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SB22-161

Wage Theft Employee Misclassification Enforcement

Concerning the modernization of procedures for the enforcement of laws governing the employer-employee relationship, and, in connection therewith, making an appropriation.
Session:
2022 Regular Session
Subjects:
Labor & Employment
State Government
Bill Summary

The bill updates and modifies laws pertaining to the payment of wages, employee misclassification, and workplace safety, and the enforcement procedures and remedies for violations of those laws, as follows:

  • Changes the penalty penalties for failure to provide requested information to the division of labor standards and statistics in the department of labor and employment (DLSS) or for hindering or obstructing the director of the division or other person authorized by the director in accessing an employer's premises from a misdemeanor criminal offense to a daily penalty of up to not less than $50 ( section 1 sections 1 and 2 of the bill);
  • Directs the DLSS to transmit penalties it imposes to the wage theft enforcement fund ( sections 1 through 5 and 10 );
  • Requires an employer to: Provide notice to an employee, within 10 days after the employment terminates, before deducting from wages or compensation any amount of money or property the employee failed to return or repay upon termination of employment and pay the employee the deducted amount within 14 days after the employee returns or repays the money or property if the employee did so within 14 days after notice is provided and pay 2 times the amount of the deduction if the employer fails to provide the required notice ( section 2 section 6 );
  • Imposes automatic penalties and adjusts the amount of the penalties for multiple violations within 5 years, of the greater of 2 times the amount of the unpaid wages or $1,000 on an employer that fails to pay all past-due wages within 14 days after a written demand or civil or administrative action for the past-due wages is sent to or served on the employer. If an employee shows that the employer's failure or refusal to pay wages was willful, the employer is subject to penalties equal to the greater of 3 times the amount of unpaid wages or $3,000. The bill further states that an employer's second or subsequent failure or refusal to pay wages of the same or similar type within the 5 years preceding a claim is considered per se willful ( section 3 section 7 );
  • If an employer makes a full legal tender all amounts demanded in good faith within 14 days after a written demand is sent or an administrative claim or civil action is sent or served, the employee is required to dismiss the action ( section 7 );
  • Repeals the requirement that an employee dismiss an action against an employer after the employer makes a legal tender for the full amount claimed in the action ( section 3 ), and Eliminates the authority of a court to award an employer reasonable attorney fees and costs in an action in which the employee claimed wages in excess of the greater of $7,500 or the jurisdictional limit for small claims court and the employee does not recover an amount greater than the amount the employer tendered and instead permits a court to award an employer reasonable attorney fees and costs if, within 14 days after a written demand is sent or a civil action is served, the employer makes full legal tender of all amounts demanded in good faith for all employees and the employees ultimately fail to recover a total sum that is greater than the amount tendered ( section 4 section 8 );
  • Allows the DLSS to award an employee reasonable costs incurred in an administrative claim when the employee recovers a sum that is greater than the amount the employer tendered, and, if the employee recovers more than $5,000 in unpaid wages, allows the DLSS to also award the employee attorney fees ( section 8 );
  • For wage claims on or after January 1, 2023, increases the threshold for wage claims the director of the DLSS may adjudicate from $7,500 or less to $15,000 or less ( section 5 );
  • Allows the director of the DLSS to use existing authority under labor laws to gather information pertinent to wage claims from employers, employees, and other persons or entities ( section 5 section 9 );
  • If the DLSS determines that an employer has violated wage laws, allows employees who filed the wage claims to request the DLSS to notify similarly situated employees that the employer may be engaging in a pattern or practice of nonpayment of wages ( section 5 );
  • Allows recovery of attorney fees, an additional fine of 50% of the amount of past-due wages, and a penalty of the greater of 50% of past-due wages or $3,000 from an employer that fails to pay an employee past-due wages within 60 days after the determination in favor of the employee ( section 5 section 9 );
  • For a citation, notice of assessment, or order issued against an employer on or after January 1, 2023, requires the DLSS, upon request of an employee, to file a certified copy of the citation, notice, or order with the appropriate clerk of court, after which the clerk is required to enter the citation, notice, or order as a judgment of the court, and the judgment becomes a lien against the employer's property that is superior to all other liens except property tax liens is sufficient to support the issuance of writs of garnishment if the judgment is wholly or partially unsatisfied ( section 6 section 10 );
  • On or after January 1, 2023, authorizes the DLSS , either on its own initiative or within 60 days after receiving a written request from an employee, to issue a notice of administrative lien and levy, similar to a child support enforcement lien, when an employer fails to pay past-due wages, fines, or penalties, which lien attaches to the employer's real or personal property that is in the possession, custody, or control of another person ( section 6 section 10 );
  • Allows an employee who alleges that the employee's employer discriminated or retaliated against the employee for filing or participating in a wage claim to file a civil action to seek relief, including back pay, reinstatement or front pay, payment of unlawfully withheld wages, interest on past-due wages, penalties, liquidated damages, injunctive relief, and attorney fees and costs. The DLSS, after an investigation of a discrimination or retaliation claim, may also order similar relief to an employee, other than attorney fees and costs ( section 7 section 11 ); and
  • Requires employers to ensure the workplace is constructed, operated, and equipped, and any machinery and equipment in the workplace is placed, operated, and lighted, in a manner that provides reasonable and adequate protections to the lives, health, and safety of all employees, and authorizes a new worker and employee unit in the department of law, in addition to an employee injured or threatened with injury, to enforce the workplace safety requirements ( section 8 );
  • Establishes the worker and employee unit (unit) in the department of law to investigate and enforce wage theft and unemployment insurance and misclassification of employees and workplace safety claims under specified circumstances ( sections 9 through 12 sections 12 through 15 ). and
  • Modifies certain provisions of the mechanics' lien law to streamline its use in the context of workers enforcing wage claims for work performed on real property ( sections 13 through 23 ).

Section 16 appropriates $504,419 to the department of labor and employment for the 2022-23 state fiscal year to implement the bill as follows:

  • $473,369 for use by the DLSS for program costs, including an additional 4.8 FTE; and
  • $31,050 to purchase legal services, which amount is reappropriated to the department of law to provide legal services to the department of labor and employment.

Section 16 also appropriates $95,200 to the department of law for the 2022-23 state fiscal year for use by consumer protection to implement the bill, which amount assumes the department will require an additional 0.8 FTE.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Status

Introduced
Passed
Became Law

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