Democrats in Congress say it's time to crack down on wage theft.
On Wednesday, three lawmakers introduced a proposal aimed at discouraging unscrupulous employers from shorting their workers on pay. The bill, called the Wage Theft Prevention and Wage Recovery Act, would ramp up the penalties for wage theft and make it easier for workers to recoup what they're owed.
Under the current law, employees who aren't paid for all their hours are only legally due the minimum wage -- at least $7.25 per hour -- or, in the case of overtime hours, time-and-a-half pay. The Democrats' bill, however, would make employers liable for the full, agreed-upon wage for which someone was working, be it $7.25 or far greater. The bill would also mandate that employers provide their workers with regular paystubs -- something not currently required under federal law -- and fine them if they don't do so.
In addition, the bill would jack up the damages and civil penalties on employers who commit wage theft. It would create a new civil penalty of $2,000 for employers who fail to pay the minimum wage or the overtime rate, while also vastly hiking the current penalty for repeat offenders. The bill would boost the civil damages available to workers from double the wages they're owed to triple.
The proposal was introduced by Sens. Patty Murray (Wash.) and Sherrod Brown (Ohio) in the Senate and Rep. Rosa DeLauro (Conn.) in the House. In a statement, Murray said the legislation would discourage wage theft and make the system fairer for businesses that already do right by their employees.
“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," she said.
Even if it gains widespread Democratic support, it's unlikely the legislation will go anywhere while the GOP controls both chambers of Congress. Republicans have been loathe to place any new regulations on private-sector businesses during the Obama era, especially ones that come with fines attached to them. That said, some GOP members have supported smaller measures aimed at curbing wage theft among federal contractors.
Business groups would lobby hard against the Democratic proposal were it to start moving anywhere. They may find one particular provision especially threatening: a change to federal law that would make it easier for workers to join group lawsuits over wage theft. Rather than requiring workers to "opt in" to such a suit like under current law, the proposal would allow for class-action suits in which workers must "opt out" of them -- thereby increasing the number of plaintiffs suing the employer.
Reliable statistics on wage theft are hard to come by, in part because many workers don't report it for fear they'll lose their jobs or have their hours cut. But a 2009 study of low-wage industries in three cities found that roughly a quarter of those surveyed said they were paid less than the minimum wage at some point the week prior. Three-quarters said they weren't paid the full time-and-half overtime rate for hours worked over 40 in the week.