Companies withhold billions in wages annually through unpaid tips and overtime. Some lawmakers now demand stricter penalties.

People gather outside of La Macarena Sports Bar to protest alleged wage theft on Friday, March 10, 2023, in Manhattan New York.

Barry Williams for NY Daily News via Getty Images

Workers, especially in low-paid industries, have millions in wages stolen each year.Now, some lawmakers want to further penalize employers who steal employees’ pay.New legislation would increase penalties and require more pay transparency.

Bosses have been illegally pocketing billions from their workers every year and some lawmakers want to make them pay back even more than what they stole.

Wage theft — when employers don’t pay their workers the benefits they’re entitled to — is incredibly prevalent across the economy.

Those lost benefits can include tips that employers keep for themselves or overtime that goes unpaid. Workers in traditionally low-paid industries saw hundreds of wage theft cases in fiscal year 2022 and clawed back millions in back wages from their employers, according to DOL data. Construction workers alone were owed nearly $33 million in back wages, and workers in food services — who are likely to be tipped, minimum wage employees — were owed over $27 million.

From 2017 to 2020, workers clawed back over $3 billion in stolen wages, according to the left-leaning nonprofit think tank Economic Policy Institute. That’s “just a small portion of wages stolen from workers across the country,” according to EPI, with the real cost of wage theft potentially being closer to $50 billion annually.

Now, Sen. Patty Murray, alongside Reps. Rosa DeLauro and Bobby Scott, are introducing legislation that would make it even more costly for employers who steal their workers’ money. The Wage Theft Prevention and Wage Recovery Act would both increase how much employers owe workers who they leave in the lurch and put money towards increasing wage theft education.

“When people punch in for work each day, they expect and deserve to be paid the full wages they have earned,” Murray said in a statement to Insider. “But right now, workers across the country are being cheated out of billions of dollars in pay each year — and that is simply unacceptable.”

Under Murray’s proposed legislation, workers would get paid back fully what they’re owed — not just minimum wage. Workers would have to receive regular paystubs and documentation from their employers of what their pay and benefits should look like. If employers don’t provide either, they’ll be fined $50 for a first violation and $100 for violations past that. The bill would also make sure that employers don’t leave outgoing workers without their final paycheck: It mandates that workers get that final check either within 14 days of leaving or the first pay period after their departure — whichever comes first. If bosses don’t pony up by then, they’ll then owe their workers daily pay for every day past that cutoff.

Additionally, the bill would penalize employers who try to retaliate against workers reporting wage theft. Should a boss fire someone who reports wage theft, or is cooperating with a Labor Department investigation into stolen wages, that worker would be entitled to quadruple the wages they’re owed — along with interest.

“Our comprehensive legislation will give workers the right to their full paychecks, help ensure they can recover stolen wages, and hold bad actors accountable,” Murray said in her statement. “This is really simple: workers deserve the pay they have earned, and it’s time our laws actually make sure that happens.”

The bill comes as Congress faces a packed fall; a previous iteration of the legislation went through a mark-up, but never saw a final vote. Meanwhile, government agencies are also trying to take aim at firms not paying workers what they’re owed.

The DOL, for instance, is trying to ensure more workers can receive overtime pay. In August, the Labor Department proposed a new rule that would raise the earnings cutoff for receiving overtime – bringing it from around $36,000 to $55,000. The DOL estimated that the adjustment would make 3.6 million more salaried workers eligible for overtime, a big step as some firms try to give their workers bogus manager titles in an effort to make them ineligible for time and a half pay.

“With more and more Americans paying attention and getting in the fight for workers’ rights and basic workplace protections, there is real momentum behind this effort — and I’m going to keep pushing to get it done,” Murray said.

Read the original article on Business Insider


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