NY to prevent violators of wage theft law from doing business in state – ProPublica

NY to prevent violators of wage theft law from doing business in state – ProPublica

This article was produced in partnership with Documented for ProPublica’s Local Reporting Network. Sign up for Dispatches to get stories like this as they’re published.

New York lawmakers last week proposed three new bills that would make it harder for wage theft violators to do business in the state.

The legislation would strengthen the authority of state agencies to crack down on wage theft by confiscating liquor or business license violations, as well as issuing cease-and-desist orders against them.

The legislation was prompted by reports of massive wage theft against New York workers, including two investigations published by Documented and ProPublica. The stories revealed that more than 127,000 New Yorkers were victims of wage theft over the past five years, but the New York State Department of Labor failed to recover $79 million owed to workers.

The stories were based on an analysis of two databases of wage theft violations from the US and New York Departments of Labor. The databases provided previously unreported details about how much money was stolen from workers and also shed light on which businesses were committing wage theft.

“We knew from our conversations with labor and the workload of our constituent services that wage theft was a chronic problem,” said Sen. Jessica Ramos, a Democrat who sponsored the legislation. “Until the ProPublica and Documented series came out last year, we didn’t have the data to understand the extent of the issue in New York State. Having this report as a tool prepared us to put this package together and focused our attention on the capabilities of the Department of Labor.

The legislation, dubbed the “wage theft prevention package” by lawmakers, includes three bills co-sponsored in the State Assembly by Assemblymen Kenny Burgos, Harvey Epstein and Linda Rosenthal.

First, S8451 would give the New York State Liquor Authority the authority to suspend liquor licenses for bars and restaurants that the Department of Labor determines owe their employees more than $1,000 in back wages. According to an analysis by Documented and ProPublica, more than $52 million was stolen from people working in restaurants in New York, more than any other industry. Back wages accounted for more than 25% of all wage theft reported in the state. Similar measures have been successful in other parts of the country, including Santa Clara County in California, which has generated $110,000 for workers since 2019.

The second bill, S8452, would allow the Department of Labor to issue a work stoppage order for any job with an alleged wage theft of at least $1,000. This approach has proven successful in other states, such as New Jersey, which temporarily closed 27 Boston Market restaurants, resulting in 314 workers recovering more than $630,000 in wages. Boston Market did not respond to a request for comment.

A third bill, S8453, would allow the New York State Department of Taxation and Finance to suspend a business’s certificate of authority in cases where the wage theft exceeds $1,000 — allowing it to collect sales tax and operate a business.

The three bills include a provision that would allow employers to avoid penalties if they resolve wage theft claims within 15 days.

Ramos’ office told Documented and ProPublica that it was too early to gauge the level of support among other lawmakers for the bills introduced Wednesday. But Ramos and Rosenthal, a Democrat who represents the Clinton neighborhood in Manhattan, wield significant influence in the Legislature because they chair powerful committees, the Labor and Housing Committees, respectively. The bills have the support of the state Department of Labor, according to Ramos’ office.

“Each year, more than $1 billion is stolen from the pockets of hard-working New Yorkers by unscrupulous employers, often targeting workers with the least resources to fight back,” Rosenthal said. “If businesses refuse to do the right thing and pay their employees, New York State should hold them accountable.”

The bills have been praised by labor advocates and urban studies academics, including James Parrott, director of economic and fiscal policy at the New York School’s Center for Urban Affairs. “These bills are needed to put more teeth into New York’s enforcement efforts,” Parrott said. “We owe it to hard-working low-wage workers and law-abiding employers.”

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