March 3, 2015

DC Nonprofits Subject to New Notice Requirement and Bigger Penalties under New Wage Theft Prevention Act

10 min

UPDATE 3/3/15: The Mayor has now Issued the Sample Notice Template as Required by the DC Wage Theft Prevention Act of 2014

The sample notice is now available on the D.C. Department of Employment Services' ("DOES") website.

Effective immediately, the notice must be provided to all new employees when they are hired. Additionally, employers are required to provide the notice to all current employees by May 27, 2015 (90 days from the Act's effective date).

Currently the notice is only available in English and Spanish. Additional translations can be requested by calling DOES at (202) 671-1880.

UPDATE 2/4/15: Additional Changes to the D.C. Wage Theft Prevention Act

February 3, 2015 Emergency Amendment

On February 3, 2015, the Washington, D.C. Council passed an emergency amendment (and sent an identical temporary amendment to Congress for congressional review) that further amends the D.C. Wage Theft Prevention Amendment Act of 2014 (“Wage Theft Act” or “Act”). Introduced by the council chairman, this amendment makes the following changes to the pending law:

  • Employers now must keep time records for certain exempt employees (i.e., seamen, railroad employees, car salesmen, parking lot and parking garage attendants, and airport employees who voluntarily switch shifts with other employees). Previously, neither the Minimum Wage Revision Act nor the Wage Theft Act required employers to keep time records for any exempt employees. 
  • The D.C. mayor’s office must provide sample notices in languages in addition to English. Employers must provide notices to employees in other languages only if the mayor's office provides a sample notice in that language and (1) the employer knows the second language is the employee's primary language, or (2) the employee requests a notice in a different language. 
  • As before, the Wage Payment and Wage Collection Act will not require employers to pay any exempt employees twice a month; once a month is sufficient. Prior to this most recent emergency amendment, the Wage Theft Act only excluded exempt employees from the twice-a-month requirement if the employer had a custom of doing so or if the employee’s contract permitted.

December 2, 2014 Emergency Amendment

Previously, on December 2, 2014, the D.C. Council passed an emergency amendment (and sent a temporary amendment to Congress for congressional review) to the Wage Theft Act making the following changes that survive the February 3, 2015 emergency amendment:

  • Repealing the applicability of the Wage Theft Act to violations occurring as of October 1, 2014. This means employers will only be held liable for violations of the Wage Theft Act after the Act’s enactment.
  • Exempting employers from joint and several liability for violations by their subcontractors or temporary staffing firms if a contract exempting them from joint liability is already in place when the law goes into effect.
  • Clarifying that civil actions under the Act may only be brought by employees (e.g., not by a labor union or other entity).
  • Amending the Act to state that an employer cannot be held liable for compliance with the new notice requirements until after the mayor’s office has issued a sample notice.

Outstanding Issues

The emergency amendments passed thus far fail to address a number of outstanding issues. Although employers are not required to issue notices to employees until the mayor issues a sample notice, it is unclear how much time employers will have following issuance of that sample to provide notices to their employees. The original structure of the Wage Theft Act suggests that employers would have 30 days to comply after the mayor issues a sample notice, but the emergency amendments leave this unclear. Also left unaddressed is a question of whether an employer is permitted to issue notice to an employee by electronic mail, and whether an electronic signature confirming an employee’s receipt of that notice will be sufficient to satisfy the law.

Coming Up . . .

Under D.C. law, the emergency amendment goes into effect immediately upon passage by the council and signature by the mayor, and expires in 90 days. The temporary act is sent to the mayor for signature and then sent to the U.S. Congress, where it becomes effective following a 30-day congressional review period. Once effective, the D.C. Council has 225 days to pass a permanent amendment. Therefore, in the next few weeks the council likely will introduce a final amendment to the Wage Theft Act that will incorporate the changes made in both emergency amendments, and could potentially address any additional outstanding issues. We intend to remain involved in this process and will keep you advised.

UPDATE 1/15/15: On December 2, 2014, the D.C. Council passed an emergency amendment to the D.C. Wage Theft Prevention Amendment Act of 2014. Mayor Gray signed the amendment on December 29, 2014, and the newly amended Wage Theft Prevention Act was re-transmitted to Congress on January 13, 2015. As a result, the 30-day congressional review period re-started and the Act’s effective date has been delayed. The D.C. Council’s legislative tracker is now currently estimating that the new law will take effect on February 26, 2015. This delay is good news for employers, as it will permit additional time to address compliance issues and to prepare for the law’s new notice requirements. As of this date, the Mayor’s office has not yet provided a template for the Act’s new notice requirements, but is required to do so within 60 days of the law’s effective date.

UPDATE 12/11/14: As anticipated below, the D.C. Council has passed an emergency amendment to the D.C. Wage Theft Prevention Amendment Act of 2014. The emergency amendment, posted to the Council's Legislative Information Management System on December 9, 2014, limits fines as follows:

  • For negligent violations, up to $2,500 for a first offense, and $5,000 for each subsequent offense per affected employee. 
  • For willful violations, up to $5,000 and/or imprisonment of up to 30 days for a first offense, and up to $10,000 and/or imprisonment up to 90 days for subsequent offenses.

The emergency amendment also fixes a problem with the original Act, which creates joint and several liability of general contractors for violations by their subcontractors, and of temporary staffing firms and their clients. Specifically, the emergency amendment exempts from this joint and several liability mandate any such contract that already exists when the Act takes effect if the contract provides otherwise. The emergency act also clarifies that civil actions under the Act may be brought only by employees (e.g., not by a labor union or other entity).

As Washington, DC-based nonprofits and those with employees in DC prepare to ring out the old year, unfortunately they must prepare to ring in a new year that will bring with it the last thing any employer needs: a new employment form to fill out for every employee.

On September 19, 2014, District of Columbia Mayor Vincent Gray signed into law the Wage Theft Prevention Amendment Act of 2014 (the "Act"). In addition to requiring a new notice to every employee, the Act amends several existing DC wage payment laws (the Accrued Sick and Safe Leave Act, the Living Wage Act, the Minimum Wage Revisions Act, and the Wage Payment and Wage Collection Law) by increasing penalties under existing laws and clarifying administrative procedures and legal standards for adjudicating wage disputes under those laws. The new law likely will take effect early next year, as explained below.

The New Notice Requirement

The new law requires nonprofits with DC employees (and all DC employers) to provide a written notice to current and future employees that contains:

  • The name of the employer and any "doing business as" names used by the employer;
  • The physical address of the nonprofit's main office or principal place of business, as well as a mailing address, if different;
  • The telephone number of the employer;
  • The employee's rate of pay and the basis of that rate, including by the hour, shift, day, week, salary, piece, and/or commission;
  • Any allowances claimed as part of the minimum wage, including tip, meal, or lodging allowances;
  • Overtime rate of pay and exemptions from overtime pay;
  • The living wage and exemptions from the living wage;
  • The applicable prevailing wages; and
  • The employee's regular payday designated by the employer.

Getting the contents right is necessary but not sufficient. The notice must be both in English and in an employee's primary language if it is other than English. Employers must provide the notice to current employees within 90 days of the Act's enactment, and to new employees when hired. An updated notice is required when any of the notice items change (e.g., the employee receives a raise, or the employer's business address changes). The Act requires the mayor to provide employers with a sample template of the required notice within 60 days of the effective date of the Act, but it is unclear whether non-English sample notices also will be provided.

Records Requirement

The Act increases penalties for failing to maintain proper records of employee work hours and compensation. Employers must retain signed and dated copies of the newly required written notices as proof of the employee's acknowledgment of receipt of the notice. Failure to comply could result in a $500 penalty for each failure to maintain payroll records or to provide employees with an itemized wage statement or written notice.


The Act strengthens anti-retaliation protections for employees who report violations, initiate a proceeding, provide information, or testify under the Act. The new law also strengthens the anti-retaliation provisions of the Living Wage Act (which requires overtime compensation as well as a minimum wage). The new anti-retaliation provision permits an employee to sue an employer in court or in an administrative proceeding. Penalties include:

  • Civil penalties from $1,000 to $10,000;
  • Liquidated damages in an amount equal to the civil penalties;
  • Front pay, lost compensation, costs, and reasonable attorney fees;
  • Reinstatement of the employee; and
  • Other forms of equitable relief.

New Penalties

Like all DC employers, nonprofits will be subject to a number of new penalties for violations under the Act. They include:

  • Liquidated damages equal to treble the amount of unpaid wages for violations of the Wage Payment Act;
  • Denial of a business license for 3 years for willful violations and suspension of a business license for failure to comply with administrative orders or conciliation agreements within 30 days of issuance;
  • Expanded fines up to $10,000 or imprisonment up to 6 months for employers who negligently commit violations of the Minimum Wage Act (previously, only employers who acted willfully were subject to such penalties); and
  • Misdemeanor liability and fines for employers who negligently fail to comply with this Act or the Living Wage Act.

Upon signing the legislation, Mayor Gray wrote to the DC City Council to express concern that, among other things, it could potentially make employers liable for "unlimited penalties" for a willful violation. The mayor also noted that the DC City Council has promised to work with the mayor on amendments to address his concerns before it takes effect.

What Should Employers Do?

Given the detailed and technical changes made to the DC laws covered by this new legislation, employers must carefully evaluate the new requirements of the Act to ensure compliance and avoid penalties. To prepare, employers should:

  • Gather the required information and draft the notices now, particularly if an employer must draft notices in languages in addition to English;
  • Revise record-keeping procedures and correct all employee records as of October 1, 2014;
  • Review all pay policies, procedures, and practices to ensure they comply with DC law;
  • Update retaliation policies, if necessary; and
  • Train appropriate personnel as to all of the foregoing.

When Does the New Law Take Effect?

The new law becomes effective following a 30-day congressional review period. The 30-day review period counts only days in which Congress is actually in session (i.e., not weekends, holidays, or other days during which Congress does not convene). The Act was published in the District of Columbia Register on October 3, 2014, and was submitted to Congress on November 21, 2014. The DC Council's legislative tracker currently estimates the law will take effect on January 14, 2015.

Nonprofits with employees in DC should not wait for the law to become effective to take action to correct any potential problems, because the new law will apply to all violations occurring after October 1, 2014.

One final word: If the notice requirement of the DC Wage Theft Prevention Amendment Act seems cumbersome, take heart – maybe. In 2010, New York passed a similar wage theft law, with a notice requirement and increased penalties. On June 19, 2014, the New York State Assembly and Senate voted to eliminate the notice requirement, which State Assembly Speaker Sheldon Silver called "a very cumbersome burden to businesses operating around the state." However, the legislation removing the notice requirement has not yet been signed by Governor Cuomo.