Witnesses at House Hearing on Wage Theft Call for Legislation

Employment Law

A House Department of Labor Appropriations subcommittee held a hearing on “wage theft,” focusing on the need to increase funding for “strategic” wage and hour enforcement and for Congress to pass the Wage Theft Prevention and Wage Recovery Act (H.R. 3467 in the previous Congress), which would substantially increase compliance burdens under the Fair Labor Standards Act and significantly expand potential liabilities.

Subcommittee Chair Rep. Rosa DeLauro (D-RI) called for the DOL Wage and Hour Division to use "data to identify those industries and employers most likely to be violating wage and hour laws” and then prioritize investigations there with a strategic enforcement approach to protect workers.

Witnesses called for Congress to pass the Wage Theft Prevention and Wage Recovery Act, which would:

• Increase liquidated damages for FLSA violations from two times the unpaid wages (plus interest) to three times unpaid wages (plus interest);
  
  
• Require employers to notify employees if they are FLSA exempt;
  
  
• Increase civil monetary penalties to as much as $2,000 per employee, or up to $10,000 per employee for repeat or willful violations; and
  
  
• Impose monetary penalties for FLSA recordkeeping violations up to $1,000 per-affected-employee for the first offense, and up to $5,000 per-affected-employee for subsequent violations.

Takeaway:  The “wage theft” issue is unlikely to go away, with a much greater chance of legislation being enacted at the state and local level.