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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted:	March 18, 2019 02:33 PM
From:	Senator Vincent J. Hughes
To:	All Senate members
Subject:	Wage Theft Education and Accountability

In the near future I plan on introducing legislation that educates employees about and brings accountability to employers regarding wage theft. The first piece requires the posting of information at all work places regarding wage theft and the second piece prohibits violators of Pennsylvania’s Wage Payment and Collection Law from participating in commonwealth procurement. Wage theft is the practice of underpaying or failing to pay workers money that they are legally owed. Wage theft comes in many forms; some employers misclassify their workers, denying them pay protections and access to benefits; some pay below the minimum or promised wage; some make illegal deductions or steal tips from tipped employees; while others simply fail to pay for all hours worked or, in extreme cases, do not pay at all. According to Philadelphia’s Community and Legal Services, wage theft resulted in the loss of $258 million to employees in Pennsylvania in 2013. A Temple Sheller Center for Social Justice study reported that 15% of weekly pay is stolen, on average, from a low-wage worker who experienced a pay-based violation and estimated that Pennsylvania low-wage workers lose $19 million to $32 million in any given week from wage theft (conservative estimate that assumes wage theft for 1/5 of low-wage workers at 15%). When annualized, this amounts to losses of $988 million to $1.6 billion a year for these low-wage workers. Additionally, a 2017 report by the Economic Policy Institute on minimum wage violations in the 10 most populous states found the severity of underpayment to be the worst in Texas and Pennsylvania. Using employee wage losses from the reports above, the Commonwealth loses between $8 million to $50 million annually in lost income tax revenue from wage theft. Recently, Fox Bindery Inc., located in the Southeast, entered into an agreement with the U.S. Department of Labor to pay almost $600,000 in back wages and damages for failing to pay hundreds of workers at their plant. I hope you will join me in sponsoring these proposals. If you have any questions, please do not hesitate to contact Michael Deery or Zach Ross in my office.

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Document #1

Description:

The first piece of legislation would require a conspicuous posting of a summary of the Wage Payment and Collection Law, including what wage theft is and what the remedies for violation are.  This posting is similar to what is required for the minimum wage.  If an employer fails to post the summary, the statute of limitations for a claim of wage theft will not begin to run until the notice is posted and the employer shall be guilty of a summary offense punishable by a fine not to exceed $500.

Document #2

Description:	The second piece of legislation, modeled after bipartisan legislation passed last year in Washington, will amend Title 62 (Procurement) to allow a person to be disbarred or suspended from the consideration of an award of a procurement contract if they have a violation of the Wage Payment and Collection Law.