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6/26/2023 Craven/Kallman bill to toughen wage theft penalties enacted
STATE HOUSE – The governor has signed a bill by Sen. Meghan Kallman and Rep. Robert E. Craven to toughen penalties for wage theft, the most prevalent and costly form of theft in the United States.

“Wage theft is theft, period, and anyone guilty of victimizing their employees deserves to be held accountable for their crime,” said Representative Craven (D-Dist. 32, North Kingstown), who serves as Chairman of the House Judiciary Committee.  “This offense is even more egregious since it is usually perpetrated on our most vulnerable residents who are on the lower end of the socio-economic spectrum.  An honest day’s work deserves an honest pay and if our state’s employers fail to operate by this ideal, they will rightfully be punished under this legislation.”

Wage theft, when employers fail to pay legally required wages to employees, far exceeds robberies, car thefts and larceny in economic impact. It most commonly takes the form of employers paying less than the minimum wage, failing to pay overtime, requiring employees to perform tasks “off the clock,” or misclassifying workers as independent contractors to avoid labor laws.

“When the powerless steal, they are punished,” said Senator Kallman (D-Dist. 15, Pawtucket, Providence). “But when the powerful knowingly steal from hardworking Rhode Islanders, they have been getting away with it. I’m so glad we were able to get this done to show all the hard-working Rhode Islanders building the housing, clean energy and infrastructure we so desperately need that we have your back and will ensure you get paid what you’re owed.”

“Wage theft takes many forms,” said Nina Reed, a commercial painter who lives in Providence. “I’ve seen employers force workers to come in on weekends unpaid, disappear after the employee worked for a week or withhold money from people’s checks for benefits which the worker never gets. We also know that almost a third of workers in the finishing trades are misclassified as contractors and ripped off by bad bosses who steal their wages and force them to pay taxes for them.”

The precise impact of wage theft is hard to measure. The Economic Policy Institute (EPI) found that about $1 billion in stolen wages is recovered by authorities nationwide each year. The total cost of robberies, by contrast, is less than half of that. Given that the majority of wage theft is unreported, the EPI estimates that the true cost could be as high as $50 billion withheld from working class families each year.

But while larceny of more than $1,500 in Rhode Island is a felony, wage theft had previously been a misdemeanor, regardless of the amount stolen.

The law (2023-S 1079Aaa, 2023-H 5902Aaa) makes knowingly and willfully committing wage theft of more than $1,500 a felony, punishable by fines and incarceration. For willful wage theft of over $10,000, the penalty could be up to ten years in prison. It also increases penalties for employers in the construction industry who knowingly misclassify workers as independent contractors. These penalties would not apply to employers who make payroll errors in good faith.

“This bill will help thousands of hard-working Rhode Islanders by ensuring disreputable employers are held accountable,” said Justin Kelley, business representative of Rhode Island Painters and Allied Trades. “We thank Chairman Craven and Senator Kallman for standing up for the hardworking people who build our state and keep our economy going.”

For more information, contact:
Fil Eden, Publicist
State House Room 20
Providence, RI 02903