Press Release

Attorney General Josh Shapiro Opposes Labor Department Program that Takes Away Workers’ Rights

April 11, 2018 | Topic: Rights

Coalition of 11 State Attorneys General Voice Serious Concerns about Department of Labor Program that Gives Employers’ Free Pass to Pay Overdue Wages Without Penalty

HARRISBURG — Attorney General Josh Shapiro today took action to stand up for workers’ rights to be paid fair wages for all of their work, as he strongly opposed a Department of Labor program that takes away workers’ rights by giving employers a free pass to pay back overdue wages to their employees — without facing any penalties for violating federal and state labor laws.

Joined by a coalition of 10 other Attorneys General, Attorney General Shapiro opposed the recently announced Payroll Audit Independent Determination (PAID) Program, a pilot project of the U.S. Department of Labor. The program allows employers who violate labor laws to simply pay back wages, without interest or penalty, instead of facing prosecution for wage theft.

“This program will allow employers to essentially take interest-free loans out of their employees’ paychecks – including workers who rely on their wages to pay for rent, groceries and other essential items,” Attorney General Josh Shapiro said. “This program undermines and erodes my authority as Attorney General to protect workers in our Commonwealth using state law protections. Employers should not be able to violate labor laws without legal consequence. If the Department of Labor won’t protect workers, I will. I strongly oppose this program.”

In a letter that the Attorneys General sent today to Labor Secretary Alexander Acosta, the coalition makes clear that the PAID Program:

  • Encourages employers to require their employees to waive important state law protections, like higher minimum wage levels and longer time periods to sue, in exchange for the employer’s payment of overdue wages.
  • Allows employers currently under investigation by Attorneys General or state labor enforcement agencies to participate in the PAID program. Employers must certify that they are “not specifically aware of any recent complaints” made by employees, but many employers would not have knowledge of complaints made or ongoing investigations by state or local enforcement authorities.
  • Permits employers to conduct self-audits with the hope that employers will self-report violations and correct them without oversight by other agencies. The Department of Labor proposes that employers work in “good faith” to correct their own mistakes.

“Allowing employers to self-audit and report is like Americans auditing their own tax returns and reporting themselves to the IRS if they were dishonest, in order to avoid interest, penalties and fines,” Attorney General Shapiro said. “If employers don’t pay their workers all the wages they’re due, state attorneys general can and will investigate and take action where appropriate to protect workers.  This program would erode these protections for workers, and I’m fighting against its implementation.”

Other language in the PAID Program would allow employers to settle state law claims with workers – many of whom are not aware of their legal rights under state labor laws – without supervision of the settlement by the Department of Labor. As the Attorneys General state in their letter, this “presents significant danger that employers will abuse the PAID Program to pressure employees into overbroad waivers of their rights under state labor laws.”

The PAID pilot program will be implemented nationwide for approximately six months, at which point it will be evaluated by the Department of Labor and potentially made permanent.

In February, Attorney General Shapiro opposed a rule change by the Trump Administration that would have allowed employers to keep the tips earned by waiters, waitresses, bartenders and other service industry workers. Following formal comments, which were led by Attorney General Shapiro and submitted by a coalition of 17 Attorneys General, the appropriations bill passed by Congress last month blocked the Department of Labor’s efforts to allow employers to steal workers’ tips – a win for American and Pennsylvania workers.

Joining Attorney General Shapiro in sending today’s letter were the Attorneys General of California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey, New York, Washington, and the District of Columbia.

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