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March 31, 2022
The Greater Boston Chamber of Commerce submitted testimony on Docket #0188, Ordinance Preventing Wage Theft in the City of Boston. While the Chamber opposes wage theft in any form and supports strong enforcement of current state laws prohibiting wage theft by employers, the broad scope of the proposed ordinance and ambiguity over how the ordinance is enforced may lead to unintended consequences that will make it more difficult for employers to conduct business with the City. Additionally, legislative changes at the state level will have dramatic impacts on how the proposed ordinance is implemented, and the City should understand those impacts prior to moving forward with Docket #0188.
Wage theft is illegal in Massachusetts, and the Chamber supports vigorous enforcement of existing wage laws in the Commonwealth, including increasing resources for the Attorney General’s office to prosecute bad actors that do not properly compensate workers. Thanks to recent increases in budget funds for wage enforcement, the Attorney General’s office assisted over 10,000 employees impacted by employment law violations in 2021 encompassing wage, worker misclassification, and health and safety violations of employees. [i] The Chamber supports additional resources to ensure our state enforcement agencies have the tools needed to hold those who violate wage laws in the Commonwealth accountable.
State legislation is a more appropriate avenue to address policy issues related to the proper enforcement of wage laws, and ongoing debate on proposed wage theft legislation continues during this legislative session in the General Court. On March 28th, the Joint Committee on Labor and Workforce Development advanced wage theft legislation that may make this ordinance unnecessary and will likely change the context and applicability of the City’s ordinance. Statewide changes also avoid businesses having to navigate a patchwork of regulations that complicate an already uncertain business environment as the recovery from the COVID-19 pandemic continues.
That said, the Chamber recognizes that wage theft may occur in the Commonwealth and efforts to further prevent wage theft may be warranted. Identifying groups of workers that are vulnerable to wage theft, as the City partially endeavors when outlining its purposes for Docket #0188, could provide additional protections in specific and defined circumstances. However, the proposed ordinance goes well beyond targeted enforcement to encompass all city contracting, licensing, municipal building permitting, and Tax Increment Financing Agreements. The City interacts with numerous employers and businesses through contracting, permitting, or licensing processes, many of which provide services with little need for additional wage theft oversight. Applying such broad requirements on this vast array of employers only makes doing business with the City more difficult and complicates providing needed goods and services to the City, while also making the ordinance harder to enforce. Any proposed ordinance should be narrowly tailored to address specific activities where wage theft is a demonstrated concern.
Additionally, numerous instances of ambiguity within the proposed ordinance raise questions about compliance and the scope of enforcement. For instance, the definition of “employer” includes anyone who suffers or permits another to work “… or (3) who otherwise maintains a commercial presence in the City of Boston.” It is unclear where the bounds of this definition end, and whether employers with a national presence will in turn be responsible for reporting wage violations from across the country to the City of Boston, despite having no relation to employment activities in Massachusetts. Also unclear is the responsibility of general contractors for guaranteeing the behavior and accurate information provided by subcontractors, particularly if a general contractor is purposefully misled or otherwise had no knowledge of any misconduct of a subcontractor.
The ordinance also allows for the immediate denial and revocation of a license due to a wage violation, and creates a 30-day conciliation process for a licensee to settle any judgments against it. The denial or loss of a license to operate in the City effectively shuts down an employer permanently, possibly an extreme outcome depending on the specific violation in question. If proceeding with this ordinance, the Chamber encourages the City Council to strengthen both the hearing and conciliation processes within the ordinance, including details on how these processes will be deployed, what body will evaluate each situation, and what factors are considered, to ensure employers have adequate ability to both rectify outstanding employment issues and present accurate information in support of continued operation.
[i] https://www.mass.gov/doc/2021-labor-day-report/download
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