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Are Worker Misclassification and Wage Theft Laws the Solution?
With the advent of the Arizona Immigration law, SB 1070, the filing of Amicus Briefs by 27 states, and the challenge to the Arizona law, many of us are not watching the Wage Theft and Employee Misclassification movement underway in a large number of states.
This movement involves religious organizations like Interfaith Worker Justice and Centro de Trabajadores Unidos. It has spread through Florida, New York, Chicago, Iowa, New Jersey, New Mexico and New Hampshire. Most of the laws focus on the misclassification of workers as temporary or independent contractors where the result on the workers can be devastating and substantial. The laws impose stiff penalties on employers in a broad range of industries who have a history of wage theft through misclassification. [node:read-more:link]
The Wage Theft / Worker Misclassification Movement
Twenty-three states - make that thirty - have signed Wage Theft and/or Worker Misclassification bills into law as the focus in a number of legislatures has swung to the issue that is costing workers and taxing agencies billions of dollars in lost revenue.
Two bills, The Fair Playing Field Act, SB 3786, introduced by Senator Kerry and a number of cosponsors last week, together with The Employee Misclassification Prevention Act, HR 5107 will, when passed, crack down on those employers who do not pay overtime or who pay subminimum wages or misclassify workers as independent contractors when they are not.
California Attacks Misclassification and Wage Theft with New Laws
Governor Jerry Brown recently signed two new bills into law that will address the misclassification and wage theft issues in a much stronger fashion. According to an Advisory received by Construction Citizen and issued by the law firm of Epstein, Becker, Green, the two bills are:
“SB 459 directly impacts employers that classify workers as independent contractors.” This bill imposes steep civil penalties ranging from $5,000 – $25,000 per incident with the upper levels reserved for those firms that exhibit a pattern of violations. Additionally the penalties include the posting on the company’s website of a statement saying that they have been found guilty of a “serious violation of the law”. [node:read-more:link]
Wage Theft and Misclassification Report
An update of the 2010 report on wage theft in the 50 states was released by the Progressive States Network is entitled Where Theft is Legal: Mapping Wage Theft Laws in the 50 States. It was written by Tim Judson and Cristina Francisco-McGuire under the Progressive States Network with funding from the Ford Foundation and the Public Welfare Foundation.
Building on a series of previous studies that highlighted the current state of wage theft and misclassification throughout the United States, the report asserts that those studies show “states’ wage theft laws are grossly inadequate, contributing to a rising trend in workplace violations that affects millions of people throughout the country.”
The report points out that the enforcement mechanisms, even in states where there are laws, are also inadequate to the scope of the problem and that layoffs in response to economic pressures have crippled the needed enforcement. [node:read-more:link]
Illinois Passes Stiff Wage Theft Law
According to Employment Law Watch, “The Illinois Wage Theft Enforcement Act, S.B. 3568 (the "Act"), signed into law July 30, 2010, increases both civil and criminal penalties for violating the state's wage payment law, imposes new risks for employers who ignore or unsuccessfully challenge employees' wage claims, and creates a new cause of action for employees who face retaliation for having complained about unpaid wages. The Act will take effect January 1, 2011.”
This law is modeled after other recent wage theft laws in that it contains both civil and criminal penalties for misclassification and other forms of wage theft, but it contains an interesting twist