Chairperson Silverman and members of the COW Subcommittee on Workforce, thank you for the opportunity to speak today. My name is Ilana Boivie, and I am the Senior Policy Analyst at the DC Fiscal Policy Institute. DCFPI is a non-profit organization that promotes budget and policy choices to expand economic opportunity and reduce income inequality for District of Columbia residents, through independent research and policy recommendations.
Wage theft is a significant problem in the District of Columbia, and our wage theft law should be strengthened. To that end, I am here today to testify in support of B21-120, the Wage Theft Prevention Clarification and Overtime Fairness Amendment Act of 2015, and against certain provisions of B21-711, the Wage Theft Prevention Revision Amendment Act of 2016.
Wage Theft Is a Major Problem in the District
The Council should be commended for passing several laws in recent years to improve workers’ rights, such as Accrued Sick and Safe Leave, increases to the minimum wage, and the original wage theft law. These new workplace rights and benefits are only beneficial to workers if their employers comply. Strong wage theft legislation and enforcement is crucial to ensuring that workers fully receive what they are entitled to under the law.
The challenge in the District is great, and growing. In 2015, the Department of Employment Services (DOES) received a total of 699 wage theft complaints, with a total of over $21 million in compensation at stake.[1]
In addition, as stronger labor laws continue to be enacted in the District, the potential for even more wage theft claims rises. For example, DOES reported in its FY 2016 Performance Oversight responses that after the enactment of the Wage Theft Prevention Act, the Office of Wage-Hour experienced a 27 percent increase in minimum wage cases, and an astounding 182 percent increase in living wage cases. Overall, the department projected a 23 percent increase in claims for FY 2016 over the previous year.[2]
Last spring, the Council voted to raise the minimum wage again, rising to $15 per hour by 2020, and an increase to $5 per hour for tipped workers. As a result, some 114,000 DC workers will see a wage increase by 2020; this represents roughly 14 percent of the city’s workforce.[3] While this will be tremendously beneficial to District residents at the bottom of the wage scale, they can only enjoy this benefit if the new minimum wage law is properly enforced. Therefore, now is the time to ensure that our wage theft law is as strong as possible.
Bill B21-120 Will Strengthen Our Wage Theft Law
Most of the provisions of the Overtime Fairness and Wage Theft Prevention Clarification Act are technical corrections to the original wage theft law, which have already been passed on an emergency basis. This bill would simply make those provisions permanent, and also add some additional clarifying amendments. For example, the legislation clarifies that the same procedures and remedies are available for violations of the minimum wage law as for unpaid wages, and also clarifies when smaller awards may be given because the employer shows a “good faith” mistake. The bill also ends the overtime exemption for parking lot attendants, which will avail these workers of the same local processes and remedies that all other workers have, to receive what they are rightfully owed.
Overall, the legislation will serve to make our wage theft law clearer, and therefore stronger.
Several Provisions of B21-711 Would Weaken Our Wage Theft Law
The Wage Theft Prevention Revision Amendment Act would also make the temporary laws permanent, but the bill contains several additional provisions, some of which we welcome, and others that we find somewhat problematic.
For example, the bill calls for administrative hearings to be conducted by the Office of Administrative Hearings (OAH), rather than at DOES. This make sense and will clear up ambiguities in the law, so that hopefully these hearings will be set up and available to workers.
On the other hand, we are concerned about a provision that would reduce fees owed to attorneys representing successful wage theft victims, by eliminating the current “Salazar” rates. Lowering the rate would disincentivize private attorneys from taking up wage theft cases. Private attorneys are an important source of wage theft representation because the capacity of nonprofit and pro-bono legal assistance does not meet the full need.
Also, we oppose a provision of the bill that would repeal the Mayor’s authority to revoke business licenses of willful violators of wage theft laws, and to suspend the licenses of businesses that don’t follow settlement agreements. We believe that this capability provides the Mayor’s office with strong leverage to ensure that businesses comply with the law, and should be maintained.
Proactive Enforcement Is Needed As Well
I also would like to reiterate that strong education and enforcement of workers’ rights laws is just as important—if not more so—as strong legislation. To that end, while educational initiatives such as last year’s Zip Code Project have ended, additional proactive public outreach measures can be taken, including bus, metro, and media ads; regular community forums; and worker-friendly fact sheets. We are encouraged by statements from DOES officials this year that further education and outreach is priority.[4] In addition, DCFPI would like to see DOES begin to shift its focus to more proactive enforcement of worker protections, such as collection of fines and liquidated damages.
Thank you again for the opportunity to testify. I am happy to answer any questions.
[1] DOES FY 2015-2016 Performance Oversight Hearing Questions. http://dccouncil.us/files/user_uploads/budget_responses/DOESFY1516PRQAFinal3.pdf
[2] DOES FY 2015-2016 Performance Oversight Hearing Questions. http://dccouncil.us/files/user_uploads/budget_responses/DOESFY1516PRQAFinal3.pdf
[3] David Cooper. 2016. “Raising the DC Minimum Wage to $15 by 2020 would Lift Wages for 114,000 Working People.” Economic Policy Institute.
[4] Budget Briefing to the Fair Budget Coalition. April 6, 2016.