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A Move to Protect Low-Wage Workers
New York Times
Steven Greenhouse

March 12, 2010
View the Original Article

A coalition of labor unions, immigrant advocacy groups and nonprofit organizations in New York announced their support on Friday for newly introduced legislation that would greatly increase penalties against employers that violate minimum-wage and overtime laws.

Supporters of the bill, known as the Wage Theft Prevention and Responsible Employer Protection Act, say that wage violations are all too common because penalties for such violations are small under New York law and because employers that break the law face little likelihood of getting caught.

The legislation — introduced in the State Senate and State Assembly — would subject employers that fail to pay, for instance, $10,000 in legally required overtime to having to pay twice that amount in damages. That would be above and beyond the $10,000 in back wages that current law already requires such employers to pay.

“Wage theft is rampant in New York,” said Ana Maria Archila, co-executive director of Make the Road New York, a Brooklyn-based advocacy group for low-wage workers. “This bill will turn around the perverse economic incentives that currently encourage wage theft.”

The bill has been introduced in the State Senate and State Assembly.

For support, the bill’s backers cite a report by the National Employment Law Project [pdf] that found that the city’s low-wage workers experienced more than $18 million in wage violations each week, or nearly $1 billion a year. The report found that more than 300,000 low-wage workers in New York suffer wage violations each week, or $3,016 on average per year in minimum-wage, overtime and other wage violations.

Diane J. Savino, the bill’s sponsor in the Senate Senate and a Democrat representing portions of Brooklyn and Staten Island, said “Businesses that are good citizens and pay their employees exactly what is owed them and on time — as is required by law — should not be at a disadvantage to companies that are illegally withholding wages from their workers.”

The bill’s supporters say it will not only deter dishonest employers and protect law-abiding ones, but it will also help the state’s tax coffers because many companies that cheat their workers on wages also cheat the state by not withholding income taxes and not paying unemployment insurance taxes or workers’ compensation premiums.

The bill would strengthen requirements that employers provide pay stubs and accurate pay data and would make first-time wage offenses a felony in egregious instances.

To deter employers that might discourage victims from reporting wage theft, the bill would fine employers $10,000 for each retaliatory firing of a worker who speaks out against wage violations or files a wage claim.

The bill would create a private right of action to allow workers to bring lawsuits over violations of laws covering meal breaks, pay stubs and days of rest. To encourage reticent workers to come forward, the legislation would allow third-party groups to file complaints on their behalf.

Because many employers delay complying with back-pay judgments, the legislation would increase penalties by 30 percent against employers that do not pay wage judgments within 90 days.

“In industries that form the backbone of the emerging economy – retail, service, restaurants, construction – noncompliance with the basic protections of New York labor law is often the norm, not the exception,” said Deborah Axt, legal director for Make the Road New York. Unscrupulous employers drive down standards, benefiting from unfair competition with businesses that do comply with the law.

Ms. Axt added: “These reforms will make New York the leader in the fight to combat wage theft.”