Wednesday, June 10, 2015

Stealing Wages from Workers Gets More Expensive

In response to an unprecedented community response exposing wage theft in Connecticut, the state legislature passed SB 914. The bill, now awaiting signature from Governor Malloy, was very controversial, passing the Senate by three votes and the House by just one vote.

The bill penalizes unscrupulous employers by awarding double damages for wage theft violations. This brings Connecticut in line with surrounding states and federal statues.

Wage theft has become one of the biggest issues facing low wage workers in Connecticut, especially immigrant workers. Unidad Latina en Accion, an immigrant rights organization in New Haven, with the Immigrant Workers Center, issued a report including stories of those who were not paid for their work as legally required.

Wage theft covers a variety of infractions including nonpayment of overtime, not paying for all hours worked, withholding a final pay check, not paying minimum wage, not turning over tips and misclassifying workers as independent contractors. Restaurant, retail, construction, day labor, long term care, home health care and agricultural jobs are particularly impacted by wage theft violations.

The report explains that "frequently workers take an employer to court and win, but they cannot collect any money, because the employer declares bankruptcy or argues that he has no assets. In thousands of cases every year, Connecticut employers close their businesses and reopen with a different name; transfer property to family members; leave the country with their property; and use other tactics to “disappear” their assets so they can avoid paying the worker what they owe."

Under the federal Fair Labor Standards Act (FLSA) double damages are mandated in cases of proven wage theft. Effective enforcement laws must not only compensate the worker but deter violations by employers. Ten states actually allow treble damages (AZ, ID, ME, MD, MA, MI, NB, ND, VT, WV).

SB 914 continues to allow judges to use their discretion when awarding double damages if they determine the employer was acting in good faith. It does not cost the state money and in fact, allows for recovery of taxes for the state. Business benefits by creating a level playing field instead of one where unscrupulous employers undercut legitimate employers because they pay less for their labor.

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