As we noted in our blog post last month, District of Columbia Mayor Vincent Gray recently signed an amendment to the Wage Theft Prevention Act. As detailed in our post and related client alert, the D.C. Wage Theft Prevention Amendment Act of 2014 (the “Act”) significantly expands D.C. employers’ obligations to employees, including comprehensive new pay notice requirements for all existing employees and new hires going forward. The Act also increases penalties and damages for violating various D.C. wage-hour and leave laws, places higher evidentiary burdens on employers seeking to defend against such claims, and creates an expedited administrative enforcement process that employees can trigger in lieu of a civil action.
Since our post and client alert, there have been a number of developments regarding the Act. Before the Act can become law it must be transmitted to Congress for a period of review. The Act was sent to Congress on November 21, 2014. It is expected to become law on January 14, 2015, barring Congressional action, which we do not anticipate.
In addition, on December 2, 2014, the D.C. Council passed an Emergency Amendment to the Act, addressing a number of issues first raised by the Mayor when he signed the Act. Many of the changes are technical, but a few are substantive. The key changes are:
Joint and Several Liability. As noted in our prior post, the Act imposes joint and several liability on general contractors for violations of certain laws by their subcontractors, including failure to properly pay wages. It also imposes joint and several liability on employers for any violations by temporary staffing agencies they may use. The Emergency Amendments continue to impose joint and several liability, but add a very limited exception where the contract between the general contractor and subcontractor, or between the employer and temporary staffing agency explicitly provides otherwise and the contract was in effect prior to the effective date of the Act (expected to be January 14, 2015). The change was sparked by the Mayor’s concerns that the Act as written could interfere with existing contracts.
Limits on Liability. The Act contains a number of provisions enhancing penalties for employers that violate various employment laws. The Emergency Amendments revise provisions that were written to provide for unlimited penalties so that they now have maximum caps for monetary penalties.
Clarification on Who Can Bring Claims. The Act provided that “any entity a member of which is aggrieved by a violation of [wage and leave laws] may bring a civil action” for such violations. The Mayor found the language to be vague and could be read to permit social and political clubs to bring claims on behalf of their members. The Emergency Amendments remove the clause from the Act and make clear that only employees (and not, for example, unions) can vindicate their rights under the Act.
Additional Rules and Guidance. The emergency amendments to the Act now expressly allow the Mayor to issue rules to implement the provisions of the Act. Given the ambiguity of some of the provisions of the Act, additional guidance from the Mayor’s office will certainly be helpful to employers.
On December 9, 2014 at 12pm, Proskauer is hosting a free webinar where Josh Alloy and Guy Brenner will discuss the Act in more detail. Employers looking to enhance their understanding of the Act’s requirements may register by following the directions below:
- Go to: https://university.learnlive.com/proskaueronlineevents.
- If you are a first time user, create a new account by clicking the “New User Registration” button and completing the New User Registration fields. The Company Pass Code is 9736529. If you are a returning user, login with your existing account information.
- Click the “Submit” button.
- This will bring you to the Catalog page.
- Click the “View” button for the session titled: D.C. Amends Wage Theft Prevention Act to Increase Employer Obligations and Penalties and the click “Enroll.”