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First and foremost, the Greater Boston Chamber of Commerce staunchly opposes wage theft in any form. Improperly delaying or withholding wages for work has no place in the Commonwealth. However, the proposed legislation, H. 4681 An act to prevent wage theft, promote employer accountability, and enhance public enforcement, raises several concerns for the state’s employers and the negative impact it would have on our business climate.
Joint and several liability (vicarious liability)
The proposed draft creates vicarious liability through its joint and several liability provisions in the proposed Section 148E for multiple levels beyond the direct employer or contractor. We oppose language that creates liability beyond the direct employer or contractor.
The proposed vicarious liability would expose all employers to civil liability for wage violations against workers who are not their employees. This means that an employer could be responsible for the actions of any contractor or subcontractor they do business with, regardless if whether had control or knowledge of the wage violation. This is an aggressive approach that places an inordinate liability on employers for the actions of a contract two levels removed from them.
Independent contractor reforms
The proposed legislation leaves independent contractor law, one of the root causes of wage theft, entirely unaddressed.
Wage theft is inextricably linked to independent contractor rules because of worker misclassification. Confusion about the state’s independent contractor law contributes and exacerbates to ongoing wage theft problems.
The state’s Supreme Judicial Court in 2018 urged the Legislature to clarify the state’s independent contractor law. Since then, the SJC heard multiple cases and a statewide ballot question was proposed to add clarity, but the law remains muddled.
Public enforcement action
This legislative draft includes a sweeping expansion that adds a private right of action to wage theft that outsources and usurps and undermines the Attorney General’s enforcement authority. The Chamber opposes it for the following reasons:
Existing law rightly prevents an employer from discharging an employee who brings a wage theft claim. However, the proposed language expands retaliation to include any adverse action taken against an employee involved in a wage theft claim. The bill goes even further by including a presumption of retaliation for any action within 90 days.
The retaliation provisions mark a significant expansion in state policy that also implements a high burden of proof for employers. Existing law appropriately prohibits and penalizes any employer who retaliates by discharging or discriminating against an employee. The expansion included in the proposed legislative language adds subjectivity by using a blanket term of “adverse action” which could include an array of independent employment decisions.
Stop work orders
Instituting a stop work order for an entire site for a single instance of wage theft is a blunt instrument, particularly given the vicarious liability provisions. A more reasonable approach would be to base the stop work order on a demonstrable pattern of conduct that involves a specific number of incidents during a set timeframe. This would target the bad actors and avoid penalizing employers who want to correct the problem.
As with the public enforcement provision, this provision seems to anticipate potential problems with implementation. The proposed legislation requires that the Attorney General give an employer the opportunity to meet prior to the work order taking effect, likely to avoid unintended consequences. Rather than casting a wide net that will sweep up unintended targets, the better approach would be to base the stop work order on a pattern of conduct.
Furthermore, the stop work order becomes effective within 48 hours but there is a 10-day window in which a contractor can appeal. At a minimum, the stop work order should not take effect until the window for an appeal closes.
Attorney General powers
This bill expands the Attorney General’s authority and power from enforcement to bringing a suit on behalf of employees and suing for treble damages. The Chamber believes that a better approach is to strengthen the Attorney General’s existing enforcement efforts by providing budgetary resources to support that work. Expanding the Attorney General’s authority is not the right approach when funding could support additional enforcement of the laws already in place.