Employment Law Update: Austin Wage Theft Ordinance
Austin is primed to become the third city in Texas to adopt a Wage Theft Ordinance, following Houston in 2013 and El Paso in 2015. The Austin City Council, which passed a resolution at the beginning of the year ordering the city’s Office of Civil Rights (OCR) to develop a proposed Ordinance, is scheduled to consider OCR’s final proposed Ordinance during the Council’s meeting this Thursday, Dec. 1. OCR held a handful of public comment and discussion sessions over the past few months as it worked through draft proposals. Cokinos | Young attorneys Shannon Gatlin and Wilson Stoker, along with representatives of Associated General Contractors and Associated Builders & Contractors, attended these sessions to advocate on behalf of the construction industry and protect the interests of contractors.
Cokinos | Young and industry representatives succeeded in securing some meaningful improvements to the version to be presented to the City Council. As a result of the efforts of industry advocates and Cokinos | Young, the Ordinance being presented for passage appears to strike a reasonable balance of protecting workers from wage theft while also insulating employers who run their businesses in a professional manner from unfounded claims or penalties.
The full draft of the Ordinance submitted to the City Council is available to review here. Some of the most noteworthy provisions are as follows:
- Current definition of “wage theft” appears to require intentionally or knowingly failing to pay proper wages.
- Current definition of “wage theft adjudication” does not include settlements reached in wage-and-hour disputes, decisions made by a private arbitrator, or court rulings that an employer violated the pay provisions of the federal Fair Labor Standards Act (FLSA). OCR has indicated, however, that the failure to include adverse FLSA rulings by a court was an oversight and the Ordinance is likely to be revised to include such rulings in this definition.
- Enforcement of the Ordinance is to be spearheaded by a Wage Theft Coordinator, who will be hired as a full-time city employee. This Coordinator is authorized to promulgate rules and regulations to effectuate the Ordinance, with those rules and regulations subject to the standard notice-and-comment procedures of similar local government rules and regulations.
- The Wage Theft Coordinator appears to only be authorized to investigate wage theft claims related to wages to be paid under a contract with the city, but also appears to have authority to refer any complaints (including those not involving city contracts) to “an appropriate investigative and enforcement authority” like the Texas Workforce Commission or U.S. Department of Labor.
- Creates a publicly available Wage Theft Database identifying employers within Austin with a record of wage theft adjudication as determined under the Ordinance. Employers will receive written notice and 30 days from the sending of the notice to protest their proposed inclusion in the Database. If the finding of wage theft adjudication is found to be warranted and is not otherwise overturned, the employer shall remain on the Database for 5 years. Though not spelled out in the Ordinance, OCR indicated the Database will likely be made available online and possibly in Spanish and other languages in addition to English.
- Complaints are encouraged – but not required – to include all of the following: (1) worker’s full name; (2) employer’s identity; (3) date(s) wages were earned; (4) date(s) wages were to be paid; (5) amount allegedly unpaid; (6) brief description of work performed; and (7) whether written demand for payment was sent to employer.
- Employers in the Database are barred from obtaining contracts to perform work for the City of Austin and may also have any existing contracts with the city canceled. Employers declared ineligible for city contracts can seek reinstatement by applying to the Wage Theft Coordinator.
- Retaliation against individuals for filing a complaint under the Ordinance is prohibited, with complaints investigated and employers penalized in the same manner as for complaints of wage theft under the Ordinance.
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