New D.C. Wage Theft Prevention Act Creates New Requirements, Stiffer Penalties

The D.C. Wage Theft Prevention Amendment Act of 2014 (the “Act”) is expected to become effective February 26, 2015, upon the expiration of Congress’ 30-day review window. The Act will amend several of the District of Columbia’s wage and hour laws, including the Minimum Wage Act Revision Act, The Living Wage Act, the Wage Payment and Wage Collection Law, and the Accrued Sick and Safe Leave Act.

Former D.C. Mayor Vincent Gray signed the original version of the Act into law on September 19, 2014. The Act has subsequently been revised twice, through the December 2, 2014 Wage Theft Prevention Correction and Clarification Emergency Amendment Act of 2014 and the February 3, 2015 Wage Theft Prevention Clarification Emergency Amendment Act of 2015. The amendments, which were passed despite the Act having not yet entered into effect, are intended to clarify the Act and to reduce the burden of compliance on employers. Additional revisions are possible.

If all three pieces of legislation enter into law, employers will be subject to the following rules:

Notice Requirement

A major component of the Act is the requirement that employers provide written notice to all employees concerning the terms and conditions of their employment. Items that must be contained in the notice include:

• The employer’s name, including any “doing business as” names used by the employer;
• The physical address of the employer’s main office or place of business, and the employer’s mailing address, if different;
• The employer’s telephone number;
• The employee’s rate of pay and the basis of that rate;
• Any allowances claimed as part of the minimum wage;
• The employee’s overtime rate of pay and/or exemptions from overtime pay;
• The living wage and/or exemptions from the living wage;
• Applicable prevailing wages; and
• The employee’s regular payday.¹

Employers must provide the notice to all employees within 90 days of the Act’s effective date and to new employees upon hiring. An additional notice must be provided to employees whenever any information contained in the notice changes. The D.C. Mayor’s office is responsible for providing a sample notice in English within 60 days of the Act’s effective date. If the D.C. Mayor’s office provides sample notices in languages other than English, employers will also be required to provide notice to employees in those languages, but only if the employer is aware that English is not the employee’s primary language or if the employee requests the notice in a language other than English. The Act provides for a $500 per employee civil fine for failure to comply with the notice requirements.

Record-Keeping Requirement

Employers must maintain signed and dated copies of each employee’s notice for a minimum of three years. Additionally, employers must maintain precise records of all time worked by non-exempt employees. The Act provides a $500 per employee civil fine for failure to comply with the record-keeping requirements.

Posting Requirement

Employers are required to post a summary of the Act and the Minimum Wage Act Revision Act within 60 days of the Act’s effective date. The Mayor’s office is responsible for providing the summary for use by employers. Employers may be fined $100 per day for failing to post a summary of the Act.

Retaliation

The Act creates a cause of action for retaliation, which is presumed if an employer takes an adverse action against an employee within 90 days of the employee engaging in a protected activity. Protected activity includes:

• Making a good faith complaint to the employer, the Mayor, the D.C. Attorney General, any federal or District of Columbia employee, or any other person, for a believed violation of the Act;
• Initiating a proceeding under or related to the Act;
• Providing information to the Mayor, the D.C. Attorney General, any federal or District of Columbia employee, or any other person, regarding a violation, an investigation, or a proceeding under the Act;
• Testifying in an investigation or a proceeding under the Act; or
• Exercising other protected rights under the Act.

The presumption of retaliation can be overcome by clear and convincing evidence.

Additional Procedures and Penalties

Under the Act, employees may seek relief for violations of the District of Columbia’s wage and hour laws through a new administrative procedure. Additionally, employers that violate the laws face increased civil liability and penalties, may be denied a business license, and may be imprisoned for certain willful or negligent violations. The Act also allows for opt-out class actions for private civil actions brought under the Act and lowers the standard for proving that employees are “similarly situated” for class certification purposes.

Joint and Several Liability

Under the Act, employers are jointly and severally liable for violations of the District of Columbia’s wage and hour laws committed by staffing agencies with which employers have contracted. Staffing agencies must indemnify employers with which they work unless the parties agreed otherwise in a contract that predates the Act.

General contractors are jointly and severally liable for violations of these laws committed by their subcontractors. Subcontractors must indemnify contractors with which they work unless the subcontractor’s violations arose out of the contractor’s failure to promptly pay the subcontractor under their contract.

Next Steps for Employers

Employers should be prepared to distribute written notice to all employees by May 27, 2015. Moreover, employers should review their policies and procedures to ensure that they are in compliance with the new requirements under the Act.

It is noteworthy that New York recently eliminated its onerous annual notice requirement. Employers should watch for further amendments to the Act.

¹ Additional notice requirements apply to temporary staffing agencies.