Not Paying Overtime May Result in Loss of Your Business License

by Michael Haberman on February 12, 2013 · 0 comments


 

"Wage theft can result in the lose of you business license.

“Wage theft can result in the lose of you business license.

Perhaps it started with Hilda Solis, the Secretary of Labor, announcing that employers were stealing a $1,000,000 a week from their employees and she was the new sheriff in town and she was going to correct that. But since then a number of states and municipalities have been passing “Wage Theft” laws. Additionally, the City of Chicago has jumped into the game and have passed an ordinance that allows them to yank the business license of any business they deem to have not abided by wage laws. Here is a rundown in some of those enacted statutes.

Illinois passed the Illinois Wage Theft Enforcement Act. This new law increased the criminal penalties for violations of the already existing Wage Payment and Collection Act. It made the willful failure to pay wages owed a misdemeanor. There were two classes of misdemeanor depending on whether the wages owed were over $5000 or under. A repeated violation within two years becomes a felony.

City of Chicago Ordinance 2012-8533. According to the attorneys at Jackson Lewis in Chicago, the Chicago City Council unanimously passed an ordinance that defined wage theft as “as violating wage laws, for example, by failing to pay workers overtime or minimum wage.” According to Chicago Enacts New Penalties for ‘Wage Theft’ the ordinance empowers the Commissioner with the ability to either deny a business a license or to penalize an existing business if the business has “…admitted guilt or has been found liable for wage violations in a judicial or administrative proceeding during the five-year period prior to the date of application.”

New York passed the Wage Theft Prevention Act. It requires that new hires receive a wage notice within 10 days of hire. This notice must include the basis for how the worker is paid, i.e., salary, hourly, or by commission. It also must include if the employer intends to take any allowances. It increased penalties and notice requirements.

Miami-Dade County in Florida enacted an ordinance that deemed the non-payment of wages to be a form of theft. The ordinance, as originally enacted, required employers to pay their employees for worked performed within 14 days of the date the work was performed. The ordinance did provide an exception to allow employers to pay wages over 14 days, but no more than 30 days, as long as the employee agreed in writing to the arrangement. The “Wage Theft” ordinance applied to all private employers regardless of size.

And lastly is California. They passed two measures. The first doubles the amount of liquidated damages that employees can recover in minimum wage payments. Before this they were entitled to damages equal to the amount of unpaid wages. The second measure makes it a crime for an employer to fail to furnish an employee with a properly itemized wage statement. Violation of this law could result in jail time of up to 1 year or a $1000 fine, or both.

It is not inconceivable that other cities may look at adopting similar actions. New York, Detroit, San Francisco, Seattle? Who knows, but I would not be surprised to see this as a trend. So as you can see it is as important to pay attention to state and local legislation as it is Federal legislation. But then if were easy anyone could do it… oh wait isn’t that what management already thinks?

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