Michigan Dems want tougher ‘wage theft’ penalties

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Democrats in the Michigan House and Senate are preparing bills designed to crack down on alleged “wage theft” by increasing law enforcement efforts, boosting penalties and requiring more worker back pay from offending employers.

Sponsors say the pending legislation would add teeth to existing state laws to protect workers at companies that may violate minimum wage rules, make illegal paycheck deductions, deny meal breaks or fail to properly compensate tipped workers.

“Ensuring bigger paychecks also means doing everything we can to keep hard working people from getting ripped off,” said Senate Minority Leader Jim Ananich, D-Flint.

Democrats are outnumbered in the Legislature and rarely advance major policy proposals without Republican support. House Speaker Tom Leonard, R-DeWitt, will look at the bills once they are introduced, a spokesman said. Business groups have opposed similar bills in other states, arguing they would create onerous regulations on top of existing laws.

The new push comes on the heels of a May report from the union-backed Economic Policy Institute found that an estimated 130,000 Michigan workers lose some deserved wages annually, with average underpayments of $63 per week totaling $429 million per year.

Set for introduction later this week or next, the bills would increase criminal and civil penalties for companies that violate wage laws. Democrats also want to double enforcement staff at the Department of Licensing and Regulatory Affairs.

Under a new penalty scheme, workers who suffered lost wages would be eligible for three times the amount owed, up from two times in current law.

The package “will make bad actors think twice before stealing from workers,” said House Minority Leader Sam Singh, D-East Lansing.

But Michigan businesses must already comply with “effective” wage theft laws, said Charlie Owens of the National Federation of Independent Businesses, whose group has not seen the pending legislation but is likely to oppose it.

“We don’t support any employer that knowingly violates wage and hour laws, but the intention of the bills that we’ve seen in other states is strictly to be punitive and put the burden of proof entirely on the employer, which in current law it already is to some extent,” Owens said.

Owens noted the GOP-led Michigan Legislature approved a new law in 2015 limiting local government’s ability to regulate workplace rules and penalties.

“It doesn’t surprise me they’d try to do it at the state level since they’ve been headed off in the past trying to do it city by city or county by county,” he said.

Two Michigan workers who claimed they were subject to wage theft joined Democrats on a conference call to announce the legislation.

Lauren Rosen said she was fired from a “well known” restaurant in Detroit after accusing management of stealing tips from workers. Facing legal threats, the company later reimbursed employees for back pay, she said, declining to name the restaurant.

Union and liberal groups quickly praised the legislation, which Michigan AFL-CIO President Ron Bieber called “long overdue.” The liberal Michigan League for Public Policy also supports the proposal, a spokesman said.