Just a few months ago, Philadelphia enacted a new ordinance that targets employers who owe wages to their employees. It has often been difficult for employees to collect owed wages from employers, especially when the amount in question is considered small. This new ordinance applies to small sums of owed wages, ranging from $100-$10,000.
Before this city ordinance was initiated, employees only had one option to attempt recovery of owed wages: to pursue litigation. But now, the process has been greatly simplified and has become much more accessible. Claims can be made through email and within 110 days the employee will be notified of an official decision.
A city government official called a “Wage Theft Coordinator” is the one who now makes the decision. The Wage Theft Coordinator reviews the employee’s claim of owed wages, makes a determination and may even require employer penalties, like a monetary fine or a revocation of the employer’s permits and license of operation.
This ordinance applies to any company that operates within city limits. It also includes any company or employer who performs work inside the city, even if the company’s headquarters or office is outside of Philadelphia. Another requirement of the ordinance is for all employers to post a notice inside the workplace that alerts their employees of their worker’s rights under this new legislation. Because not all employees may be aware of this ordinance, it is very important that an employer follow these legal guidelines and insures that their employees know that they have this important, legal recourse should they ever need to collect owed wages.
The issue of wage theft has hit the workers of Philadelphia especially hard in recent years. Far too often, employees believe that if they are owed $10,000 or less, that collection may not be possible under current legislation and legal guidelines. This ordinance aims to solve that problem. Temple University Beasley School of Law’s Center for Social Justice conducted a study that found that employers deliberately underpaid more than 93,000 low wage workers in the city. The forms of underpayment vary, including illegal deductions, overtime violations, making employees work without clocking in and failures to pay minimum wage.
The study revealed other shocking data as well. While employees do not need to pursue traditional litigation to potentially collect owed wages, the current laws that are in place do not prove as a strong enough deterrent against wage theft. The collection process is a fairly long one, and when employers have substantial assets, they often fight against the claims made by their employees. Currently, all the ordinance allows for is a 25% penalty to be deducted from the employer, and, if the employee is successful as a plaintiff they are awarded a recovery of attorney fees.
In response to their city-wide findings, Temple’s Center for Social Justice has recommended that the penalties against employers become much more severe. With larger financial penalties and not limiting the lifespan of three years to current wage laws, the Center believes that perhaps the amount of wage theft occurring could diminish. Another idea was for the city to enact liens to the employer’s property when they are found to be underpaying or refusing to pay employees. In the upcoming weeks and months, we will see how this new ordinance affects employees and employers alike. If you have any questions about the new legislation or would like more information on Temple University’s study, click here: https://www.phlcouncil.com/philly-wage-theft. Please do not forget that as an employee, you are owed the wages that you work for. If your employer is refusing to pay you or underpaying you, that is a violation of your legal rights.
If you are the victim of wage theft, call the employment lawyers at Galfand Berger, LLP. With offices located in Philadelphia, Reading and Bethlehem, we serve clients throughout Pennsylvania and New Jersey. To schedule a consultation, call us at 800-222-8792 or complete our online contact form.