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Proposed Wage Theft Prevention Act Would Hit Hard at Non-Compliant D.C. Employers

By Ashley Kaplan, Esq. on 6/3/2014
Wage Theft Prevention Act

Less than one year after its last amendment, the Wage Theft Prevention Act of 2014 was reintroduced in February with a much more aggressive stance against wage theft in the District of Columbia. If passed, the proposed bill would strengthen employee protections – and significantly impact District employers -- by:

Creating a formal hearing process to allow victims of wage theft to recover unpaid wages and damages
Making contractors liable for subcontractors’ actions
Allowing the District to suspend business licenses for non-compliance
Substantially increasing penalties for committing wage theft – from $300 per employee for a first offense to as much as $10,000 per employee

Councilmember Vincent Orange, one of the legislators supporting the bill, shared: “By cheating workers out of wages, employers who commit wage theft rob D.C. of revenues through tax and payroll fraud, which can depress consumer spending and stunt economic growth.”

The Wage Theft Prevention Amendment Act was first passed in July 2013 as part of the District of Columbia’s 2014 budget. It specified that employees who were owed unpaid wages would be eligible to collect back wages, plus damages of up to three times this amount.

The amended bill would build on this employee provision with a handful of firm and far-reaching consequences for D.C. businesses. In addition to formal hearings that could be especially damaging to employers, the bill would impose steeper penalties and the risk of losing their business licenses. There’s also the aspect of contractors and subcontractors being jointly liable for wage violations. Although large businesses frequently work with several subcontractors, they don’t always have a clear system in place for monitoring the subcontractor-employee relationship.

What's next?

The future of the bill remains to be seen. The D.C. Council held a public meeting in mid-March 2014 that had the support of more than 75 people, but, interestingly, not the representation of the business community. Since then, some concerns have been expressed about certain language in the bill, most notably the contractor-subcontractor responsibility and the nature of the actions that would trigger a potential $10,000 fine. It seems that although the bill has strong Council support, it will most likely undergo revisions before it’s finally approved and becomes D.C. law.

If passed, employers would need to educate themselves on new recordkeeping and notice requirements, as well as their role in a formal hearing process.

Labor Law, Policies