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House of Representatives
Session of 2023 - 2024 Regular Session

MEMORANDUM

Posted:	March 6, 2023 04:09 PM
From:	Representative Emily Kinkead and Rep. Patty Kim
To:	All House members
Subject:	Addressing the Most Significant Type of Theft in the US – Wage Theft

Wage theft is responsible for roughly three times as much economic loss as all other types of theft combined. For example, in 2012, all of the robberies, larcenies, and motor vehicle thefts in the nation cost their victims just under $14 billion. In that same year, it is estimated that wage theft cost workers more than $50 billion and only $933 million was recovered.   Yet, our Commonwealth has utterly failed to address this issue in any meaningful way that would correct and deter this reprehensible practice engaged in by far too many employers. Wage theft takes many different forms including employers deliberately paying their employees below the minimum wage, stealing workers’ tips, requiring workers to work off the clock, misclassifying workers, denying adequate meal or rest breaks, failing to pay overtime premiums, garnishing employee wages for broken items or customer theft, or engaging in other practices to disadvantage employees and not pay them the wage they deserve.   Currently, our system allows employees to report their employer for these violations, but too often instances of wage theft are not investigated and employers are not penalized. Employees may only receive the back wages owed plus 25% of that total amount or $500, whichever is greater. Employers who violate Pennsylvania’s Wage Payment and Collection Law may be penalized by a fine of no more than $300 or imprisonment of up to 90 days for each offense. An employer’s violation of the Pennsylvania Minimum Wage Act can result in a penalty of a fine between $75 to $300 and imprisonment between 10 and 60 days depending on the offense.   Additionally, wage theft continues to receive little penalties or none whatsoever because employees are often unaware of the occurrence of the theft or the cost of pursuing a wage theft claim far exceeds the amount recoverable. In fact, it has been far more likely that an employee that stole from their employer would be prosecuted than an employer would be held accountable for stealing an equal amount from their employee.   Recently, district attorneys and state attorneys general have been more concerned with tackling this economic sink. Unfortunately, they have found that current laws neither incentivize victims to report instances of wage theft nor deter malicious employers from engaging in wage theft. Accordingly, we propose the below package of legislation. This legislative package would also establish the Wage Enforcement Fund, which will be funded by fines and penalties collected from all wage theft violation cases.

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Document #1

Description:

The first bill is a companion bill to SB 46, which 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 or when the wages were due, whatever is later, 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, a companion bill to SB 47, is modeled after bipartisan legislation passed at the federal level that would 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.

Document #3

Description:	The third piece of legislation would amend the Wage Payment and Collection Law to increase recoverable damages to three times the back wages owed, as well as provide for recovery of attorney’s fees. It would also bring the criminal penalties for wage theft violations in line with the penalties imposed for retail theft.

Document #4

Description:	The final piece of legislation would amend the Minimum Wage Act of 1968 to bring the criminal penalties for wage theft violations in line with the penalties imposed for retail theft.