Neronha seeks to strengthen penalties for wage theft, labor violations

Neronha seeks to strengthen penalties for wage theft, labor violations

PROVIDENCE – Attorney General Peter F. Neronha will testify tonight, Wednesday, Feb. 24, in the Senate Labor Committee in support of SB195, a bill that would increase penalties for both wage theft and the misclassification of employees as independent contractors in Rhode Island, according to a press release.

“There is an underground economy in Rhode Island where people are misclassified as independent contractors when they are really employees. That’s cheating workers and it’s cheating the state’s taxpayers,” said Neronha. “Additionally, when employers cheat workers by failing to pay them the wages they are due, it’s theft, plain and simple. Wage theft not only harms employees, it also deprives Rhode Island of tax revenue, which means taxpayers also pay the price. Both wage theft and misclassification are crimes that warrant felony treatment.”

Misclassification occurs when an employer falsely treats an employee as an independent contractor in order to avoid paying benefits, overtime, taxes, Social Security Insurance, Medicare, and workers’ compensation insurance.

Currently, both wage theft and employee misclassification are misdemeanor offenses. The bill, introduced in the Rhode Island Senate by Majority Leader Michael J. McCaffrey (D-Dist.29, Warwick), would make these practices felony conduct. The bill would increase existing penalties to up to three years in prison and a fine of up to $10,000 for the first offense of misclassification or wage theft of $1,500-$5,000, or up to five years in prison and a fine of three times the wage amount or $20,000 (whichever is greater) for subsequent offenses of misclassification or wage theft in excess of $5,000.

“One simple rule that helps keep our economy running is that workers should receive the pay they deserve from the people who employ them,” said McCaffrey. “Wage theft is a very real problem that can be perpetrated in a number of different ways beyond the blatant refusal to pay workers for their work. It can include minimum wage violations, failure to pay overtime and misclassification of workers. This legislation will strengthen the penalties of wage theft to better empower workers.”

Members of the public can watch the hearing here: http://ritv.devosvideo.com/show?video=cd679c40105a .