| AI Summary |
Section 1: Expanding the Definition of "Employer"
- Change: An "employer" now includes individuals who own or control at least 25% of a business.
- Impact: Broadens liability for wage and hour violations to include individuals with significant ownership stakes.
Section 2: Minimum Wage Protections
- Change: Employers cannot deduct from payroll in a way that reduces a worker's pay below the applicable minimum wage.
- Impact: Strengthens minimum wage enforcement by closing loopholes.
Section 3: Penalty Waivers
- Change: The division director can waive penalties for late wage payments if specific conditions are met.
- Impact: Provides flexibility for employers who can demonstrate mitigating circumstances.
Section 4: Attorney Fees and Equitable Relief
- Change:
- Courts can no longer award employers attorney fees in civil cases about unpaid wages.
- Courts can grant equitable relief (e.g., injunctions) to deter violations and prevent unjust enrichment.
- Impact: Shifts focus from punishing employees to preventing employer misconduct.
Section 5: Wage Claim Limits and Adjudication
- Change:
- Raises the claim limit for wage disputes adjudicated by the division from $7,500 to $13,000 by 2026, with inflation adjustments starting in 2028.
- Requires the division to determine if violations are willful.
- Mandates public reporting of violations and informs government bodies to take action against noncompliant employers.
- Removes the 90-day limit for resolving wage complaints.
- Impact: Expands the division's authority, increases transparency, and strengthens penalties for noncompliance.
Section 6: Misclassification Fines
- Change:
- Introduces significant fines for misclassifying employees as nonemployees:
- $5,000 for willful violations.
- $10,000 if not remedied within 60 days.
- Up to $50,000 for repeat offenses.
- Adjusts fines for inflation starting in 2028.
- Reduces the waiting period for employees to receive wages from the wage theft enforcement fund from 6 months to 120 days.
- Impact: Creates stronger financial disincentives for misclassification and ensures quicker wage recovery for employees.
Section 7: Anti-Retaliation Protections
- Change:
- Expands protections against retaliation for employees and other individuals involved in wage and hour law claims.
- Requires consideration of timing between protected activity and adverse actions to assess retaliation claims.
- Declares using immigration status to undermine wage claims as unlawful intimidation.
- Allows the division to award attorney fees and costs in discrimination or retaliation cases.
- Impact: Enhances protections for vulnerable workers and provides clearer guidelines for addressing retaliation.
General Takeaways
- The bill aims to:
- Strengthen wage and hour law enforcement.
- Expand protections for workers, especially against retaliation and misclassification.
- Increase accountability for employers, including those with significant ownership stakes.
- Enhance transparency and public awareness of violations.
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| Summary |
Section 1 of the bill amends the definition of employer for
purposes of wage and hour laws to include an individual who owns or
controls at least 25% of the ownership interest in an employer.
Section 2 prohibits an employer from making a payroll deduction
below a worker's applicable minimum wage.
Section 3 allows the director of the division of labor standards and
statistics (division) to waive the penalty for an employer's failure to pay
claimed wages or compensation within 14 days after a written demand if
certain specified conditions are met.
Section 4 repeals language allowing a court to award an employer
reasonable costs and attorney fees in a civil action for unpaid wages or
compensation in certain circumstances. In such an action, the court may
pursue all equitable relief to deter future violations and prevent unjust
enrichment.
Current law limits the ability of the director of the division to
adjudicate claims for nonpayment of wages or compensation to $7,500 or
less. Section 5 increases this threshold over the years by increasing the
amount to $13,000 for claims filed from July 1, 2026, through December
31, 2027, and in an amount specified by the director of the division to
adjust for inflation beginning January 1, 2028. Section 5 also requires the
division, in adjudicating wage claims, to determine whether a violation
is willful. For each violation:
•
The director shall publish on the division's website the
names of all employers found to be in violation and
whether the violation was willful; and
•
If the violation is not remedied within 60 days after the
division's finding that there was a violation, the division
must notify all government bodies with the authority to
deny, withdraw, or otherwise limit or impose remedial
conditions on the employer's license, permit, registration,
or other credential.
Additionally, the division may report an employer found to have
violated a law related to wages and hours to any government body with
authority to deny, withdraw, or otherwise limit or impose remedial
conditions on a license, permit, registration, or other credential that the
violating employer has or may seek. Section 5 also repeals language
requiring the division to issue a determination on a wage complaint
within 90 days.
Section 6 requires an employer found to have misclassified an
employee as a nonemployee to pay a fine in the following amounts, in
addition to any other relief ordered:
•
For a willful violation, $5,000;
•
For a violation not remedied within 60 days after the
division's finding, $10,000;
•
For a second or subsequent willful violation within 5 years,
$25,000; or
•
For a second or subsequent willful violation not remedied
within 60 days after the division's finding, $50,000.
The director of the division must adjust these fine amounts for
inflation by January 1, 2028, and every other year thereafter.
Section 6 also decreases the amount of time the division must wait
before paying an employee out of the wage theft enforcement fund from
6 months to 120 days.
Current law prohibits an employer from discriminating or
retaliating against an employee for taking protection under wage and hour
laws or the law related to the employment of minors. Section 7 expands
this provision to specify additional protected behavior and expands the
prohibition to include other persons in addition to employers.
Section 7 also:
•
Requires a fact finder to consider the time between an
individual's exercise of a protected activity and an
employer's adverse action when determining whether an
employer has retaliated against the employee or worker;
•
Specifies that any effort to use an individual's immigration
status to negatively impact the wage and hour law rights,
responsibilities, or proceedings of any employee or worker
is an unlawful act of intimidation, threatening, coercion,
discrimination, and retaliation; and
•
Allows the division to order reasonable attorney fees and
costs after investigating a discrimination or retaliation
claim.
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