The Wage Theft Prevention and Wage Recovery Act would crack down on employers who steal wages from their workers — Employers steal more than $15 billion from workers every year, particularly from workers in low-wage industries
On Tuesday, August 1, Senators Patty Murray (D-WA), Sherrod Brown (D-OH), and Al Franken (D-MN), along with Representatives Rosa DeLauro (D-CN) and Bobby Scott (D-VA), introduced the Wage Theft Prevention and Wage Recovery Act, to crack down on employers who unfairly withhold wages from their employees. This bill would give workers the right to receive full compensation for all of the work they perform, as well as the right to receive regular pay stubs and final paychecks in a timely manner. It would also provide workers with improved tools to recover their stolen wages in court and make assistance available to build community partnerships that enhance the enforcement of and improve compliance with wage and hour laws.
“It is simply wrong that employers are able to take advantage of their workers and cheat them out of their hard-earned pay, and all too often women, immigrants and workers of color are those who have to pay the price,” said Senator Murray. “While President Trump continues to break campaign promises and roll back worker protections, I’m going to keep fighting so every worker is treated fairly and paid what they’ve earned. I’m proud to introduce this bill as another step towards building an economy that works for all, not just those at the top.”
“The biggest economic challenge facing our country is that too many people are in jobs that do not pay them enough to live on. Across the country, some workers are putting in long hours and working for an honest day’s pay, only to have their employers cheat them out of their hard-earned wages. Wage theft is inexcusable and unconscionable, and our federal laws should hold employers who violate their employee’s right accountable,” said Congresswoman DeLauro. “The Wage Theft Prevention and Wage Recovery Act is comprehensive legislation that will strengthen current federal law and empower employees to recover their lost wages. Whether it is compensation for a day’s work, or overtime, employees should be paid what they earn. This legislation not only protects workers, but it will help our economy grow.”
“Wage theft is just one of the reasons why Ohioans are working hard but have too little to show for it,” said Senator Brown. “We need to crack down on employers who don’t pay workers their full wages to restore the value of work and strengthen our economy.”
In May, the Economic Policy Institute published a new report finding that employers steal more than an estimated $15 billion from workers each year, with workers in low-wage industries at the greatest risk. A National Employment Law Project 2008 survey of 4,387 low-wage workers in New York, Los Angeles, and Chicago found that low-wage workers experienced a range of wage and hour violations, with women, immigrants and minorities being disproportionately affected. Common examples of wage theft include forcing workers to work off the clock, refusing to pay the minimum wage, denying overtime pay to workers even after they work more than 40 hours a week, stealing workers’ tips, or knowingly misclassifying workers to avoid paying fair wages.
“Americans are spending more hours working, but all too often, because of wage theft, they don’t get the pay they’ve earned—and as a result working families suffer,” said Senator Franken. “While a majority of employers are playing by the rules, wage theft is a real problem. Our bill will combat this crooked practice by giving each worker the tools to make sure that employers aren’t shortchanging workers’ hours or overtime pay. Every worker in Minnesota and across our country should be paid for every hour they work and no less.”
“When workers are not taking home the entirety of the pay they’ve earned because of wage theft, families suffer,” said Congressman Scott.“Unfortunately, wage theft is a persistent problem for low wage workers. A recent study from the Economic Policy Institute sampling the 10 most populous states found that 2.4 million workers lost $8 billion annually to minimum wage violations. The Wage Theft Prevention and Wage Recovery Act will give hardworking Americans the tools they need to fight back against unscrupulous employers and protect their hard-earned paychecks. In addition to raising the federal minimum wage and strengthening collective bargaining, combating wage theft is a critical part in boosting the wages of low wage working people and remedying income inequality.”
In addition to Senators Murray, Brown and Franken, other original cosponsors in the Senate include Durbin (D-IL), Markey (D-MA), Merkley (D-OR), Murphy (D-CT), Warren (D-MA), Blumenthal (D-CT), Gillibrand (D-NY), Harris (D-CA), Baldwin (D-WI), Leahy (D-VT), Booker (D-NJ), Sanders (I-VT), Hirono (D-HI), Van Hollen (D-MD), Casey (D-PA), Wyden (D-OR), and Stabenow (D-MI).
In addition to Representatives DeLauro and Scott, other original cosponsors in the House of Representatives include Boyle (D-PA), Clark, (D-MA), Clarke (D-NY), Conyers (D-MI), DeSaulnier (D-CA), Ellison (D-MN), Green (D-TX), Langevin (D-RI), Lewis (D-GA), Matsui (D-CA), McCollum (D-MN), Nadler (D-NY), Holmes Norton (D-DC), Pascrell (D-NJ), Pocan (D-WI), Roybal-Allard (D-CA), Schakowsky (D-IL), Serrano (D-NY), Slaughter (D-NY), and Velazquez (D-NY).
The Wage Theft Prevention and Wage Recovery Act
Today, across the country, many people are putting in long hours on the job and working hard for an honest day’s pay, only to have their employers cheat them out of their wages. While the vast majority of employers do the right thing and treat workers fairly, too many others force their workers to work off the clock, refuse to pay workers the minimum wage, deny workers overtime pay even after they work more than 40 hours a week, steal workers’ tips, or knowingly misclassify workers to avoid paying fair wages.
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.
The bill would achieve the following:
- 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.
- Require employers to provide initial disclosures of the terms of their employment and regular pay stubs to all employees and create a civil fine for noncompliance of $50 for the first violation and $100 for each subsequent violation.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.