D.C. Wage Theft Prevention Amendment Act of 2014 Goes Into Effect

The D.C. Wage Theft Prevention Amendment Act of 2014, which became effective on February 26, 2015, introduced a broad range of important new provisions that affect all employers in the District and significantly increase employer obligations and liabilities.  The Act includes new compliance requirements and enforcement schemes, an anti-retaliation provision, and enhanced penalties for violations.  Among the Act’s key provisions:

New Compliance Requirements

Notice Requirements

The Act mandates that at the time of hiring, new hires must receive an itemized wage statement that includes:

• The employer’s name (and any "doing business as" names);
• The phone number and physical and mailing address of the employer’s main office;
• The employee’s rate of pay and the basis of the rate (including allowances and exemptions); and
• The employee’s regular payday.

Employers must provide the notice in English; if the employee’s primary language is not English, the employer may need to provide it in the employee’s primary language as well in accordance with D.C. language access requirements.  The notice must be signed and dated by the employee and employer, and employees must receive a new notice whenever any of the information in the original notice changes.¹  The mayor’s office has provided a sample template in both English and Spanish.

Recordkeeping Requirements

Previously, employers were required to keep records of "hours worked" by employees.  Under the new Act, employers must maintain records of "precise time worked" for nonexempt employees.  In the absence of regulations that define "precise," employers may wish to require that employees account for their start, finish, and break time by the minute. (e.g., 9:03 a.m.-12:05 p.m. and 12:35 p.m.-5:00 p.m.).

The new Act also amends recordkeeping requirements for the D.C. Accrued Sick and Safe Leave Act of 2008. In addition to maintaining records of "precise time worked" by each employee, employers must also record the amount of paid leave taken by each employee, whether exempt or non-exempt. These records must be kept for at least three years.

Posting Requirements

The Act maintains the requirement that employers post a copy or summary of the Act on their premises.  The notice is available on the Department of Employment Services website in English and Spanish.  

In addition to modifying employers’ obligations, the Act changes the consequences for employers who do not meet the new requirements. Failure to comply with various requirements of the Act could result in the tolling of the three-year statute of limitations typically applicable to wage claims (i.e., it does not begin to run) until the employer complies with the requirements.  This means that employees who file a claim for back wages are no longer required to do so within three years of the alleged wage violation.

Wage Payment Requirements

Except in a few limited circumstances, discharged employees (exempt and nonexempt) must receive their final paycheck on the next working day following their discharge, while employees who resign must receive their final paycheck on the next payday or within seven days.

Anti-Retaliation Provision

The Act creates strict new anti-retaliation provisions, protecting any person who has complained about violations of the Act or who otherwise "exercised rights," or who is participating (or "about to" participate) in a proceeding or investigation related to the Act.  Additionally, any employee who is discharged within 90 days of exercising his or her rights is presumed to have been the victim of retaliation.  The employer may rebut this presumption only through "clear and convincing" evidence.

New Enforcement Schemes for Employee Complaints

The Act sets out detailed administrative and judicial procedures for employee complaints.

Under the administrative enforcement scheme, employees may seek damages, penalties and other costs for violations of the Act by filing a complaint with the Mayor’s office. The decision may be appealed before an administrative law judge, with the burden on the employer to rebut the complaint with "compelling evidence." Judicial enforcement is also available:  employees may sue to recover unpaid wages, liquidated damages, and attorney fees.

Tougher Penalties for Violations

The Act provides for stiff penalties for employer violations of the Act’s new notice and recordkeeping requirements, as well as increased civil and criminal penalties for violations of other wage-and-hour laws.  These include:

• A $500 fine for each violation of the notice requirement for new employees.
• Criminal penalties of $2,500 to $10,000 per affected employee for employers that willfully or negligently violate the Wage Payment Act and Living Wage Act, along with possible jail terms of 30 to 90 days.
• Increased civil liability for violations of the Minimum Wage Act.
• Denial of business-license application to any employer who, during the previous three years, was found criminally, administratively, or civilly liable of a willful violation of the Minimum Wage Act, the Wage Payment Act, the Living Wage Act, or the Sick and Safe Leave Act.

Steps to Take Now

Employers who have not yet complied with the Act should immediately do the following:

• Establish procedures for issuing an itemized wage statement to existing employees and to new employees at the time of hiring, as well to any employees whose terms of employment change;
• Institute proper time-keeping methods to record the "precise time worked" each day by nonexempt employees;
• Make sure that your organization effectively justifies through documentation any planned adverse action against an employee who exercised his or her rights under the Wage Theft Prevention Act within 90 days of the action, to rebut any presumption of retaliation for a "protected activity"; and
• Review all pay policies and procedures and ensure they comply with D.C. law, including making sure the District’s final pay requirements are met with respect to both exempt and nonexempt employees; that exempt employees are paid at least monthly; and that all employees are properly classified as exempt or nonexempt.

For more information on the Act, please visit these links:

• Wage Theft Prevention Amendment Act of 2014 (text of statute)
• Wage Theft Prevention Correction and Clarification Emergency Amendment Act of 2014 (first emergency amendment legislation text)
• Wage Theft Prevention Clarification Emergency Amendment Act of 2015 (second emergency amendment legislation text)
• Summary of Key Provisions (Dickstein Shapiro LLP)

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1) When the Act became effective in February, existing employees were also required to receive the notice within 90 days (or by May 27, 2015).