Since March 2009, it has been a stated objective of the United States Department of Labor (USDOL) to step up prosecutions and investigations of employer wage-hour violators. I have noted this trend in a number of other posts. The USDOL is not without (numerous) partners in this initiative. Many states, all of whom have parallel wage-hours and. In many cases, more pro-employee laws are also stepping up their enforcement of state laws, focusing on what is now being described as “wage theft..”
In a 2009 study entitled “Broken Laws, Unprotected Workers” researchers from Cornell University and Rutgers University opined that workers in New York, Chicago and Los Angeles lose an average of 56 million dollars per week from employer wage violations. The study’s claim is that 68% of the workers surveyed claim that they are denied proper overtime pay. These reports, as well as a worsening economy, for everybody, state agencies and individuals alike, have generated intense interest by the state Departments of Labor, leading to numerous more audits and severely cracking down on employers who violate these laws. That is, more severely than these agencies have, even into the recent past.
States are now enacting so-called wage theft statutes. In Illinois, the Wage Payment Act has been recently amended to provide for enhanced penalties and administrative fees, especially for repeat offenders. The statute also enhanced the possible criminal penalties from misdemeanors to felonies. New Mexico has passed a law that entitles underpaid and improperly paid workers to collect double damages (i.e. liquidated damages) for wage underpayments. The governor of Washington has signed a new bill into law, under which civil penalties from $1000-20,000 may now be assessed. The list goes on and on. Importantly, these penalty and fee monies inure directly to the benefit of the particular State and go into State coffers, not the pockets of the allegedly underpaid.
An employer must always be aware that, whatever State(s) it operates in, there are two bodies of law and DOL enforcement postures, that must be complied with—federal and state. “Mere” compliance with the dictates of the Fair Labor Standards Act is insufficient. State laws are often quirky, with different little quirks in different sections of different state laws (e.g. wage payment, payment for certain kinds of preliminary/postliminary time, prevailing wage, etc.).
Again, the cure is a proactive approach, an internal wage audit of all compensation practices under federal and state law, in as many jurisdictions as an employer does business in. Even with that, there may be some gray areas, but the landscape will be better illuminated.