Pay Checks & Balances
10:46 am
Fri February 1, 2013

Wash. Lawmakers Take Up "Wage Theft" Bill

A proposed bill in Olympia aims to crack down on employers who shortchange their workers. The measure would create harsher penalties for business that skimp on minimum wage, overtime pay, or just flat out fail to hand over a paycheck.

This type of  underpayment is often referred to as “wage theft.” Advocates of the bill, HB 1440, say the victims of wage theft tend to be low-income workers and undocumented immigrants.

A hearing on the bill in Olympia Thursday drew a mixed crowd, including Susan Bittner who owns a flooring company in Seattle. Bittner said some businesses classify workers as contractors rather than employees in order to pay them less.

"My ability to compete with the underground economy is near impossible."

"I’ve seen, over the years, the independent contractors being abused and misclassified, and my ability to compete with the underground economy is near impossible," Bittner said. She thinks the proposed bill would help level the playing field for workers and employers.

Other bill supporters said that some employers classify people as subcontractors to avoid paying insurance premiums and other employee benefits. The bill would create a new test to ensure that businesses are correctly classifying their workers.

Tom Kwieciak is with the Building Industry Association of Washington.  His group opposes the bill, partly because he says it fails to address key part of the problem.

"In a large percentage of these cases, the worker is complicit. They know what's going on. They're doing this to get paid cash."

"In a large percentage of these cases, the worker is complicit in the arrangement here, " Kwieciak said. "They know what’s going on. They’re doing this to get paid cash without all the deductions from their paychecks. Yet there’s no penalties or sanctions in the legislation that deal with the worker at all.”

Kwieciak  also said the proposed bill is unnecessary because state laws already address wage theft. He suggests the state Department of Labor and Industry needs to do a better job of enforcing what’s currently on the books.