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The District of Columbia’s new Wage Theft Prevention Act makes major changes in employer liability for failing to fully compensate employees for work completed. Offenses include paying subminimum wages, denying tips or not paying earned overtime pay.
The official effective date of the new law is Jan. 14, 2015, but the actual effective date may occur up to a month later, depending on the necessity of action by the new Congress.
The bill sharply increases the penalty—currently set at $300—for employers found guilty of the prohibited acts. The new minimum penalty will be $10,000 for a first offense and up to $25,000 for subsequent offenses. If an offense is willful, the employer may be fined $25,000 for the first offense and $50,000 for subsequent offenses, and spend up to 90 days in jail. A company may also be subject to denial or suspension of a business license if it has been found guilty of a wage theft offense in the past three years or failed to comply with a wage theft-related administrative order.
The new law requires employers, within 90 days of the effective date, to provide employees with an updated written notice listing: a) employer contact information and b) the employee’s rate of pay and the basis of that rate. Failure to provide notice to an employee will constitute evidence weighing against the credibility of the employer’s testimony regarding the promised rate of pay. The employer must also retain proof that this notice was given to each employee.
Diane Cadrain is an attorney who has been writing about employment law issues for more than 20 years.
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