Council committee takes up wage theft enforcement

The Public Safety, Civil Rights, and Technology Committee today discussed Council Bill 118585, which addresses wage theft and other unfair labor practices.

From the summary of the bill:

The ordinance responds to City Council’s 2015-2016 Statement of Legislative Intent requesting legislation to address wage theft; the Office of City Auditor’s 2014 recommendations to improve implementation of the Paid Sick and Safe Time ordinance; and the Office of Labor Standard’s ideas for improved implementation developed over four years of conducting labor standards outreach/enforcement and gathering stakeholder input.
The ordinance seeks to prevent wage theft among Seattle workers, quickly recover wages owed, allow for investigations that protect identifying information, and facilitate compliance with Seattle’s labor standards by (1) strengthening penalties and enforcement procedures; (2) harmonizing ordinance provisions; (3) adding new definitions and requirements; and (4) creating incentives for employers to resolve investigations quickly to ensure workers receive their owed compensation as soon as administratively possible. The ordinance revises and adds new sections to labor standards regarding paid sick and safe time, use of criminal records in employment decisions, minimum wage, and compensation due by reason of employment. The ordinance also revises the duties for the Human Rights Commission and revises criteria for issuance of City of Seattle Business Licenses.

Much of the public comment session involved people representing local labor and speaking in support of the ordinance, though one representative of small business owners railed about the burden on small businesses to try to comply with existing regulations. Over and over again speakers emphasized that enforcement of labor laws, including wage theft and paid sick leave — a large focus of this proposed ordinance — was key.

The city staff walked the Council members through a presentation with the details of the ordinance. Lots of great information here.

One of the important features of the new ordinance is to allow workers to pursue a private right of action against employers for a broader set of labor law infringements, rather than waiting for the government to pursue it.

The civil penalties for employers are significantly raised:

  • First incident:  discretionary up to $500 per aggrieved party;
  • Second incident: mandatory up to $1000 per aggrieved party;
  • Third incident: mandatory up to $5000 per aggrieved party.

The “discretionary” aspect is important for the first offense, so that if employers make honest mistakes that can be resolved without being overly punitive.  The penalties are paid to the aggrieved party, not to the city.

Plus there are penalties for retaliatory actions by employers against employees who report violations.

There are strong incentives for employers to pay workers quickly after findings of violations (i.e. the penalties listed above can be waived or reduced).  Council member Gonzalez noted from her past experience defending wage theft claims that employers often pay restitution by check but then the check bounces, so the “timely payment” will need to be defined thoughtfully.

The Seattle Chamber of Commerce is apparently supportive of this legislation (and the hard work to get it to this point with input from stakeholders). The Chamber has been actively involved through the whole process of crafting this ordinance.

The council members asked several detailed questions and poked holes in various places. Council member Bagwell pointed out that the rules are very complex, and asked how it would be explained to employers and employees. The staff replied that they would be developing a set of educational materials to accompany its rollout.

Committee chair Harrell asked that the staff address the issues (mostly minor and technical) and prepare a final version for next Thursday’s committee meeting.