To combat pervasive wage theft in New York and to deter employers from underpaying their workers, three new bills were introduced in the legislature today that would punish violators by making it difficult for them to conduct business in the state.
The legislation, sponsored by Senate Labor Chair Jessica Ramos and Assemblymembers Kenny Burgos, Harvey Epstein, and Linda Rosenthal, would bolster the power of state agencies to crack down on wage theft by stripping violators of their licenses to operate, liquor licenses, as well as issuing stop work orders against them.
The legislation was prompted by reports of rampant wage theft in the state, including a series of stories published by Documented and ProPublica that revealed that more than 127,000 New Yorkers have been victims of wage theft during a recent five-year period but that the New York State Department of Labor was unable to recover $79 million in back wages owed to them. Among the reasons for the agency’s low recovery rate: understaffing and poor tools for recovering wages and enforcing judgments.
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“We knew from our conversations with labor and from our constituent service caseload that wage theft is a chronic problem,” said Senator Ramos. “We did not have the data to understand the scale of the issue in New York State until the ProPublica and Documented series came out last year. Having this reporting as a tool set us up to put this package together and focused our attention on the Department’s capacity.”
The proposed legislation — dubbed the Wage Theft Deterrence Package — includes three bills. The first (S8451) would empower the State Liquor Authority to suspend liquor licenses for bars and restaurants that the Department of Labor has determined owe their workers more than $1,000. This approach has been successful in other parts of the country, including Santa Clara County in California, which has recovered $110,000 for workers since 2019. According to Documented and ProPublica’s analysis, more than $52 million has been stolen from people working in restaurants in New York, more than in any other industry and accounting for more than 25% of all reported wage theft in the state.
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The second bill (S8452) would enable the Department of Labor to place a stop work order on any business that has a wage theft claim of at least $1,000. That approach has been effective in other states, such as New Jersey, which shut down 27 Boston Market restaurants and eventually recovered more than $630,000 in back wages for 314 workers.
The third bill (S8453) allows the Tax Department to suspend a business’s Certificate of Authority — which allows it to collect sales tax and conduct business — in cases where wage theft exceeds $1,000.
The three bills include a provision that allows employers to avoid these punishments if they resolve the wage theft claims within 15 days.
“Each year, more than $1 billion is stolen from the pockets of hardworking New Yorkers by unscrupulous employers, often targeting the workers with the fewest resources to fight back,” said Assemblymember Rosenthal. “If businesses refuse to do the right thing and pay their workers what they are owed, New York State should hold them to account.” The bills were praised by worker advocates and urban studies academics, including James Parrott at The New School’s Center for New York City Affairs, who said “These bills are needed to put more teeth into New York’s enforcement efforts. We owe it to hard-working low-wage workers and law-abiding employers.”
