FILED ON: 7/18/2016

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2434

The Commonwealth of Massachusetts

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In the One Hundred and Eighty-Ninth General Court
(2015-2016)

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An Act to prevent wage theft and promote employer accountability.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Section 27C of said chapter 149, as appearing in the 2014 Official Edition, is hereby amended by striking out, in line 159, the words “Civil and criminal” and inserting in place thereof the following word:- Criminal.

SECTION 2. Chapter 149 of the General Laws is hereby amended by inserting after section 148D the following 2 sections:-

Section 148E. (a) As used in this section and section 148F, the following words shall have the following meanings unless the context clearly requires otherwise:-

“Contracted entity”, a person or entity that directly enters into an agreement with a direct company to perform labor or services for the direct company.

“Direct company”, a business entity that directly enters into an agreement with a contracted entity for labor or services.

“Wage theft violation”, a violation of section 27, 27F, 27G, 27H, 148, 148A, 148B, 148C, 150, 150C,  152A, subsection (c) or (d) of section 159C or section 1, 1A, 1B, 2A, 7, 19 or 20 of chapter 151.

(b) A direct company shall be subject to joint and several civil liability and shall share civil legal responsibility for wages owed by a contracted entity as the result of a wage theft violation; provided, however, that if the contracted entity also qualifies as a sub-bidder under section 44F, a direct company shall not share civil responsibility for wages owed by the contracted entity that also qualifies as a sub-bidder under said section 44F as a result of a wage theft violation unless the direct company knew or should have known that the contracted entity committed a wage theft violation.

(c) A direct company shall be subject to joint and several civil liability and shall share civil legal responsibility for any penalties or fines owed by a contracted entity as a result of a wage theft violation if the direct company knew or should have known that a contracted entity has committed a wage theft violation.

(d) Nothing in this section shall preclude the exercise or enforcement of any lawful rights or remedies available for a wage theft violation.

(e) Notice of this section shall be prepared by the attorney general in the languages required in clause (iii) of subsection (d) of section 62A of chapter 151A. Direct companies and contracted entities shall post this notice in a conspicuous location accessible to employees or contracted workers in establishments where employees or contracted workers with rights under this section perform their duties. Direct companies and contracted entities shall provide a copy of the notice to their employees or contracted workers. This notice shall include the following information: (i) information describing wage theft violations; (ii) information about the notices, documentation and other requirements placed on employees or contracted workers in order to exercise their right to collect wages; (iii) information that describes the protections that an employee or contracted workers has in exercising rights under this section; and (iv) the name, address, phone number and website of the attorney general's office where questions about the rights and responsibilities under this section can be answered. Where the attorney general informs the director of the department of unemployment assistance or the director determines through credible evidence that an employer, person or entity responsible for the payment of contributions under section 14 of said chapter 151A has committed a wage theft violation or otherwise failed to timely pay wages to an individual, the individual’s unemployment benefit shall be calculated as if the wages had been timely paid.

Section 148F.  (a) Upon determination by the director of unemployment assistance or a designee that a person or entity has violated section 14 of chapter 151A, the director may issue a stop work order against the violator requiring the cessation of all business operations of the violator related to the violation cited in the stop work order; provided, however, that a stop work order shall only be issued against the person or entity found to be in violation and only related to the worksite or place of business or employment for which the violation exists. If a stop work order is issued, it shall be served at the worksite or place of business or employment of the violator by posting a copy of the stop work order in a conspicuous location at the place of business or employment.  The stop work order shall be effective 96 hours after the order is served upon the violator or at the worksite or place of business or employment of the violator. The stop work order shall contain the amount of contributions owed to the trust fund. If a person or entity submits documentation to the satisfaction of the director that all contributions owed related to the stop work order are properly paid prior to the stop work order taking effect, the director shall rescind the stop work order. 

If the stop work order goes into effect, it shall remain in effect until the director or designee rescinds the stop work order upon a finding that the wage theft violation has been corrected.

A person or entity against which a stop work order is issued may request a hearing by providing a written appeal, in a manner determined by the director, within 10 days from the date the stop work order is served.

(b) Upon determination by the attorney general that a person or entity has committed a wage theft violation, the attorney general may issue a stop work order against the violator requiring the cessation of all business operations of the violator; provided, however, that a stop work order shall only be issued against the person or entity found to be in violation and only related to the worksite or place of business or employment for which the violation exists. If a stop work order is issued, it shall be served at the worksite or place of business or employment of the violator by posting a copy of the stop work order in a conspicuous location at the place of business or employment.  The stop work order shall be effective 96 hours after the order is served upon the violator or at the worksite or place of business or employment of the violator. The stop work order shall contain a description of the violation, including the total amount owed to correct the violation. If a person or entity submits documentation to the satisfaction of the attorney general that all wages owed related to the stop work order are properly paid to all workers prior to the stop work order taking effect, the director shall rescind the stop work order. 

If the stop work order goes into effect, it shall remain in effect until the attorney general rescinds the stop work order upon a finding that the violation has been corrected.

A person or entity against which a stop work order is issued may request a hearing by providing a written appeal, in a manner determined by the attorney general, within 10 days from the date the stop work order is served.

(c) A stop work order and any penalty imposed against a person or entity shall be effective against any successor person or entity that: (i) has at least 1 of the same principals or officers as the person or entity against whom the stop work order or penalty was issued; and (ii) is engaged in the same or an equivalent trade or activity as the person or entity the stop work order was imposed against.

(d) An employee affected by a stop work order under this section shall be paid for the period the stop work order is in place or the first 10 days the employee was scheduled to work if the stop work order had not been issued, whichever is less. Any time lost pursuant to this section, not to exceed 10 days, shall be considered time worked under chapter 149. Subsection (b) and (c) of section 148E shall not apply to wages under this subsection.

SECTION 3. The department of unemployment assistance may promulgate regulations to implement sections 148E and 148F of chapter 149 of the General Laws, but not including subsection (b) of said section 148F of said chapter 149.

SECTION 3A. The office of the attorney general may promulgate regulations to implement sections 148E and 148F of chapter 149 of the General Laws, but not including subsection (a) of said section 148F of said chapter 149.

SECTION 4. A direct company shall not be liable under section 148E or 148F of chapter 149 of the General Laws unless a wage theft violation occurs on or after January 1, 2017.

SECTION 5. This act shall take effect on January 1, 2017.