Wage Theft Prevention Act Creates New Wage Notice and Payroll Record Requirements for District Employers

The Wage Theft Prevention Act, as amended, which became effective on February 26, 2015, creates new obligations for employers in the District of Columbia (“the District”). The Wage Theft Prevention Act also sets new administrative procedures for handling violations of the District’s wage-and-hour laws and strengthens penalties for violations. The purpose of this alert is to provide an overview of new obligations under the law and to set forth the possible penalties that may be faced for violating this and other District of Columbia employment laws.

Wage and Hour Notices

As of February 26, 2015, each newly hired employee must be provided with wage-and-hour notice(s) containing certain specified information. The notices must contain the following information:

  • Name of employer with any DBAs;
  • Physical address and mailing address (if different) of employer’s main office or principal place of business; • Telephone number of employer;
  • Employee’s rate of pay and the basis for that rate (by hour, shift, day, week, salary, piece, commission, etc.);
  • Any allowance claimed as part of the minimum wage (e.g., tip, meal, lodging);
  • Overtime rate of pay and any exemptions therefrom;
  • Living wage and any exemptions therefrom;
  • Applicable prevailing wages;
  • Employer’s regular payday as designated by the employer; and
  • “Information as the Mayor considers material and necessary.”

When fashioning the notices, the vast majority of employers are encouraged to use the “Notice of Hire to Employees Template,” which the Department of Employment Services (“DOES”) publishes on its public website.

Each employee must be provided the notice in English. In addition, the employee must be provided with a notice in his or her primary language, but only if DOES has provided a template in that language. Thus far, DOES has provided the template in English only, but has indicated that a Spanish-language template will also be provided. DOES has not indicated that it will provide templates in additional languages, but New York and California – states that have similar wage notice laws – provide templates in several other languages including Chinese, Haitian, Creole, Korean, Polish, Russian and Spanish. Employers with linguistically diverse workforces must pay careful attention when and if DOES publishes templates in additional foreign languages.

Temporary staffing firms must provide their employees with notices containing additional information. DOES currently provides an English-language template specifically for temporary staffing agencies, which is also publically available on its website, and has indicated that a corresponding Spanish-language template will be provided.

In addition, employers must provide persons hired before February 26, 2015, with the required notices before May 27, 2015. Also, every employee must receive the required notices again whenever any of the information required on the notice changes.

As proof of compliance, the employer must retain copies of the written notices given to the employee that are signed and dated by both the employer and the employee acknowledging receipt.

New Payroll Records Requirements

Employers were previously required to keep records of the “hours worked each day and each workweek” for both exempt and nonexempt employees. The requirement remains the same for exempt employees, however, the record-keeping requirements have become more strict for nonexempt employees. Specifically, “for each employee compensated on an hourly basis, or based on any other unit of time, the record shall include the precise time worked.”

In other words, make sure to keep minute-to-minute time records for your hourly employees. For example, if an hourly employee worked from 8:36 a.m. to 5:06 p.m., your records must say so. It is no longer adequate for your records to reflect that he or she worked for 9 ½ hours.

New Requirements Relating to Exempt Employees

Exempt employees must be paid at least once a month. Likely, this is already being done. Be aware, however, that laws concerning the timely payment of wages and the payment of wages upon termination or suspension, which previously applied only to nonexempt employees, now apply to exempt employees as well.

Failure to Comply

Not only does the Wage Theft Prevention Act set forth penalties for failure to comply with its provisions, it also increases penalties for failure to comply with existing wage-and-hour laws. Failure to comply with the Wage Theft Prevention Act or with the Living Wage Act could result in criminal penalties. A first offense will result in a fine of up to $2,500 for any employer who negligently fails to comply, or a fine of up to $5,000 and up to 30 days in prison for any employer who willfully fails to comply. A subsequent offense will result in a fine of up to $5,000 and up to 30 days in prison for any employer who negligently fails to comply, or a fine of up to $10,000 and up to 90 days in prison for any employer who willfully fails to comply

Failure to comply with the Minimum Wage Act could result in severe criminal penalties. A first offense, whether negligent or willful, will result in a fine of up to $10,000. An employer with a prior conviction for noncompliance with the Minimum Wage Act and who is subsequently convicted of a willful offense may be subject to imprisonment of up to six (6) months in addition to, or in lieu of, a fine.

In addition to these criminal penalties, the Mayor will assess administrative penalties against employers who fail to comply with the Wage Theft Prevention Act, the Living Wage Act or the Minimum Wage Act. A first offense will result in a fine of $50 per employee for each day the violation occurred or continued. A subsequent offense will result in a fine of $100 per employee for each day the violation occurred or continued.

Finally, the failure to comply with the Accrued Sick and Safe Leave Act of 2008 will result in a civil penalty for each affected employee of $1,000 for the first offense, $1,500 for the second offense, and $2,000 for any subsequent offense. In addition, the Mayor may require any employer in violation to provide remedies including, but not limited to, compensatory and punitive damages.

Additional Assistance

For more information regarding the District of Columbia Wage Theft Prevention Act, please contact Ian K. Portnoy at (202) 617-2713 or iportnoy@phillipslytle.com, or any of the attorneys on our Labor & Employment Practice Team.