2019 -- S 0510 SUBSTITUTE A

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LC001867/SUB A/2

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS - PAYMENT OF WAGES -

VIOLATIONS

     Introduced By: Senators Lynch Prata, Ruggerio, McCaffrey, Goodwin, and Ciccone

     Date Introduced: February 27, 2019

     Referred To: Senate Labor

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 28-14-17, 28-14-19, 28-14-19.1 and 28-14-19.2 of the General

Laws in Chapter 28-14 entitled "Payment of Wages" are hereby amended to read as follows:

     28-14-17. Penalty for violations.

     (a) Any employer who violates or fails to comply with any of the provisions of this

chapter shall be guilty of a misdemeanor, and upon conviction of the misdemeanor, the employer

shall be punished by a fine of not less than four hundred dollars ($400) for each separate offense,

or by imprisonment of up to one year, or by both fine and imprisonment. Each day of failure to

pay wages due and/or misclassify an employee at the time specified in this chapter shall

constitute a separate and distinct violation.

     (b) Any employer found guilty of violations of this chapter to have violated any provision

of titles 25 or 28 who does not pay wages and fines within thirty (30) days of a final decision in a

manner that is consistent with a formal decision issued by the director or designee, or with the

terms of any settlement agreement entered into by the parties and after notification by the

department of labor and training, may shall have his, her or its business license revoked by the

state of Rhode Island until he, she or it pays such wages and fines in full or enters into a payment

agreement with which he, she or it stays in compliance.

     (c) If any employer is found guilty of violations of this chapter by three (3) separate

administrative hearing decisions or settlement agreements or any combination thereof, within a

two (2) year period, the department of labor and training shall notify any and all government

agencies in which the employer is or should be licensed and/or registered. Upon receipt of such

notice by the department of labor and training, the board and/or agency(s) responsible for

regulating such employer shall immediately suspend all the employer's licenses and registrations

that allow them to do business in the state of Rhode Island. The suspension of these licenses

and/or registrations shall continue for at least three (3) years and until all wages, benefits, or other

sums owed have been paid. For the purposes of this subsection, each administrative hearing

decision shall include all of the individuals found to be misclassified at the time the decision is

rendered or any appeal process is complete. Each settlement agreement shall include all

individuals found to be misclassified at the time the agreement is executed by both parties.

     28-14-19. Enforcement powers and duties of director of labor and training.

     (a) It shall be the duty of the director to insure compliance with the provisions of this

chapter 28-14 and 28-12 chapter 14 and chapter 12 of title 28. The director or his or her designee

may investigate any violations thereof, institute or cause to be instituted actions for the collection

of wages and institute action for penalties or other relief as provided for within and pursuant to

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

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

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

     (b) Upon receipt of a complaint or conducting an inspection under applicable law, the

director or his or her appropriate departmental designee is authorized to investigate to determine

compliance with the chapters 28-12 and/or 28-14 titles 25 or 28.

     (c) With respect to all complaints deemed just and valid, the director or his or her

designee shall order a hearing thereon at a time and place to be specified, and shall give notice

thereof, together with a copy of the complaint or the purpose thereof, or a statement of the facts

disclosed upon investigation, which notice shall be served personally or by mail on any person,

business, corporation, or entity of any kind affected thereby. The hearing shall be scheduled

within thirty (30) one hundred twenty (120) days of service of a formal complaint as provided

herein a departmental determination that the complaint is just and valid. The person, business,

corporation, or entity shall have an opportunity to be heard in respect to the matters complained

of at the time and place specified in the notice. The hearing shall be conducted by the director or

his or her designee. The hearing officer in the hearing shall be deemed to be acting in a judicial

capacity, and shall have the right to issue subpoenas, administer oaths, and examine witnesses.

The enforcement of a subpoena issued under this section shall be regulated by Rhode Island civil

practice law and rules. The hearing shall be expeditiously conducted and upon such hearing the

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hearing officer shall determine the issues raised thereon and shall make a determination and enter

a decision and/or an order within thirty (30) one hundred twenty (120) days of the close of the

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

parties to the proceeding, personally or by mail. The order shall dismiss the complaint or direct

payment of any wages and/or benefits found to be due and/or award such other appropriate relief

or penalties authorized under chapter 28-12 and/or 28-14 titles 25 or 28, and the order may direct

payment of reasonable attorneys' fees and costs to the complaining party. Interest at the rate of

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

to the date of payment.

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

up to two (2) four (4) times the total wages and/or benefits found to be due, exclusive of interest,

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

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

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

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

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

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

employees affected.

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

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

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

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

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

chapters 12 and/or 14 of title 28, and/or chapter 13 of title 37. The director shall notify the tax

administrator of any determination hereunder that may affect liability for an employer's payment

of wages and/or payroll taxes.

     28-14-19.1. Misclassification of employees.

     (a) The misclassification of a worker whether performing work as a natural person,

business, corporation, or entity of any kind, as an independent contractor when the worker should

be considered and paid as an employee shall be considered a violation of this chapter.

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

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

than one thousand five hundred dollars ($1,500) and not greater than three thousand dollars

($3,000) for each misclassified employee for a first offense and up to five thousand dollars

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($5,000) not less than ten thousand dollars ($10,000) for each misclassified employee for any

subsequent offense, which shall be shared equally between the department and the aggrieved

party.

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

his or her designee shall consider the size of the employer's business; the good faith of the

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

violation was an innocent mistake or willful.

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

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

any prevailing wage violation.

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

department of labor and training.

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

administrator of any violation of this section.

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

relief.

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

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

misclassification in violation of chapters 28-12 and/or 28-14 titles 25 or 28 may file a civil action

in any court of competent jurisdiction to obtain relief. If a complaint has been filed with the

department, any civil action related to that case must be filed prior to the issuance of a case

number or docket number by the department. An aggrieved party shall be entitled to recover any

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

two (2) four (4) times the amount of unpaid wages and/or benefits owed, as well as an award of

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

rights, and reasonable attorneys' fees and costs, and/or such other appropriate relief or penalties

authorized under chapters 28-12 and/or 28-14 chapters 12 and/or 14 of title 28. In determining the

amount of any penalty imposed under this section, consideration shall be given to the size of the

employer's business, the good faith of the employer, the gravity of the violation, the history of

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

unpaid fringe benefit contributions owed pursuant to this section in any form shall be paid to the

appropriate benefit fund: however, in the absence of an appropriate fund, the benefit shall be paid

directly to the aggrieved employee.

     (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

situated.

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

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

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

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

employees.

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

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

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

notice of an administrative hearing accepts a formal complaint and assigns a case number or

docket number to the matter.

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

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

contractors ' registration board and/or the tax administrator.

     (g) Any claim hereunder shall be forever barred unless commenced within three (3) years

after the cause of action accrued.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO LABOR AND LABOR RELATIONS - PAYMENT OF WAGES -

VIOLATIONS

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     This act would increase penalties for violations of certain wage and hour laws.

     This act would take effect upon passage.

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