Amended Wage Theft Prevention Act

Executive Summary

Overview:  The District of Columbia Department of Employment Services has announced the Wage Theft Prevention Amendment Act will become effective on February 26, 2015.

Effective Dates: February 26, 2015.

Coverage:   All clients with employees working in D.C.

Action Required:  Modify timekeeping and pay practices as needed and distribute and post required notices when the notices become available.

The Details

The Act makes sweeping changes to D.C.’s wage and hour laws, greatly increasing employer obligations, penalties, and liability and creating a cumbersome administrative hearing process. Most significant for many employers are the enhanced precise timekeeping and wage statement requirements for all employees — including exempt employees.

Written Notice Requirements for Current Employees and New Hires

Once the law goes into effect, employers are required to give employees written notice of their wages. This notice must include the following, both in English and in the employee’s primary language:

• The employer’s name, address, and telephone number;
• The employee’s regular payday, rate of pay and basis of that rate; and
• Any other information “as the Mayor considers material and necessary.”

The Mayor will provide employers with a template of this notice within 60 days of the 2014 Act’s effective date.   We will notify clients when the notice is issued.

Employers are required to issue a written notice with the above information to each employee within 90 days of the Act’s effective date. Thereafter, employers must provide the notice to all employees at the time of hire or any time the employer’s or employee’s information changes.

Temporary staffing firms have different notice requirements from other employers under the Act. Like other employers, these firms must provide written notice. However, the required content of the notice is tailored to the temporary staffing industry and includes such information as the specific rate of pay for an employee’s assignment and the location and name of the staffing agency’s client to which the employee is assigned.

Recordkeeping and Posting Requirements

In addition to the recordkeeping requirements under D.C.’s Minimum Wage Act, employers must now keep a record of the “precise time” an employee works each day. Prior to this new requirement, employers need only to record the total hours an employee worked each day (e.g., 8 hours). The 2014 Wage Theft Act requires employers to ensure that employees’ actual working time is tracked more accurately, to the minute (e.g., 9:03 a.m.-12:05 p.m. and12:35 p.m.-5:00 p.m.).

The 2014 Wage Theft Act also amends recordkeeping requirements for the D.C. Accrued Sick and Safety Leave Act of 2008. Employers must keep not only records of an employee’s hours worked, but also the amount of paid leave taken by each employee. These records must be maintained for at least three years and the requirements apply to both exempt and non-exempt employees.

The 2014 Act maintains the requirement that employers post a copy or summary of the Act. However, employers no longer need to request a copy from the Mayor’s office. Instead, within 60 days of the Act’s effective date, the Mayor’s office will provide employers with a copy or summary of the Act to post on the employer’s premises.

The Act not only modifies employers’ recordkeeping obligations, it changes the consequences for employers who fail to comply with the new requirements. Failure to comply with the notice, recordkeeping, or posting requirements of the Act could result in the tolling of the three-year statute of limitations (i.e., it does not begin to run) typically applicable to wage claims until the employer complies with the requirements.

New Retaliation Provision

The 2014 Wage Theft Act provides a cause of action for retaliation. The Act allows aggrieved employees to pursue a retaliation claim either in a civil action or within the administrative proceeding process described below.

If an employer takes adverse action against an employee within 90 days of the employee engaging in an activity protected by the Act, there is a rebuttable presumption that the employer retaliated against the employee due to the employee’s protected activity.

Expansion to Include Exempt Employees

The 2014 Wage Theft Act broadens the definition of “employee” by eliminating the exception for exempt employees. As a result, exempt employees now enjoy the protections of the D.C. Wage Payment Law, including being paid twice each month. Employers must keep records of employees’ time worked.

Changes to Administrative Process, Increased Penalties

New Administrative Procedure

The 2014 Wage Theft Act, like similar laws in California and New York, creates an administrative procedure for employees to pursue relief for any alleged violations of D.C. wage-and-hour laws. Although the Act allows parties to resolve claims through conciliation, the new procedure creates a formal hearing process for claims that do not settle through conciliation. Administrative law judges preside over these formal hearings and have the authority to issue subpoenas and compel evidence and discovery from parties. The administrative law judge’s ruling is considered final and is not subject to appeal on the merits to a higher court.

New Civil and Criminal Penalties

In addition to procedural changes, the Act significantly increases civil and criminal penalties in the event an employer is found liable. If an employer is found guilty or has admitted to liability for willful violations under the Act in any judicial or administrative proceeding, the employer may lose its D.C.-issued business license.

Joint and Several Liability for General Contractors, Temporary Staffing Firms

A separate clarifying amendment signed by the Mayor clarifies the scope of joint liability as follows:

When the employer is a subcontractor found to have failed to pay an employee any wages earned, the subcontractor and the general contractor shall be jointly and severally liable to the subcontractor’s employees for violations of the act, except as otherwise provided in a contract between the contractor and subcontractor in effect on the effective date of the Wage Theft Prevention Amendment Act of 2014, enacted on September 19, 2014.  

In addition, when a temporary staffing firm employs an employee who performs work on behalf of or to the benefit of another employer pursuant to a temporary staffing arrangement or contract for services, both the temporary staffing firm and the employer shall be jointly and severally liable for violations of the act to the employee and to the District, except as otherwise provided in a contract between the temporary staffing firm and the employer in effect on the effective date of the Wage Theft Prevention Amendment Act of 2014, enacted on September 19, 2014.

Effective Date

The effective date is still subject to change. We will continue to monitor the Act’s status and report any further information.

As always, please contact your HR Business Partner if you have any questions.