Local ordinances prohibiting “wage theft” are gaining popularity. Cities are responding to activism around this issue by creating their own enforcement mechanisms beyond state and federal measures. “Wage theft” generally refers to any underpayment of wages by an employer, whether intentional or inadvertent, such as failing to pay overtime, making unlawful deductions from pay, or not properly sharing tips designated for employees. Houston and New Brunswick, New Jersey are among the most recent cities to enact such ordinances. New York City, Seattle, and Chicago enacted similar ordinances in recent years. These ordinances vary in the specifics, sometimes providing for monetary damages to the affected employees and other times penalizing employers by revoking operating licenses or blacklisting them from city contracts. Depending on the nature of the business, such penalties can threaten the entire company.
While local ordinances are gaining popularity, state and federal laws also prohibit wage theft and impose severe penalties. With increased enforcement of these laws and more litigation by employees to recover unpaid wages, employers cannot afford to be out of compliance. Working with counsel familiar with the nuances of wage-and-hour laws, employers should find and fix violations before they are audited or sued.
Brody and Associates regularly advises management on complying with state and federal employment laws including wage-and-hour laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.
