Wage Theft Prevention Act of 2014 Provides More Effective Tools to Combat Wage Theft

Transcription

1 Wage Theft Prevention Act of 2014 Provides More Effective Tools to Combat Wage Theft MWELA Brown Bag September 10, 2014 Moderator: Omar Melehy, Melehy & Associates Panelists (all from the Employment Justice Center): Barbra Kavanaugh, Executive Director Ari Weisbard, Deputy Director Andrew Hass, Litigation Counsel

2 Agenda 1. Passing the Act 2. Important Provisions a. Written Notice of Employment Terms b. Statute of limitations c. Class v. Collective Action d. White collar exemption removed in WPCL e. Adjusted Laffey rates f. Similarly situated analysis restricted g. MWRA allows 2x-4x damages h. Potential general contractor liability i. Other provisions 3. Q & A

3 Wage Theft Prevention Act of 2014 B Available at: us/legislation/b ? FromSearchResults=true

4 Passing the Act

5 Effective Date -? Second vote: July 14, 2014 Mayor has not yet signed, but is expected to 30-day Congressional review follows Estimate: February 2015

6 What s in it?

7 Notice of Employment Conditions Required at Time of Hire D.C. Code (c) All D.C. employers must provide, at the time of hire, a notice that includes: Name of employer and d/b/a name Physical address of employer, and a mailing address if different Telephone number of employer Employee s rate of pay Basis of pay (salary, hourly, piece, commission, allowances, prevailing wage) Employee s regular payday Notice must be in English and in employee s primary language

8 No/Insufficient Notice Tolls Statute of Limitations, Counts Against Credibility 1. D.C. Code (d): The period prescribed in section 14 shall not begin until the employee is provided all itemized statements and written notice required by subsections (b) and (c) of this section. 2. D.C. Code (d): If an employer fails to comply with this subsection or subsection (c) of this section, the failure shall constitute evidence weighing against the credibility of the employer s testimony regarding the rate of pay promised.

9 Class Actions Allowed Under DCMWRA 1. Collective Action Language in DCMWRA Out Former D.C. Code (b): No employee shall be a party plaintiff to any action brought under this sub-chapter unless the employee gives written consent to become a party and the written consent is filed in the court in which the action is brought. 2. Driscoll v. George Washington Univ., No , 2012 U.S. Dist. LEXIS , *22 (D.D.C. Sept. 10, 2012) ( The Court concludes that the DCMWA's opt-in mechanism confers substantive rights such that application of Rule 23 in these circumstances would violate the Rules Enabling Act. The opt-in requirement is part of [D.C.'s] framework of substantive rights or remedies. )

10 Class Actions Allowed Under DCMWRA D.C. Code b: A civil action may be commenced according to section 8 of Title I of the Wage Payment Act....

11 DCMWRA Now Uses DCWPCL Class Remedies D.C. Code (a)(1): Actions may be maintained by one or more employees who may designate an agent or representative to maintain such an action on behalf of themselves and others similarly situated. 9th Circuit s conclusion on similar language in pre-1947 FLSA: The employer, if in doubt who the [class members] were was entitled to move under Rule 12(e) of the Federal Rules for a more specific statement or for a bill of particulars. The provisions of the Act permitting resort to representative suits should be liberally administered by the courts, since encouragement of the practice will redound to the advantage of employer and employee alike through avoidance of a multiplicity of suits. Culver v. Bell & Loffland, 146 F.2d 29, 31 (9th Cir. 1945) 43 P.S. Section 260.9(a)(b); see Braun v. Wal Mart Stores, Inc., 24 A.3d 875, (Pa.Super.Ct.2011) (interpreting the law as permitting class actions)

12 White Collar Workers No Longer Exempt from DCWPCL D.C. Code Definitions (2) Employee shall include any person suffered or permitted to work by an employer except any person employed in a bona fide executive, administrative, or professional capacity (as such terms are defined by regulations promulgated by the Council of the District of Columbia)

13 Adjusted Laffey Rates D.C. Code (b)(1): In any judgment in favor of any employee under this section, and in any proceeding to enforce such a judgment, the court shall award to each attorney for the employee an additional judgment or for costs including attorney s fees computed pursuant to the matrix approved in Salazar v. District of Columbia, 123 F.Supp.2d 8 (D.D.C. 2000), and updated to account for the current market hourly rates for attorney s services. The court shall use the rates in effect at the time the determination is made.

14 Adjusted Laffey Matrix - Salazar v. District of Columbia, 123 F.Supp.2d 8 (D.D.C. 2000) Years Out of Law School Year Paralegal/Clerk /01/14-5/31/15 $179 $328 $402 $581 $655 $789

15 Costs - Expert witness and other costs included D.C. Code (b)(3): Costs shall also include expert witness fees, deposition fees, witness fees, juror fees, filing fees, certification fees, the costs of presenting and collecting evidence, and any other costs incurred in connection with obtaining, preserving, or enforcing the judgment or administrative order.

16 Similarly situated defined - what it is D.C. Code (a)(2): For the purposes of this subsection, 2 or more employees are similarly situated if they: (A) Are or were employed by the same employer or employers, whether concurrently or otherwise, at some point during the applicable statute of limitations period; (B) Allege one or more violations that raise similar questions as to liability; and (C) Seek similar forms of relief....

17 Similarly Situated defined - what it isn t (3) Employees shall not be considered dissimilar under this subsection solely because their: (A) Claims seek damages that differ in amount; or (B) Job titles or other means of classifying employees differ in ways that are unrelated to their claims. [I]f adjudicated on a classwide basis, this case would require a cumbersome, individualized analysis of each class member's particular factual circumstances. Syrja v. Westat, Inc.,756 F. Supp. 2d 682, 690 (D. Md. 2010)

18 2x - 4x Damages Now Allowed Under the DCMWRA D.C. Code b(b)(1): Except as provided in paragraph (2) of this subsection, any employer who pays any employee less than the wage to which that employee is entitled under this act shall be liable to that employee in the amount of unpaid wages, statutory penalties, and an additional amount as liquidated damages equal to treble the amount of unpaid wages. (2) The court may award an amount of liquidated damages less than treble the amount of unpaid wages but not less than the amount of unpaid wages.

19 General Contractor Liability D.C. Code b(c): When the employer is a subcontractor alleged to have failed to pay an employee any wages earned, the subcontractor and the general contractor shall be jointly and severally liable to the subcontractor s violations of this act. The subcontractor shall indemnify the general contractor for any wages, damages, interest, penalties, or attorneys fees owed by the general contractor as a result of the subcontractor s violations of this act, unless those violations were due to the general contractor s lack of prompt payment in accordance with the terms of the contract between the general contractor and subcontractor.

20 General Contractor Liability - continued Liability, but indemnification for General Contractors Burden to prove they promptly paid under terms of the contract Mid-level subcontractors?

21 Other Provisions Formal hearings, default judgments Retaliation protections Increased civil, administrative, and criminal penalties

22 Formal hearings and enforceable judgments Then: workers who filed their claims at the DC Office of Wage- Hour (OWH) received an informal meeting with an investigator and a mediation with their employer if they were lucky. The meetings were not held on the record and often did not lead to any resolution. NOW: Victims of wage theft can receive a prompt & formal initial determination by the Office of Wage- Hour. If necessary, this can be followed by a formal hearing by an administrative judge.

23 Formal hearings and enforceable judgments D.C. Code a Increased due process protections: The OWH must issue a written formal decision within 60 days. (If they don t, claimants can get an ALJ hearing instead.) Either side can appeal that decision to an administrative law judge. ALJs have the power to call witnesses, review testimony and evidence, and issue formal rulings. ALJs can issue default judgments if businesses fail to appear and contest a case.

24 Anderson v. Mt. Clemens Pottery Standard Applies in Formal Hearings (4) The burden of proof by a preponderance of the evidence shall rest upon the complainant, but shall shift to the respondent when the following conditions are met: (A) A respondent failed to keep records of an employee's hours worked, or records of compensation provided to an employee are imprecise, inadequate, missing, fraudulently prepared or presented, or are substantially incomplete; and (B) A complainant presents evidence to show, as a matter of just and reasonable inference, the amount of work done or the extent of work done or what compensation is due for the work done.

25 Expanded Retaliation Protections D.C. Code (a)(3) - Types of retaliation: Discharge, threaten, penalize, or in any other manner discriminate or retaliate against any employee or person Actions protected from retaliation: (A) Made or is believed to have made a complaint to his or her employer, the Mayor, the Attorney General, any federal or District employee, or to any other person that the employer has engaged in conduct that the employee, reasonably and in good faith, believes violates any provision of this act, or any regulation promulgated pursuant to this act; (B) Caused to be instituted or is about to institute a proceeding under or related to this act; (C) Provided information to the Mayor, or the Attorney General, or any federal or District of Columbia employee; (D) Testified or is about to testify in an investigation or any proceeding filed under this act; or (E) Exercised rights protected under this act.

26 Rebuttable presumption of retaliation D.C. Code (b) The employer, or any person acting on behalf of the employer, taking adverse action against an employee within 90 days of an employee or other person s [filing of a complaint, etc.] shall raise a presumption that such action is retaliation, which may be rebutted by clear and convincing evidence that such action was taken for other permissible reasons. Penalties for retaliation of between $1,000 and $10,000

27 Increased penalties to encourage businesses to follow the law Criminal penalties (a) Any employer who negligently fails to comply with the provisions of this act or the Living Wage Act shall be guilty of a misdemeanor and, upon conviction, shall be fined: (A) For the first offense, an amount per affected employee of not less than the amount of wages owed, but not less than $1,000; or (B) For any subsequent offense, an amount per affected employee of not less than double the amount of wages owed, but not less than $2,500. (a-1) Any employer who willfully fails to comply with the provisions of this act or the Living Wage Act shall be guilty of a misdemeanor and, upon conviction, shall be fined: (A) For the first offense, be fined $2,5000 plus an amount per affected employee of not less than double the amount of wages owed, or imprisoned for up to 30 days, or both; or (B) For any subsequent offense, $5,000 plus an amount per affected employee of not less than treble the amount of wages owed, or imprisoned for up to 90 days, or both.

28 Increased penalties to encourage businesses to follow the law - continued Administrative penalties (1) In addition to and apart from any other penalties or remedies provided for in this act or the Living Wage Act, the Mayor shall assess and collect administrative penalties as follows: (A) For the first offense, $50 for each employee or person whose rights under this act or the Living Wage Act are violated for each day that the violation occurred or continued; or (B) For any subsequent offense, $100 for each employee or person whose rights under this act or the Living Wage Act are violated for each day that the violation occurred or continued. (2) In addition to the administrative penalties set forth in paragraph (1) of this subsection the Mayor shall collect administrative penalties in the amounts set forth below for the following violations: (A) Five hundred dollars for failure to provide notice of investigation to employees as required by section 8a(c)(5); and (B) Five hundred dollars for failure to post notice of violations to the public, as required by section 8a(h)(2).

29 Increased penalties to encourage businesses to follow the law - continued Employers found to have committed wage theft have to pay the costs of the investigation to DOES and the Office of Attorney General (D.C. Code (e)). When businesses fail to pay an award after being ordered to do so, their business licenses may be suspended (D.C. Code a(i)).

30 Retroactive application? No language in the statute suggesting retroactive application of any specific section Lacek v. Wash. Hosp. Ctr. Corp.,978 A.2d 1194, 1197 (D. C.2009) ( There is a presumption that legislation that affects substantive rights will operate only prospectively. By contrast, laws which provide for changes in procedure may properly be applied to conduct which predated their enactment. ) Landgraf v. Usi Film Prods.,511 U.S. 244, (U.S. 1994) ( [T]he court must ask whether the new provision attaches new legal consequences to events completed before its enactment. )

31 Questions?