Republican lawmakers in New York state are working to undo a 2010 anti-wage theft law that labor activists hailed as a landmark piece of legislation protecting workers from dishonest employers.
The law, called the Wage Theft Prevention Act, ramped up the penalties against employers who fail to pay workers what they are owed and also criminalized retaliation against employees who lodge complaints about pay. The law went into effect last spring.
Republicans in the GOP-led state Senate passed a bill last week that would nullify a portion of the law, and on Monday they approved a budget and jobs plan that recommends repealing the law entirely. Several legislators have argued that the law's requirements -- in particular, that employers provide detailed wage statements to workers each year -- are too onerous on businesses and stifle job growth. The Democratic-controlled State Assembly has not taken up the measures yet.
A wholesale or even partial repeal of the law would be a boon to unscrupulous businesses in the state, said Patrick Purcell, a spokesman for United Food and Commercial Workers Local 1500, which championed the wage theft measure in 2010.
"The only people who have to concern themselves with this law are thieves," said Purcell, adding that employers who withhold wages end up with an unfair leg up against their competitors. "This helps make sure that good, responsible employers are not losing out to less reputable ones. The real cost here is when good employers do the right thing and other employers are screwing them over."
The bill passed in the Senate last week would undo the wage statement requirement. Under the current law, employers must provide a notice to each employee annually showing the worker's rate of pay, regular payday and any allowances deducted for meals or lodging. The statement is meant to force employers to be transparent about matters of pay and help workers recoup wages later if they believe they've been shorted. A business that doesn’t keep a worker's wage notification form on file could be fined.
The sample form provided by the state is a single page. But Sen. John DeFrancisco, who sponsored the repeal bill, called the notification requirement a "massive, costly mandate on every employer in the state" and the wage theft law in general "a mountain of costly, useless paper."
"Other than costing businesses to lose countless hours and waste millions of dollars, this mandate has done nothing to help employees or create new jobs," DeFrancisco said in a statement. "We have to eliminate mandates like this to make New York more competitive so businesses can focus on growing and creating jobs rather than keeping track of more paper and paying fines if they don't."
Kenneth Pokalsky, vice president of government affairs at the Business Council of New York State, said that "employers large and small" have voiced concerns about the cost of complying with the wage statement requirement, arguing that it merely duplicates information already found on worker paystubs. "Compliance cost estimates for the extra notice are in the $50 to $100 million range, while adding little if any extra protections," Pokalsky wrote in an email. Eliminating the requirement, he said, would be "a limited and reasonable amendment" to the wage theft law.
But Purcell argues that the requirements are minimal and help protect workers, noting that last week celebrity chef Mario Batali settled a $5.25 million lawsuit with restaurant workers in New York over allegations of withholding tips. "This is a joke. It's one sheet of paper," he said. "If that’s what's stifling the economy of New York state, then we're all in a really bad place."
New York isn't the first jurisdiction to pass a wage theft law. Nor is it the first state whose Republican lawmakers have tried to repeal one that's made it into the books.
Florida's Miami-Dade County passed an ordinance in 2010 that established a grievance process for workers who claim they've been shortchanged. So far, it's helped workers in the Miami-Dade County area recoup nearly $400,000 in owed wages. But a GOP-sponsored bill now being considered by the Florida legislature would quash the Miami-Dade ordinance and nullify any similar wage-theft laws enacted on the local level.