Theft is the crime of unlawfully taking something that doesn’t belong to you without the knowledge or permission of the owner. Muggers, pickpockets, and burglars may come to mind when you think of theft, but a bigger racket is taking money out of the paychecks and pockets of American workers in Michigan and throughout the country – wage theft.
In an aggressive effort to combat this ongoing and systemic lawbreaking, Michigan lawmakers introduced sweeping legislation in August to crack down on wage theft by increasing enforcement and creating new penalties for employers who fail to pay their workers what they’ve earned.
Wage Theft Costs Workers Millions of Dollar Every Year
Employers can and often do take illegal or improper steps to skirt their obligations and pay their employees less than required under the law. They can do this in several ways, whether taking unlawful paycheck deductions, misclassifying workers as independent contractors instead of employees, or failing to pay the correct amount of overtime wages.
The Huffington Post published an in-depth report on wage theft earlier this year that revealed the depth and scope of the problem, including these shocking statistics:
- Seventeen percent of low-income workers were earning less than the minimum wage due to skimming by their employers, according to a 2017 study by the Economic Policy Institute.
- A 2009 survey in New York, Los Angeles, and Chicago found that three-quarters of low-wage workers didn’t receive overtime pay to which they were entitled.
- Though the vast majority of wage theft goes unreported, workers in 2012 recovered $933 million in wage theft court settlements, more than three times the cost of all robberies in the U.S.
Pending Bills Expand Employee Protections and Impose Harsher Penalties for Wage Theft
The bills now working their way through Michigan’s legislature would amend existing state laws involving wage theft, including the Payment of Wages and Fringe Benefits Act (PWFBA), the Whistleblower Protection Act (WPA), the Michigan Antitrust Reform Act (MARA), and the Improved Workforce Opportunity Wage Act (IWOWA).
The package of legislation would also create a new felony offense under the Michigan Code of Criminal Procedure for employers who commit a second or subsequent violation of certain sections of the PWFBA and fail to pay wages or fringe benefits with “intent to defraud.” Upon conviction, an employer could face up to two years behind bars and a penalty of up to $10,000.
Additionally, the proposed laws:
- Expand protections for whistleblowers who report wage theft and expand the kinds of whistleblowing activities that are covered under the WPA.
- Prohibit the misclassification of employees as independent contractors and impose harsh penalties on employers and expanded remedies for employees in such cases.
- Permit an employee who files a complaint against his or her employer under either the PWFBA or IWOWA to maintain the confidentiality of his or her identity.
Don’t Let Your Employer Cheat You Out of Wages. Contact the Overtime Pay Attorneys for a Free Consultation.
The road from introducing a bill to signing it into law is a long one, and it remains to be seen whether any or all of these proposed changes reach the governor’s desk. We will continue monitoring and updating the progress of this legislation, and support any efforts that will stop wage theft and ensure that workers receive all the pay to which they are entitled.
If you believe that your employer is taking money from your paycheck improperly, meeting with an experienced wage and overtime pay attorney is the best way to understand your options and ensure that you receive every penny you’ve earned.