As DC employers prepare to ring out the old year, unfortunately they must prepare to ring in a new year that will bring with it the last thing any employer needs: a new employment form to fill out for every employee.
On September 19, 2014, District of Columbia Mayor Vincent Gray signed the Wage Theft Prevention Amendment Act of 2014 (the "Act"). In addition to requiring a new notice to every employee, the Act amends several existing DC wage payment laws (the Accrued Sick and Safe Leave Act, the Living Wage Act, the Minimum Wage Revisions Act, and the Wage Payment and Wage Collection Law) by increasing penalties under existing laws and clarifying administrative procedures and legal standards for adjudicating wage disputes under those laws. The new law likely will take effect early next year, as explained below.
The New Notice Requirement
The new law requires employers to provide a written notice to current and future employees that contains:
- The name of the employer and any "doing business as" names used by the employer;
- The physical address of the employer's main office or principal place of business, as well as a mailing address, if different;
- The telephone number of the employer;
- The employee's rate of pay and the basis of that rate, including by the hour, shift, day, week, salary, piece, and/or commission;
- Any allowances claimed as part of the minimum wage, including tip, meal, or lodging allowances;
- Overtime rate of pay and exemptions from overtime pay;
- The living wage and exemptions from the living wage;
- The applicable prevailing wages; and
- The employee's regular payday designated by the employer.
Getting the contents right is necessary but not sufficient. The notice must be both in English and in an employee's primary language if it is other than English. Employers must provide the notice to current employees within 90 days of the Act's enactment, and to new employees when hired. An updated notice is required when any of the notice items change (e.g., the employee receives a raise, or the employer's business address changes). The Act requires the mayor to provide employers with a sample template of the required notice within 60 days of the effective date of the Act, but it is unclear whether non-English sample notices also will be provided.
The Act increases penalties for failing to maintain proper records of employee work hours and compensation. Employers must retain signed and dated copies of the newly required written notices as proof of the employee's acknowledgment of receipt of the notice. Failure to comply could result in a $500 penalty for each failure to maintain payroll records or to provide employees with an itemized wage statement or written notice.
The Act strengthens anti-retaliation protections for employees who report violations, initiate a proceeding, provide information, or testify under the Act. The new law also strengthens the anti-retaliation provisions of the Living Wage Act (which requires overtime compensation as well as a minimum wage). The new anti-retaliation provision permits an employee to sue an employer in court or in an administrative proceeding. Penalties include:
- Civil penalties from $1,000 to $10,000;
- Liquidated damages in an amount equal to the civil penalties;
- Front pay, lost compensation, costs, and reasonable attorney fees;
- Reinstatement of the employee; and
- Other forms of equitable relief.
Employers will be subject to a number of new penalties for violations under the Act. They include:
- Liquidated damages equal to treble the amount of unpaid wages for violations of the Wage Payment Act;
- Denial of a business license for 3 years for willful violations and suspension of a business license for failure to comply with administrative orders or conciliation agreements within 30 days of issuance;
- Expanded fines up to $10,000 or imprisonment up to 6 months for employers who negligently commit violations of the Minimum Wage Act (previously, only employers who acted willfully were subject to such penalties); and
- Misdemeanor liability and fines for employers who negligently fail to comply with this Act or the Living Wage Act.
Upon signing the legislation, Mayor Gray wrote to the DC City Council to express concern that, among other things, it could potentially make employers liable for "unlimited penalties" for a willful violation. The mayor also noted that the DC City Council has promised to work with the mayor on amendments to address his concerns before it takes effect. We will advise you of any such development.
What Should Employers Do?
Given the detailed and technical changes made to the DC laws covered by this new legislation, employers must carefully evaluate the new requirements of the Act to ensure compliance and avoid penalties. To prepare, employers should:
- Gather the required information and draft the notices now, particularly if an employer must draft notices in languages in addition to English;
- Revise record-keeping procedures and correct all employee records as of October 1, 2014;
- Review all pay policies, procedures, and practices to ensure they comply with DC law;
- Update retaliation policies, if necessary; and
- Train appropriate personnel as to all of the foregoing.
When Does the New Law Take Effect?
The new law becomes effective following a 30-day congressional review period. The Act was published in the District of Columbia Register on October 3, 2014. The 30-day review period counts only days in which Congress is actually in session (i.e., not weekends, holidays, or other days during which Congress does not convene). The Act was submitted to Congress on November 21, 2014. The DC Council's legislative tracker currently estimates the law will take effect on January 14, 2015.
Employers should not wait for the law to become effective to take action to correct any potential problems, because the new law will apply to all violations occurring after October 1, 2014.
One final word: If the notice requirement of the DC Wage Theft Prevention Amendment Act seems cumbersome, take heart – maybe. In 2010, New York passed a similar wage theft law, with a notice requirement and increased penalties. On June 19, 2014, the New York State Assembly and Senate voted to eliminate the notice requirement, which State Assembly Speaker Sheldon Silver called "a very cumbersome burden to businesses operating around the state." However, the legislation removing the notice requirement has not yet been signed by Governor Cuomo.