Why it matters

A new bill would make violations of the Fair Labor Standards Act (FLSA) costlier for employers, establishing a $2,000 civil penalty for non-willful violations of the statute and increasing the penalty for willful or repeat violations to $10,000. “While a majority of employers are playing by the rules, wage theft is a real problem,” Sen. Al Franken (D-MN) said about the measure, which he co-sponsored. “Our bill will combat this crooked practice by giving each worker the tools to make sure that employers aren’t shortchanging workers’ hours or overtime pay.” Pursuant to the legislation, employers would be required to provide regular pay stubs to each employee and disclose the terms of employment when the relationship begins. The bill would also extend the time for recovery under the FLSA to four years (and five years for willful violations).

Detailed discussion

Penalties against employers would be increased pursuant to a new bill introduced by a group of Democratic legislators.

The Wage Theft Prevention and Wage Recovery Act, backed by Sens. Patty Murray (D-WA), Sherrod Brown (D-OH) and Al Franken (D-MN), as well as Reps. Rosa DeLauro (D-CT) and Bobby Scott (D-VA), would establish a civil penalty of $2,000 for the failure of employers to pay minimum wage and overtime.

The existing penalty for willful or repeat violations would jump to $10,000.

In addition, the measure would require employers to disclose the terms of employment at the beginning of the relationship and provide regular pay stubs to each employee. Violations of these requirements would cost employers $50 for the first violation and $100 for each subsequent violation.

The statute of limitations under the FLSA would also be extended pursuant to Senate Bill 1652, stretching the time during which workers can recover wages from two years to four years, with an increase in the period for willful violations from three years to five years.

According to the findings in the bill, wage theft “poses a serious and growing problem across industries” in the United States, estimated to cost employees $15 billion per year, with a disproportionate impact on women, immigrants and minorities.

After being read twice, the legislation was referred to the Committee on Health, Education, Labor, and Pensions.

To read Senate Bill 1652, click here.