of the violation and temporarily suspend this time limit during any DOL investigation.
9) Make it easier for employees to take collective action to recover their stolen wages. The bill would remove the current requirement that employees affirmatively “opt-in” to engage in a collective action under the FLSA. This will enable employees to pursue collective action cases in a manner similar to most class action cases, in which members of the “class” must affirmatively “opt-out” of the case in order to not be involved.
10) Direct DOL to refer to the Department of Justice for criminal prosecution those employers who comprehensively engage in wage theft by willfully stealing employees’ wages, falsifying records to hide the truth, and retaliating against employees when they try to speak up for themselves or cooperate with a DOL investigation.
11) Create a grant program at DOL to assist DOL in its education, trainings, and enforcement of this Act through partnerships with organizations on the ground that fight wage theft.
The Wage Theft Prevention and Wage Recovery Act is part of Brown’s ongoing efforts to improve the treatment of Americans in the workplace. Last November, Brown introduced legislation to take action against employers that misclassify their workers to cheat them out of wages, benefits, and important workplace protections – one of the practices that contributes to wage theft. He has also introduced bills to raise the minimum wage, expand paid sick leave to all workers, and support workers’ right to bargain with their employer.