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New Federal Bill Targets Wage Theft

Democratic members of Congress are supporting a bill to increase regulations against wage theft. Read more about wage theft and learn how the bill, if passed, could affect how you do business.

Democratic members of Congress are pushing a bill to increase regulations against wage theft. It is a proposal that would likely have a tough time passing the Republican-majority House and Senate, but could potentially gain traction.

Wage theft includes such activities as pushing employees to perform off-the-clock work, non-compliance with minimum wage and overtime requirements, fleecing workers of their tips, or knowingly misclassifying workers. Increased regulation in this area should matter to business owners and managers because it’s one where many could be caught unaware.

"This bill would help even the playing field for the vast majority of businesses that are treating their workers fairly, and it would empower more workers by making sure their paychecks reflect the hours and hard work they put in on the job," said Murray, D-Washington, when introducing the bill with Sen. Sherrod Brown, D-Ohio, and Rep. Rosa DeLauro, D-Connecticut.

The bill, if passed, would enact a host of tougher wage theft rules:

  • Workers can presently recover wages only at the minimum wage; the Wage Theft Prevention and Wage Recovery Act would allow workers to recoup their full compensation.
  • Employers would face fines—$50 for the first violation and $100 each time after—if they don't provide initial disclosures of employment terms to their workers and provide regular pay stubs. The Fair Labor Standards Act presently does not require pay stubs.
  • Final paychecks must be paid within 14 days of separation. Or if it's earlier, it should be the payday for the pay period. If the employer doesn't pay, the former employee is owed pay for each day beyond that the paycheck goes unpaid, for a maximum of 30 days.
  • An employer would face a $2,000 civil penalty the first time they violate the Fair Labor Standards Act's minimum wage and overtime protections. The existing civil penalty for willful or repeat violations would increase to $10,000.
  • The Wage Theft Prevention and Wage Recovery Act would increase damages that employees are entitled to when they are victims of wage theft. Damages are presently assessed at double owed wages; the proposal would raise the amount to triple the owed wages amount plus interest.

Wage theft could potentially be a much more serious issue for businesses if a proposal such as the Wage Theft Prevention and Wage Recovery Act becomes law.


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