Wage theft demands legislative response, advocates say

By Katie Lannan and Colin A. Young

Supporters of legislation aimed at preventing wage theft painted a picture of an urgent need for action on Tuesday, telling lawmakers that Massachusetts workers across all industries are denied hundreds of millions of dollars annually.

A bill (S 999/H 1033) filed by Sen. Sal DiDomenico and Rep. Aaron Michlewitz seeks to prevent wage law violations by allowing the issuance of stop-work orders until violations are corrected and giving Attorney General Maura Healey's office the power to bring wage theft cases to court for civil damages.

"We've seen people not get paid for months on end," Steve Joyce of the New England Regional Council of Carpenters told the Labor and Workforce Development Committee. "They're selling what they have in order to live. That's just wrong, and you have the opportunity to change this by passing this bill."

Eleven months into the 2017 fiscal year, Healey's office has received 16,000 calls to its wage theft hotline, or about 70 per day, said Cynthia Mark, the chief of Healey's Fair Labor Division. More than 5,000 complaints have been made to the office, and the division is on track to resolve nearly 600 cases through citation or settlement. It has ordered employers to pay almost $5 million in restitution in and more than $2 million in penalties to the state's general fund.

The bill is opposed by business groups, 16 of which signed on to a letter to the committee arguing that the solution to wage theft is not in a new law "but rather in enhanced enforcement efforts and additional funding for the Attorney General's office to enable her staff to use the tools currently in place."

"This bill, in its current form, will unfairly punish legitimate and law-abiding companies in all industries across Massachusetts who contract with other businesses for services, but have no control over the operations of those independent businesses," said the letter, signed by the Associated Industries of Massachusetts, Greater Boston Chamber of Commerce, NAIOP Massachusetts, the Retailers Association of Massachusetts and other groups. "If a company violates the current laws, the company in violation should be penalized through existing statutes and regulations, which ensure fair and timely payment of wages."

Mark said the office receives most of its wage theft complaints from restaurants and the construction industry but called it "surprising, actually, how widespread" wage theft is, affecting doctors, nurses, cleaners, landscapers, home health aides, and members of other fields.

Mark highlighted a recent case, where the Lowell-based reusable grocery bag manufacturer UnWrapped agreed in March to pay nearly $1.2 million, including restitution to more than 550 workers, to resolve allegations of wage law violations and retaliation against employees. Healey's office last week announced it had cited three staffing agencies more than $80,000 for their role in depriving the workers of minimum wage and overtime pay.

Supporters of the bill said wage theft happens in many ways, such as forcing workers to work off the clock, incorrectly classifying employees as independent contractors, writing bad paychecks, denying an employee benefits, underpaying, or simply not paying workers.

Wage theft costs Massachusetts residents an estimated $700 million each year in stolen and unpaid wages, according to Community Labor United, and particularly hurts immigrants and families trying to move up into the middle class.

DiDomenico said the issue is gaining traction this session and he has heard from businesses that are "very, very happy" with the idea of the bill because they are working in an unfair landscape where "bad guys have a competitive advantage over the good guys" who pay workers fairly.

"This session, there is a strong group of individuals and organizations behind this bill," he said. "This is the year to get this done."

More than half of House lawmakers – 104 representatives – have joined Rep. Aaron Michlewitz as cosponsors of the bill. Last session's House bill had 76 cosponsors.

The Senate last year backed the bill nearly unanimously, passing it on a 38-2 vote about two weeks before the end of formal sessions for the year. It was sent the House Ways and Means Committee and did not emerge for a vote.

"Last year we thought we had it," Steve Tolman, president of the Massachusetts AFL-CIO, told the committee. "I know that the Senate passed it, and this year I want to implore you to get this moving. Somebody said that it should happen this year, but even before the break. This bill is about stealing people's wages."