District of Columbia Wage Theft Prevention Act Takes Effect February 26, 2015; Recent Amendments Modify Notice, Timekeeping, Payment, and Other Provisions

Act Now Advisory

Epstein Becker Green Labor and EmploymentAs we previously reported (see the Act Now Advisory titled “New District of Columbia Law Greatly Expands Remedies for Wage Law Violations and Places New Notice Requirements on Employers”), the “Wage Theft Prevention Amendment Act of 2014” (“Act”) (D.C. Act 20-426) was enacted on September 19, 2014. The Act generally broadens the coverage and expands the notice requirements, means of enforcement, retaliation protections, and available remedies under several D.C. wage laws.

In particular, the laws affected by the Act are the Wage Payment and Collection Law (“WPCL”), D.C. Code § 32-1301, et seq.; the Living Wage Act (“LWA”), D.C. Code § 2-220.01, et seq.; the Minimum Wage Revision Act (“MWRA”), D.C. Code § 32-100, et seq.; and the Accrued Sick and Safe Leave Act (“ASSLA”), D.C. Code § 32-131.01, et seq.

Following a delay in submission for congressional review, the Act is now set to take effect on February 26, 2015. In the meantime, the D.C. Council has passed emergency amendments (and identical temporary amendments) that modify several provisions in the original Act, most of which are designed to ease somewhat the burden of compliance with the many new requirements described in our previous Advisory.

The Changes Made by the Emergency Amendments

First, in the “Wage Theft Prevention Correction and Clarification Emergency Amendment Act of 2014” (D.C. Act 20-544, effective Dec. 29, 2014), the Council made changes to the original Act by:

  • repealing a provision applying the Act to all violations occurring after October 1, 2014 (this means that there will be no retroactive liability and employers will only be liable for violations that occur after the Act takes effect);
  • adding a direction that the mayor must make copies or summaries of the MWRA publicly available within 60 days after the Act takes effect, and an express provision that an employer will not be liable for failure to post this notice if the mayor has failed to provide it;
  • retaining language making contractors and subcontractors, and employers and temporary staffing firms, both jointly and severally liable for violations of the WPCL, LWA, MWRA, and ASSLA, while adding language grandfathering pre-existing contractual arrangements providing otherwise; however, the amendment does not change language generally requiring subcontractors to indemnify their general contractors for anything that a general contractor has to pay due to a subcontractor’s violation, and also retains language requiring temporary staffing firms to indemnify the employer unless otherwise agreed to by the parties;
  • deleting language that allowed unions to bring civil actions on behalf of members;
  • adding express authority for the mayor to issue rules to implement the provisions of the WPCL; and
  • replacing what previously were minimum misdemeanor financial penalties for both negligent and willful violation of the WPCL and LWA with new maximums per affected employee: (i) for negligent violations, up to $2,500 for the first offense and up to $5,000 thereafter, and (ii) for willful violations, up to $5,000 for the first offense and up to $10,000 thereafter, in addition to existing penalties of imprisonment of up to 30 and 90 days, respectively.

Second, the “Wage Theft Prevention Clarification Emergency Amendment Act of 2015” (DC Bill B21-0053, passed on February 3, 2015, and effective upon the mayor’s signature (which is expected by February 26, 2015)) will:

  • eliminate exempt executive, professional, administrative, outside sales, and home newspaper delivery employees from the new requirement to keep records of the precise time worked (but retains this requirement for certain other overtime exempt employees as well as all non-exempt employees);
  • expressly allow exempt executive, professional, and administrative employees to be paid only once a month, rather than the minimum of at least twice per month applicable to all other employees; and
  • require the mayor’s office to provide within 60 days sample templates of the notices that the Act states must be provided to all new employees at hire (or, for temporary staffing firms, on assignment) and, within 90 days after the Act takes effect, to all existing employees; additionally:
    • updated versions of the notice still must be provided whenever the information changes, e.g., if there is a change in pay rate; 
    • an employer now only has to provide a notice in a language other than English if (i) the mayor’s office makes available a template in that language and (ii) the employer knows the second language is the employee’s primary language or the employee requests the notice in a different language; and
    • an employer is still required to retain copies of the provided notice signed and dated by both the employer and the employee acknowledging receipt.

Although all these changes were initially made through emergency legislation that expires after 90 days, they are also the subject of identical temporary legislation signed, or expected to be signed, by the mayor that would become effective following a 30-day congressional review period ending before the emergency legislation expires. The temporary legislation will expire after 225 days, but the same provisions are expected to be incorporated in permanent legislation before that occurs. Of course, there is a good chance that the permanent legislation will include other changes.

What Employers Should Do Now

To the extent that they have not already done so, as advised in our prior Advisory, employers should do the following:

  • Review all pay procedures to make sure that they are in compliance with all District of Columbia wage payment requirements, such as the recently increased minimum wage requirements, tip credit provisions, Living Wage rates for government contractors, and sick leave under the ASSLA, including timely payment of all amounts due and swift resolution of any disputes. Also, make sure that exempt employees are timely and properly paid at least once per month.
  • If necessary, revise recordkeeping to record the precise time worked each day, not simply the hours worked, for all but fully exempt employees.
  • If applicable, cease paying new hires at the lower federal minimum wage.
  • Prepare for compliance with the new notice requirements for both new and existing employees. In particular, employers should do the following:
    • Monitor the District of Columbia’s Department of Employment Services wage and hour compliance website (http://does.dc.gov/service/wage-and-hour-compliance) for the English and foreign language templates for the notice that D.C. employers will need to provide to all new employees once the Act become effective and to all existing employees within 90 days thereafter, as well as for the new notice summarizing the MWRA, both of which are supposed to be available within 60 days.
    • Be prepared to provide their own forms of English notice to new hires for immediate use and, if there is still no official template within 90 days, for delivery to current employees. This preparation is necessary because there is uncertainty as to whether the notice requirement takes effect immediately as to new hires and within 90 days as to current employees even if Mayor Muriel Bowser has not yet provided a template, and there is no safe harbor if she fails to do so. As noted, employers need provide a notice in other languages only once the mayor provides templates.
  • Particularly in light of the 90-day presumption of retaliation, make sure that all managers and supervisors do not take any form of retaliation against employees complaining of any possible violation of the wage laws. 

In addition, both regular employers and temporary staffing firms should review the indemnification provisions in their contracts with each other.

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For more information about this Advisory, please contact:

Brian W. Steinbach
Washington, D.C.
[email protected]