Philadelphia’s New Wage Theft Law

June 30, 2016

A bill passed back in December to fight wage theft in Philadelphia will go in effect today, July 1, 2016. It’s one more reason for employees to cheer Mayor Nutter’s tenure in charge of the city.

The local law bolsters existing state and federal law to impose additional penalties for Philadelphia employers that fail to pay earned wages and creates the position of Wage Theft Coordinator at the City’s Managing Director’s Office.

Individuals and labor unions (“authorized organizations”) can now file a complaint with the city for unpaid wages of between $100 and $10,000. The Wage Theft Coordinator then determines whether wages are due and has the authority to order them paid. Employers in violation of the law will be subject to administrative penalties for each violation as well as the payment of the employee’s attorneys’ fees.

If the employer has a judgment against them from the Wage Theft Coordinator and the judgment is not paid to the employee, their licenses or permits authorized by the City can be revoked or suspended.

The new law maintains the existing private right to sue in a civil action for the failure to pay wages. However, exercise of this right suspends the proceedings with the Wage Theft Coordinator. As such, it will likely be used to recover pay for smaller wage disputes that do not make sense to pursue through potentially costly litigation.

The Independence Day weekend start to the wage theft law is a clever bonus. Wage theft has already stolen billions of dollars from American workers. A Temple report published last summer found that employers statewide fail to pay between $19 million and $32 million in wages owed according to the law. Specific to Philadelphia, around 11% of our city’s workforce reportedly experience wage theft in any given week.