Wirch Again Targets Wage Theft
Bill Toughens Penalties for Employers Who Fail to Pay Workers What They Have Earned

Madison- Senator Bob Wirch (D-Somers) is reintroducing legislation that will take aim at a practice known as wage theft, which experts say is a rising problem that is causing economic strain to workers, taxpayers, and the economy as a whole.

“With so many Wisconsin families living paycheck to paycheck, it is time we address this issue, the theft of hard-earned wages from our hard-working friends and neighbors.  It’s a crime that affects all of us, as workers, as consumers, and as taxpayers, and this legislation is an important step forward,” Wirch said.

Wage theft covers a variety of infractions that occur when workers do not receive their legally or contractually promised wages.  Common forms of wage theft include nonpayment of overtime pay; violations of minimum wage laws; forcing employees to work off the clock; withholding workers’ final paychecks; management keeping tips meant for employees; and payroll fraud/worker misclassification. Wage theft can have severe consequences for workers, local economies, law-abiding businesses, and taxpayers. American workers lose an estimated $30 billion a year nationally due to these violations; local, state, and federal governments miss out on billions more in tax revenue as a result of wage theft; well-meaning businesses struggle to compete with wage cheats; and low-wage workers are taking home less money, which means they have less to spend at local businesses.

Wirch’s legislation would, among other things: require employers to provide written disclosure of pay and other working conditions at the time of hire and annually thereafter; increase penalties for employers found in violation and damages that can be collected by employees as a result; increase the statute of limitations for filing a wage claim; require businesses to disclose any delinquent wage judgments when applying for licensure or registration; and establish a fund, using penalties paid by violators, to cover future wage theft enforcement.

“The changes I am proposing are reasonable solutions that will address some of the legal loopholes that have allowed this practice to grow, level the playing field for the many business owners who play within the rules and take care of their employees, and establish more meaningful penalties for violators and compensation for workers who have been taken advantage of.  I’m hopeful that this proposal will have bipartisan support and we will act on it before the end of the session,” declared Wirch.

A decline in enforcement capacity at the U.S. Department of Labor and state agencies, a sharp decrease in union membership, and a rise in low-wage employment have combined to result in a major increase in wage and hour violations.  According to various studies, approximately 60% of low-wage workers suffer some sort of wage violation each week; the state Department of Workforce Development has anywhere from 800-1000 open wage claims at any one time. With passage of this legislation, Wisconsin would join a long list of states cracking down on wage theft, including New York, California, Texas, Connecticut, Colorado, Delaware, Illinois, Minnesota, Maryland, Massachusetts, New Mexico, Washington, and the District of Columbia. The Republican majority in the State Senate refused to bring the bill up for a vote in each of the last two sessions. Wirch’s bill currently has eighteen co-sponsors.