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Philadelphia Comes Down Hard on Wage Theft

The City of Philadelphia is taking a hard line on wage theft with some stiff penalties for employers caught stiffing their workers. It is such a tough law that some have criticized it as “draconian.” But others have applauded the city’s aggressive stance.

Any week that wages are found to be unpaid is a separate violation by an employer under this strict ordinance, which also says businesses will be hit with penalties of up to $2,300 for each violation if there is not a “good faith contest of the wages owed exists.”

That means employers could be subject to multiple $2,300 fines for a single employee’s complaint for unpaid wages if the complaint spans multiple weeks.

The city will also be able to deny, revoke or suspend any license or permits issued to a business owner who has admitted liability or been found liable for violating the Ordinance or any other state or federal wage and hour law in the three years prior to the date that the employer applied for a license or permit.

According to Lexology, the process will be pretty straightforward:

The initial burden is on the complainant to present “sufficient evidence” to show what wages are due, and the employer may negate reasonable inferences of the evidence by producing records of time worked and payments made. Significantly, the process does not provide for any form of hearing or sworn testimony.

Within 60 days of receiving the employer’s response, or within 110 days of the complaint being filed, whichever is earlier, the Coordinator will issue written findings of fact and conclusions of law. Upon a finding that payment is due, the Coordinator may order payment and issue penalties to the employer to be paid to the complainant. Further, the Ordinance establishes that joint and several liability may attach, although the total amount awarded shall not exceed the amount owed to the complainant. A final decision by the Coordinator may be appealed in court within 30 days.

Attorney Andy Cohn, writing for a website called Pennsylvania Construction Lawyer, says this new law appears to have some real teeth:

The Philadelphia Wage Theft Law poses significant additional risk and potential liability to Philadelphia employers who do not pay their employees as they are required to do either by law, or by contract. Apart from the unpaid wage liability, it exposes employers to additional attorney's fees and penalties, a streamlined process for the defense of claims, and the possibility of a suspension or revocation of their right to conduct business in Philadelphia for at least one year.

For employees, the ordinance offers those who have been denied payment for work performed in Philadelphia a much easier and quicker option to commence an official action to recover allegedly unpaid wages, without having to file a lawsuit.

Click here to see all of Construction Citizen's coverage of the wage theft issue.