Wage theft bill draws criticism from business community

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A proposal to increase the fines for Maine employers who cheat workers out of their pay drew sharp criticism from the businesses community this week.

Rep. Jared Golden, the Lewiston Democrat pushing the measure, said that shortchanging workers of the pay they earn robs them of both “the respect they deserve” and the cash that they need.

He said “employers that game the system” to avoid mandatory overtime payments or fail to hand over paychecks for all of the hours employees work should be subject to fines large enough to sway their behavior.

Peter Gore, vice president of government relations for the Maine Chamber of Commerce, said that employers see Golden’s bill “as a slap in the face” because it doesn’t distinguish between deliberate cheating and honest accounting mistakes or other errors.

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“Wage theft is wrong. Employers believe that, too,” Gore told the Committee on Labor, Commerce, Research and Economic Development this week.

The message the bill sends, Gore said, is that “we’re going to punish you and we’re going to punish you severely. And it might be for an honest mistake.”

The bill would increase existing fines of between $100 and $500 — in place since 1975 — to $500 for the first violation and $2,500 for each subsequent one. It also allows the imposition of triple damages in some cases, provides workers with a private right to sue and offers protection against retaliation if workers file a complaint.

Matt Schlobohm, executive director of the Maine AFL-CIO, said wage theft is a serious problem, but agreed that most employers do their best. He said the problem is that “low road folks” get an advantage over competitors who play by the rules.

“This goes way too far,” said Greg Dugal, representing the Maine Innkeepers Association and Maine Restaurant Association. It could “put somebody out of business for an honest mistake.”

David Clough, state director for the National Federation of Independent Businesses, said raising the fine levels is reasonable after so many years.

But, he said, the state should make a distinction between “mistakes were made” and “games were played” in determining how large a fine an employer should face. “That’s where  you want to aim your focus,” Clough told lawmakers.

In addition, Clough, said, he’s not sure how big a problem wage theft is in Maine. He suggested taking more time to explore the issue before fashioning remedies to resolve it.

Julie Rabinowitz, the director of policy, operations and communication for Maine’s Department of Labor, said her department is in the process of coming up with a proposal for “a revised and comprehensive penalty structure” that would bring all of the labor-related fines up to date in coordination with each other.

Patricia Pora, with the Hispanic Ministry of the Roman Catholic Church’s Portland Diocese, told legislators she’s seen many examples of wage violations in such fields as construction, agriculture, housekeeping and restaurants.

In one case, she said, two men working on a roof were paid for their first week on the job but when they went for their money after the second, they were told the subcontractor employing them hadn’t yet received its money from the contractor so they’d have to wait. When they returned a week later, Pora said, “they were told that their work was not satisfactory so they would not be receiving their pay,” losing out on $800 apiece.

In another case raised by Pora, “a number of women working for a housekeeping service were paid with checks that bounced.” They wound up facing bank fees and, when they sued, fees to serve notice on the employer that cheated them.

“The process again was so complicated that some of these women gave up trying, losing not only their salary but also their own funds in fees,” Pora said. Some ultimately got partial payments after months of effort, she said.

Beth Stickney, an immigration lawyer in Portland, said she’s seen that “wage theft is a pervasive problem affecting low-income immigrants throughout Maine,” taking the form of unpaid overtime but also failing to hand over the last paycheck to workers who are moving on.

“Immigrants often come from countries where they may have few labor protections, and in my experience are unaware that they have legal protections in the U.S. regarding fair and full payment of wages,” she said.

“Employers take advantage of that ignorance, and in my experience, bet that the employee will not take legal action against them to recover their final paycheck,” Stickney said. She added that even those who ultimately pay up often wind up shelling out less than what’s due.

Golden said that’s why it’s important the law contain hefty enough fines to prove a deterrence.

“Stealing wages is wrong. It hurts hard-working people,” said Golden, the assistant House majority leader.

The measure’s effort to prevent retaliation against workers who file a complaint also raised questions.

Rep. Larry Lockman, R-Amherst, said the language is “very sweeping” and could potentially get an employer in trouble for reporting undocumented immigrants with criminal records. The proposal would bar employers from threatening to expose a worker’s immigration status.

Golden said the issue at hand is offering protection so workers are willing to speak up.

Schlobohm said the retaliation provisions “are a real step forward.”

Amy Sneirson, executive director of the Maine Human Rights Commission, said her agency already offers protection to whistle blowers. Almost one in five claims brought to the commission during the last year concerned alleged retaliatory actions, she said.

The committee hasn’t scheduled a work session on the bill yet, the next step in the legislative process.

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