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Greater Boston Chamber of Commerce
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April 8, 2022
The Greater Boston Chamber of Commerce submitted further testimony on Docket #0188, Ordinance Preventing Wage Theft in the City of Boston. The Chamber continues to oppose wage theft in any form and supports strong enforcement of current state laws prohibiting wage theft by employers. However, I would like to reiterate the Chamber’s general concerns with the scope, ambiguity, and timing of this ordinance outlined in our original testimony submitted on March 31, 2022. As the Committee proceeds into a working session on Docket #0188, the Chamber would like to take the opportunity to highlight a few specific language problems within the proposed ordinance that underscore these concerns.
Section 2 Definitions
Several of the definitions under consideration are overly broad. One example is the definition of “employer” which includes “any natural person or business, whether or not incorporated or unincorporated, who suffers or permits another to work… (3) who otherwise maintains a commercial presence in the City of Boston.” This definition likely includes any employer that has any commercial connection to Boston, even if they do not actually employ anyone in Boston. The term “employer” is then used throughout the ordinance in different contexts, creating confusion over the obligations under the ordinance. In conjunction with the broad scope for “employer” are the definitions of “minimum wage” and “wage theft.” The definition of “minimum wage” includes violations of “any other state or federal statute or regulation establishing a minimum fair wage for particular occupations or classes of workers.” That term is then incorporated into the definition of “wage theft.”
The definitions outlined above have particular ramifications in section 6 of the proposed ordinance, though they also apply to other provisions. These broad definitions lead to a scenario where an employer with a multi-state presence may be prohibited from obtaining a license, or be required to report out-of-state violations of wage laws, due to the actions of individuals or agents not within their control or their ultimate responsibility. Examples may include franchisees, which generally operate independently from larger brands, but may be denied a license under the broad terms of this ordinance for violations in another state. Licensed employers are also required to post notices of wage violations occurring anywhere in the country locally in the City of Boston, and subject to draconian fines of $300 per day, regardless if the local entity is aware of or contributed in any manner to the wage violation.
The Chamber unequivocally opposes wage theft and believes that violators should be held responsible under existing laws. But it is important to ensure that only those that have direct control over those violations receive punishment, especially when the very existence of a business depends on a license from the City. The far-reaching definitions in this ordinance may lead to unintended consequences that significantly hurt our business climate. Definitions should be narrowed to specify illegal conduct in Massachusetts by employers located in Boston with direct control over wage decisions.
Fact Finding and Appeals Processes
The proposed ordinance gives the City wide latitude to revoke contracts, licenses, and permits of employers that violate wage laws. However, the ordinance does not outline any fact finding or appeals process for such actions. It is unclear, for instance, under what circumstances these penalties can occur due to the unlawful conduct of a subcontractor when that conduct is outside of the control, and without the knowledge of, a general contractor. If a subcontractor receives a final determination of a wage violation, can a permit for an entire project be revoked? What happens if a general contractor is purposefully misled by a subcontractor? The ordinance also allows for stop work orders for a violation of a variety of requirements, without a process for appeal or otherwise determining responsibility on the part of a permit or license holder. Other than outlining a brief 30-day “conciliation process” in section 6 for license holders, there is little due process outlined in the ordinance, while creating enormous consequences for employers. The Committee should carefully consider adding an adequate process to the ordinance when the very existence of a business might be at stake.
Overall Scope, Complexity, and Context
The proposed ordinance creates elaborate and complex requirements for employers in order to conduct most business with the City. While large businesses with legal and compliance offices may have resources and expertise to help navigate these hurdles, small businesses or those trying to start a new business will find it difficult, if not impossible, to understand and comply with the ordinance’s requirements. Crafting the ordinance to encompass such a wide array of business interaction with the City will also impose these requirements on small, routine tasks that may not warrant such regulation. The Committee should consider methods to exempt both small employers and routine business transactions from the scope of the proposed ordinance. This approach is reflected in section 9 related to municipal building permits. Those thresholds should be increased, and the concept should apply throughout the proposal for requirements for contracting, construction, and licensing. This could be achieved by incorporating minimum contract values ($500,000 for example), exempting certain types of transactions, and/or applying requirements only to employers with 50 or more employees.