Wage Theft Bill Seeks to Crack Down on Growing Problem

The Massachusetts State House at night. Photo by J. Graham Pearsall/BU News Service

By Sarah Toy
Boston University Statehouse Program

A version of this article was also published in the Worcester Telegram & Gazette.

It happened almost five years ago, but 30-year-old José Loja still thinks about it.

During the summer of 2012, Loja, his father and two of his brothers worked on two buildings in the Botany Bay apartment complex in Worcester, installing siding, shingling roofs and completing rough framing.

But when it came time for payment, the project’s main subcontractor — Fastway Builder Inc. — was nowhere to be found.

Loja, who emigrated to the United States from Ecuador about 13 years ago, said he and his family were paid after their first month of work. The money stopped after that.

“We worked for almost two months without getting paid,” said Loja in Spanish through an interpreter. “It was a very long block of time.”

Loja spent months trying to reach Fastway’s owner by phone and at his home, but was never able to track him down.

“We never saw him again,” he said.

The amount owed to the five men was over $25,000, said Loja.

A wage theft bill is back before the Massachusetts Legislature this session, looking to crack down on such cases. It seeks to give the attorney general greater authority to hold companies accountable by providing the ability to sue lead contractors for civil damages for wage theft violations committed by their subcontractors. It would also give the attorney general the authority to shut down work sites until such violations are corrected.

The bill cleared the Senate about two weeks before the end of formal sessions last year and was sent to the House Ways and Means Committee, but did not emerge for a vote. Advocates and lawmakers behind the bill are hoping the second time’s the charm.

During a recent press conference promoting the bill, Attorney General Maura Healey described it as a significant issue that continues to grow.

Last year, her office received over 20,000 calls from people reporting stolen wages, along with 6,000 filed complaints, she said. Since last summer, her office has cited 232 employers for more than $6 million in wage theft violations.

Her office is now on track to double the amount they recovered for workers and more than triple the number of penalties they issued last year, a reflection of a growing problem, she said.

Healey said passing a wage theft bill is a top priority for her office.

“It’s . . . important that we advocate for what we need to have in place to make sure that wage theft isn’t occurring,” she said.

Diego Low, coordinator of Metrowest Worker Center, a nonprofit group based in Framingham that advocates on behalf of immigrants and workers, said most projects now involve multiple layers of subcontracting. This makes it difficult for workers to recover stolen wages.

Identifying who exactly someone works for is tricky when there are multiple layers, including many cases where at least one of the subcontractors involved is from out of state.

“You’re easily talking about a couple years to do this through the legal system,” he said.

Low thinks a wage theft bill is long overdue.

“I think the bill is crucial,” he said. “It will bring real accountability.”

According to Liliana Ibara, an attorney in the Employment Law Unit at Greater Boston Legal Services, under the current law, the attorney general can issue a civil citation or even pursue criminal charges against an employer when a worker files a wage theft complaint. If the employer does not pay what is owed, the attorney general can issue a lien against them.

However, the attorney general largely cannot sue an employer for wage theft violations; that is up to the worker. Under the new law, the attorney general would be able sue both direct employers or general contractors for civil damages.

“It really is going to adapt the law to how the work world actually functions now,” said Ibara. “It will bring the law up to what is happening.”

Critics of the bill have said it would hold lead companies unfairly responsible for subcontractors’ actions they may not even have knowledge of. They have also expressed concern that it would deter companies from doing business in Massachusetts. Last session, 12 business organizations sent a letter to Senate Ways and Means Chair Karen Spilka, calling the bill’s proposals “extreme and flawed.”

“Our fear is that . . . this concept would be seen as detrimental to businesses here that are expanding and businesses coming in,” said Greg Beeman, president and CEO of Associated Builders and Contractors in Massachusetts, one of the organizations that opposes the bill.

“I think most responsible businesses would want to make sure their contractors are not exploiting their workers,” said Darlene Lombos, executive director of Boston-based advocacy group Community Labor United.

“If it deters businesses, then we want businesses that are responsible and respect workers and respect an economy driven by values, not by exploitation,” she added.

Supporters believe the proposed law will benefit most businesses in the state, saying it will level the playing field by deterring employers that try to cut costs by skirting wage laws.

“It’s also businesses that are trying to do the right thing that are being hurt,” said Lombos.

Sen. Sal N. DiDomenico, D-Everett, the lead sponsor of the Senate bill, said he was confident it would pass this session.

“There is tremendous support,” he said. “We have many people who have co-sponsored this bill in both chambers. “

The bill was approved by the Senate 38-2 last year, so its passage now mostly depends on the House. The House bill has 104 co-sponsors — more than half the of the chamber’s 160 members. Last year’s bill had 76.

Rep. Paul Brodeur, D-Melrose, the House Chair of the Joint Committee on Labor and Workforce Development, is also optimistic about the bill’s prospects.

“There is broad consensus that something needs to be done,” he said.

Loja of Worcester expressed enthusiasm about the bill, saying he hoped it would help prevent others from having an experience like his.

“It would be great if there was legislation that would give us a bit more ability to defend ourselves,” he said.


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