2012 -- S 2422

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LC01278

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO LABOR AND LABOR RELATIONS - PAYMENT OF WAGES

     Introduced By: Senators Miller, Lanzi, and Goodwin

     Date Introduced: February 15, 2012

     Referred To: Senate Labor

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 28-12-19 of the General Laws in Chapter 28-12 entitled "Minimum

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Wages" is hereby amended to read as follows:

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     28-12-19. Liability to employee for substandard wages. Actions for relief. -- Any

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employer who pays any employee less than the applicable wage rate to which the employee is

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entitled under or by virtue of this chapter shall be liable to the affected employee for the full

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amount of the wage rate, less any amount actually paid to the employee by the employer, and for

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costs and the reasonable attorney's fees that may be allowed by the court. Any agreement between

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the employee and the employer to work for less than the wage rate shall be no defense to the

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action. Any person aggrieved by a violation of this chapter shall be entitled to relief as provided

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in chapter 28-14 (“Payment of Wages”).

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     SECTION 2. Sections 28-14-1 and 28-14-19 of the General Laws in Chapter 28-14

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entitled "Payment of Wages" are hereby amended to read as follows:

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     28-14-1. Definitions. -- Whenever used in this chapter:

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      (1) "Director" means the director of the department of labor and training or his or her

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duly authorized representative.

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      (2) "Employee" means any person suffered or permitted to work employed by an

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employer, except that independent contractors or subcontractors shall not be considered

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employees. The foregoing definition shall be interpreted consistent with the definition of

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“employee” under 29 U.S.C. 203(e) of the fair labor standards act, including any exceptions or

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exemptions thereto under said act applicable to employment in this state.

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      (3) "Employer" means any individual, firm, partnership, association, joint stock

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company, trust, corporation, receiver, or other like officer appointed by a court of this state, and

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any agent or officer of any of the previously mentioned classes, employing any person in this

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state. The foregoing definition shall be interpreted consistent with subdivision (2) above and the

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definition of “employer” under 29 U.S.C. 203(d) of the fair labor standards act, including any

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exemptions or exceptions thereto under said act applicable to employment in this state.

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      (4) "Wages" means all amounts at which the labor or service rendered is recompensed,

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whether the amount is fixed or ascertained on a time, task, piece, commission basis, or other

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method of calculating the amount.

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     (5) “Employ” means to suffer or permit to work. The foregoing definition shall be

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interpreted consistent with the definition of “employ” under 29 U.S.C. 203 (g) of the fair labor

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standards act, including any exemptions or exceptions thereto under said act applicable to

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employment in this state

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     28-14-19. Enforcement powers and duties of director of labor and training. -- (a) It

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shall be the duty of the director to insure compliance with the provisions of this chapter 28-14 and

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28-12., to The director or his or her designee may investigate any violations of this chapter,

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thereof, to institute or cause to be instituted actions for the collection of wages, and to institute

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action for penalties provided under this chapter. or other relief as provided for within and

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pursuant to those chapters. The director or his or her authorized representatives are empowered to

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hold hearings and he or she shall cooperate with any employee in the enforcement of a claim

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against his or her employer in any case whenever, in his or her opinion, the claim is just and

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valid.

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      (b) The director is authorized to supervise the payment of amounts due to employees,

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and the employer may be required to make these payments to the director to be held in a special

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account in trust for the employees, and paid on order of the director directly to the employee or

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the employees affected. The employer shall also pay the director an administrative fee equal to

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twenty-five percent (25%) of any payment made directly to the employee or employees or made

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to the director pursuant to this section and chapters 5-23, 25-3 and 28-12 for the first offense. An

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additional payment in the amount of fifty percent (50%) shall be assessed for each subsequent

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violation. The fee shall be deposited in the general fund. Upon receipt of a complaint or

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conducting an inspection under applicable law, the director or his or her appropriate departmental

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designee is authorized to investigate to determine with the chapters 28-12 and/or 28-14.

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      (c) The director may institute any action to recover unpaid wages or other compensation

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under this chapter, including the administrative fee contained in subsection (b) of this section,

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with or without the consent of the employee or employees affected. With respect to all complaints

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deemed just and valid, the director or his or her designee shall order a hearing thereon at a time

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and place to be specified, and shall give notice thereof, together with a copy of the complaint or

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the purpose thereof, or a statement of the facts disclosed upon investigation, which notice shall be

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served personally or by mail on any person, business, corporation, or entity of any kind affected

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thereby. The hearing shall be scheduled within thirty (30) days of service of a formal complaint

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as provided herein. The person, business, corporation, or entity shall have an opportunity to be

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heard in respect to the matters complained of at the time and place specified in the notice. The

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hearing shall be conducted by the director or his or her designee. The hearing officer in the

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hearing shall be deemed to be acting in a judicial capacity, and shall have the right to issue

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subpoenas, administer oaths, and examine witnesses. The enforcement of a subpoena issued

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under this section shall be regulated by Rhode Island civil practice law and rules. The hearing

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shall be expeditiously conducted and upon such hearing the hearing officer shall determine the

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issues raised thereon and shall make a determination and enter an order within thirty (30) days of

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the close of the hearing, and forthwith serve a copy of the order, with a notice of the filing

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thereof, upon the parties to the proceeding, personally or by mail. The order shall dismiss the

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complaint or direct payment of any wages and/or benefits found to be due and/or award such

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other appropriate relief or penalties authorized under chapter 28-12 and/or 28-14, and the order

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may direct payment of reasonable attorneys’ fees and costs to the complaining party. Interest at

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the rate of twelve percent (12%) per annum shall be awarded in the order from the date of the

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nonpayment to the date of payment.

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     (d) The order shall also require payment of a further sum as a civil penalty in an amount

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up to two (2) times the total wages and/or benefits found to be due, exclusive of interest, which

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shall be shared equally between the department and the aggrieved party. In determining the

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amount of any penalty to impose, the director or his or her designee shall consider the size of the

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employer’s business, the good faith of the employer, the gravity of the violation, the previous

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violations and whether or not the violation was an innocent mistake or willful.

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     (e) The director may institute any action to recover unpaid wages or other compensation

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or obtain relief as provided under this section with or without the consent of the employee or

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employees affected.

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     (f) No agreement between the employee and employer to work for less than the

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applicable wage and/or benefit rate or to otherwise work under and/or conditions in violation of

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applicable law is a defense to an action brought pursuant to this section.

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     (g) The director shall notify the contractors’ registration board of any order issued or any

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determination hereunder that an employer has violated chapters 28-12, 28-14 and/or 37-13. The

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director shall notify the tax administrator of any determination hereunder that may affect liability

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for an employer’s payment of wages and/or payroll taxes.

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     SECTION 3. Sections 28-14-18, 28-14-18.1 and 28-14-18.2 of the General Laws in

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Chapter 28-14 entitled "Payment of Wages" are hereby repealed.

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     28-14-18. Protection. -- An employer shall not discharge, threaten, or otherwise

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discriminate against an employee regarding the employee's compensation, terms, conditions,

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location or privileges of employment because:

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      (1) The employee, or a person acting on behalf of the employee, reports or is about to

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report to the department verbally or in writing, a violation which the employee knows or

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reasonably believes has occurred or is about to occur of a law or regulation or rule promulgated

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by the department unless the employee knows or has reason to know that the report is false; or

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      (2) An employee is requested by the department to participate in an investigation,

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hearing, or inquiry held by the department or a court action.

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     28-14-18.1. Relief and damages. -- (a) A person who alleges a violation of this chapter

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may bring a civil action for appropriate injunctive relief or actual damages or both within one

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year after the occurrence of the alleged violation of this chapter.

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      (b) An action commenced pursuant to subsection (a) of this section may be brought in

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the superior court for the county where the alleged violation occurred, the county where the

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complainant resides, or the county where the person against who the civil complaint is filed

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resides or has his or her principal place of business.

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      (c) As used in subsection (a) of this section, "damages" means damages for injury or loss

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caused by each violation of this chapter.

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      (d) An employee shall show by clear and convincing evidence that he or she or a person

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acting on his or her behalf was about to report to the department verbally or in writing a violation

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which the employee knew or reasonably believed had occurred or was about to occur of a law or

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regulation of the department.

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     28-14-18.2. Reinstatement. -- A court, in rendering a judgment in an action brought

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under this chapter, shall order, as the court considers appropriate, reinstatement of the employee,

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the payment of back wages, full reinstatement of fringe benefits and seniority rights, actual

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damages, or any combination of these remedies. A court may also award the complainant all or a

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portion of the costs of litigation, if the court determines that the award is appropriate.

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     SECTION 4. Chapter 28-14 of the General Laws entitled "Payment of Wages" is hereby

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amended by adding thereto the following sections:

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     28-14-19.1. Misclassification of employees. – (a) The misclassification of a worker

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whether performing work as a natural person, business, corporation or entity of any kind, as an

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independent contractor when the worker should be considered and paid as an employee shall be

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considered a violation of this chapter.

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     (b) In addition to any other relief to which any department or an aggrieved party may be

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entitled for such a violation, the employer shall be liable for a civil penalty in an amount not less

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than five hundred dollars ($500) and not greater than three thousand ($3,000) dollars for each

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misclassified employee for a first offense and up to five thousand dollars ($5,000) for each

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misclassified employee for any subsequent offense, which shall be shared equally between the

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department and the aggrieved party.

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     (c) In determining the amount of any penalty imposed under this section, the director or

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his or her designee shall consider the size of the employer’s business, the good faith of the

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employer, the gravity of the violation, the history of previous violations, and whether or not the

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violation was an innocent mistake or willful.

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     (d) A violation of this section may be adjudicated under section 28-14-19 and

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consolidated with any labor standards violation or under sections 37-13-14.1 and 15 and

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consolidated with any prevailing wage violation.

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     (e) A violation of this section may be brought or adjudicated by any division of the

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department of labor and training.

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     (f) The department shall notify the contractor’s registration board and the tax

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administrator of any violation of this section.

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     28-14-19.2. Private right of action to collect wages or benefits and for equitable

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relief. – (a) Any employee or former employee, or any organization representing such an

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employee or former employee aggrieved by the failure to pay wages and/or benefits or

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misclassification in violation of chapters 28-12 and/or 28-14 may file a civil action in any court of

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competent jurisdiction to obtain relief. An aggrieved party shall be entitled to recover any unpaid

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wages and/or benefits, compensatory damages, and liquidated damages in an amount up to two

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(2) times the amount of unpaid wages and/or benefits owed, as well as an award of appropriate

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equitable relief, including reinstatement of employment, fringe benefits and seniority rights, and

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reasonable attorneys’ fees and costs, and/or such other appropriate relief or penalties authorized

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under chapters 28-12 and/or 28-14. In determining the amount of any penalty imposed under this

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section, consideration shall be given to the size of the employer’s business, the good faith of the

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employer, the gravity of the violation, the history previous violations, and whether or not the

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violation was an innocent mistake or willful. Any unpaid fringe benefit contributions owed

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pursuant to this section in any form shall be paid to the appropriate benefit fund: however, in the

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absence of an appropriate fund, the benefit shall be paid directly to the aggrieved employee.

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     (b) An action instituted pursuant to this section may be brought by one or more

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employees or former employees individually and/or on behalf of other employees similarly

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situated.

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     (c) No agreement between the employee and employer to work for less than the

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applicable wage and/or benefit rate or to otherwise work under terms and/or conditions in

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violation of applicable law is a defense to an action brought pursuant to this section.

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     (d) An employer’s responsibility and liability hereunder is solely to the employer’s own

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employees.

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     (e) A civil action filed under this section may be instituted instead of, but not in addition

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to, the director of labor and training enforcement procedures authorized by the above referenced

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chapters, provided the civil action is filed prior to the date the director of labor and training issues

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notice of an administrative hearing.

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     (f) The filing of a civil action under this section shall not preclude the director of labor

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and training from investigating the matter and/or referring the matter to the attorney general,

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contractors’ registration board and/or the tax administrator.

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     (g) Any claim hereunder shall be forever barred unless commenced within two (2) years

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after the cause of action accrued, except that a cause of action arising out of a willful violation

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may be commenced within three (3) years after the cause of action accrued.

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     28-14-19.3. Protection from retaliation. – No employer, or any person acting on behalf

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of the employer, shall discharge, threaten, or otherwise discriminate or retaliate against an

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employee or any other person for asserting, supporting, reporting, or participating in or being

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asked to participate in the investigation or determination of claim violation or actionable under

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sections 28-12 and/or 28-14.

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     Any person aggrieved by a violation of this section shall be entitled to relief as provided

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under chapter 28-50 (“The Rhode Island Whistleblowers’ Protection Act”), provided, that such

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action must be commenced within one year after the cause of action accrued or shall be thereafter

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barred.

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     SECTION 5. Section 28-50-4 of the General Laws in Chapter 28-50 entitled "The Rhode

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Island Whistleblowers' Protection Act" is hereby amended to read as follows:

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     28-50-4. Relief and damages. -- (a) A person who alleges a violation of this act may

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bring a civil action for appropriate injunctive relief, or actual damages, or both within three (3)

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years after the occurrence of the alleged violation of this chapter.

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      (b) An action commenced pursuant to subsection (a) of this section may be brought in

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the superior court for the county where the alleged violation occurred, the county where the

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complainant resides, or the county where the person against whom the civil complaint is filed

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resides or has their principal place of business.

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      (c) As used in subsection (a) of this section, "damages" means damages for injury or loss

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caused by each violation of this chapter.

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      (d) An employee shall show by clear and convincing evidence that he or she or a person

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acting on his or her behalf was about to report to a public body, verbally or in writing, a violation,

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which the employee knew or reasonably believed had occurred or was about to occur, of a law of

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this state, a political subdivision of this state, or the United States.

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     SECTION 6. This act shall take effect upon passage.

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LC01278

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO LABOR AND LABOR RELATIONS - PAYMENT OF WAGES

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     This act would amend several provisions of the general laws pertaining to the payment of

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wages. The act would set forth a hearing procedure for alleged violations of chapters 28-12 and

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28-14, and would also provide a private right of action to an aggrieved employee in order to

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pursue wages, benefits, and other equitable relief.

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     This act would take effect upon passage.

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LC01278

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