Massachusetts Attorney General Maura Healey
June 9, 2021
Wage theft labyrinth complicates prosecutions, solutions
By State House News Service
Beacon Hill lawmakers and other officials have for years lambasted unscrupulous employers that do not pay workers what they are owed, but enhanced wage theft prevention and enforcement legislation has repeatedly stalled out as liability provisions keep some employer groups from getting on board.
The Joint Committee on Labor and Workforce Development heard testimony Tuesday on six bills dealing with wage theft, including companion bills (H 1959/S 1179) that would ratchet up enforcement against wage theft by providing the attorney general's office with the ability to file directly in court to pursue wage and hour violations on behalf of workers and to collect damages and attorney's fees when those workers prevail in court, and more.
Supporters said Massachusetts workers miss out on almost $1 billion in pay a year because of wage theft. In fiscal year 2020, the attorney general's office ordered $6.7 million in restitution impacting nearly 12,000 workers across Massachusetts and mandated that violators pay $5.7 million in penalties.
"As the current economy increasingly relies on subcontracting, good employers are being left at a competitive disadvantage as unscrupulous employers undercut bids or alter the market with the assumption that they're going to get away with wage theft, leaving their workers without fair compensation," Rep. Dan Donahue, who filed the House version, said. "Wage theft is becoming business as usual and we need to ensure that law and the law enforcement mechanisms keep pace with this growth. And I think this bill does just that by adding more tools to the toolbox for going after these unscrupulous employers who are stealing from their employees and from this commonwealth."
The legislation has 117 House co-sponsors and 30 Senate co-sponsors, chief Senate supporter Sen. Sal DiDomenico said. Similar legislation has passed the Senate at least twice but has not been embraced in the House in recent sessions. The House this year is operating under a new Speaker, Rep. Ron Mariano of Quincy.
Noel Xavier, an organizer for North Atlantic States Regional Council of Carpenters, explained earlier this year that a shift away from the "employer-employee model" and towards a "subcontractor to subcontractor to subcontractor model" has exacerbated wage theft issues in the construction industry, though lawmakers heard Tuesday from workers who experienced similar issues in the hospitality industry and other sectors.
He said a general contractor will hire a subcontractor to perform a specific scope of work, say all the drywall work a project requires. Drywall subcontractors would then submit bids for that work at specific prices and one would be chosen to perform the work.
"But then this subcontractor doesn't perform the work himself, he subcontracts to another lower tier of subcontractor, which in this case it's not really a subcontractor but a labor broker," he said during a March livestream hosted by Sen. Eric Lesser. He said some labor brokers might "look legit on paper, but all it is is a guy with a cellphone that has connections with many workers and is able to get them to work and pay these workers in cash."
Xavier said many of the workers are undocumented. And while they may be paid some, the wages are often "substandard" and come with no health insurance or other benefits that workers are entitled to.
Attorney General Maura Healey said Tuesday that the multi-tiered nature of many jobs makes it harder for her office to go after subcontractors that cheat their workers out of wages.
"Some of these are fly-by-night operations, so to speak. They're stood up quickly and they move on to the next site and on to the next site. And so we're not able to get relief from that," she said. The attorney general later added, "A lot of these subs are set up and they move quickly and they shut down quickly. And then you chase them, and you can't really get them. And when you do get them, they've got no money."
AFL-CIO President Steve Tolman said existing state laws have "proven to be ineffective to the scale of the problem of wage theft" and that unethical employers have "a very clear roadmap" on how to take advantage of their workers.
"That roadmap says to outsource, to subcontract, oftentimes to employers whose bids come in impossibly low -- and we all know how they come in so low," he said. "But for too many employers, it pays not to ask because with the insulation of the subcontractor between you and the workers who you are profiting from, you're shielded from the liability and you've created confusion among workers about who's actually responsible to pay them," Tolman said. "Now take that situation and add a few more layers of subcontracting and you have a situation that is nearly impossible for workers to navigate."
The Donahue/DiDomenico bill would allow for lead contractors to be held responsible for wage theft violations by subcontractors they hire and work with, a provision that keeps the Associated Subcontractors of Massachusetts from supporting it.
"We believe that companies who commit wage theft have no place in our industry, or frankly in any industry," ASM CEO Michael McDonagh told the committee Tuesday. "We support strong enforcement of the laws in place to punish those employers who are cheating their workers on wages, but we have concerns with the joint and several liability provisions in the proposed bills, which we believe are unduly harsh and simply unfair on law-abiding businesses in the commonwealth and, if enacted, would punish the wrong people."
McDonagh was the only person to offer live testimony in opposition to any wage theft bill during Tuesday's hearing, but other similar organizations have previously expressed concerns about liability measures.
Last session, Associated Industries of Massachusetts told the Labor and Workforce Development Committee that its members could not support vicarious liability -- through which lead contractors are liable for subcontractors' violations -- as part of the solution to wage theft. The Massachusetts Restaurant Association, Association of Builders and Contractors MA Chapter and Associated General Contractors of Massachusetts were recorded in opposition to wage theft bills last session in lobbyist disclosures filed with the secretary of state's office.
During Tuesday's hearing, lawmakers from both chambers of the Legislature said the time for talking about wage theft is over and that it's now time for action.
"We had significant support across the Legislature in the last term, but we just weren't able to get it across the finish line. This needs to be done," Sen. Marc Pacheco said.
Rep. Steven Ultrino said, "Now is the time where we need to stop talking about this and [start] doing something about it."
The attorney general on Tuesday also pitched the committee on a separate bill (S 1177) that she and DiDomenico filed to give her office enhanced enforcement capabilities, like being able to enforce wage violations in Superior Court as the office would with consumer protection or environmental protection actions.
"We need these tools to ensure that workers are compensated for the hours that they've worked so that they can support themselves and their families, to level the playing field for businesses that play by the rules and follow the law, to protect the state from lost revenue in the form of taxes, workers compensation and unemployment insurance contributions, and to prevent an undue burden on taxpayer-funded social safety net programs," Healey said.
WBJ Web Partners
Most Recent
Most Recent
0 Comments