Proposed “Wage Theft” Amendment Could Dramatically Alter FLSA Rights & Remedies

Earlier this month, Democrats within the Home of Representatives launched the “Wage Theft Prevention and Wage Recovery Act” (“Act”). This proposed laws seeks to amend the Federal Labor Requirements Act (“FLSA”) in a number of key methods.

First, the Act would require all employers to supply common pay stubs and preliminary wage disclosures.

Second, the Act would change wage restoration by requiring fee at an worker’s agreed-upon wage price, fairly than on the minimal wage or minimal additional time wage charges, which the FLSA has by no means achieved and has historically been inside the purview of state legal guidelines. This may explicitly embody charges set forth in collective bargaining agreements.

Third, the Act would change ultimate paychecks by requiring full fee of any remaining wage to be offered the sooner of the scheduled payday or 14 days of termination.

Fourth, the Act would require employers to maintain worker data for 5 years, and allow inspection of such data inside 21 days of any worker request.

Fifth, the Act would change FLSA collective actions from an “opt-in” mannequin to an “opt-out” mannequin, just like most present class actions and a big departure from the way in which FLSA consultant actions have ever functioned.

Sixth, the Act would invalidate and prohibit all arbitration agreements and sophistication motion waivers arising beneath the FLSA, overturning Supreme Court docket precedent.

Lastly, the Act would improve each civil penalties and recoverable damages for almost all violations.   

Approaching the heels of Congress passing a regulation prohibiting the enforcement of pre-dispute arbitration agreements in sexual assault and sexual harassment claims a number of months in the past, the Act seems to be a part of a broader pattern disfavoring the usage of arbitration agreements, along with creating numerous extra federal rights. If efficiently enacted, this laws would upset in any other case well-settled authorized doctrines, similar to these surrounding the Labor Administration Relations Act, and improve each the danger and severity of FLSA collective actions.

Past extra risk of litigation, this Act would seemingly improve the frequency and scope of investigations and enforcement actions by the Division of Labor’s Wage and Hour Division (“Division”). For instance, this laws would require the Division to implement collective bargaining agreements and different contracts, which it has not achieved beforehand. Some have commented that these necessities would pressure the already overburdened company, such that elevated actions wouldn’t be a right away end result. Others, similar to invoice co-sponsor Bobby Scott (D-Va.), have famous that the Chair of the Home Appropriations Committee, Rosa DeLouro (D-Conn), is an avid invoice sponsor, and can be well-placed to make sure that the Division has the sources required to start concentrating on employers for enforcement.

Whereas no speedy steps are required, because it stays to be seen whether or not the invoice will move the Home and transfer to the Senate, this proposed laws is a useful reminder that it’s far simpler to construct a airplane on the bottom than it’s to attempt to construct it within the air. Employers will wish to guarantee compliance with relevant state regulation on worker data, pay practices, and pay disclosures, in addition to monitor compliance with collective bargaining agreements and different worker contracts, nicely upfront of this invoice’s theoretical passage.

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