Sen. Kallman wage theft bill
passes Senate

STATE HOUSE – The Senate today passed a bill by Sen. Meghan Kallman to toughen penalties for wage theft, the most prevalent and costly form of theft in the United States.

“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 are getting away with it. And they’re undercutting all the responsible employers who are doing right by their employees. This needs to change.”

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.

“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 is currently a misdemeanor, regardless of the amount stolen.

The bill (2023-S 1079aa) would make 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. These penalties would not apply to employers who make payroll errors in good faith.

“The only reason you’d be against this bill is if you’re intentionally stealing from your workers, or if you've hired a contractor you know is stealing from their workers and forcing them into the underground economy,” said Justin Kelley, business representative of Rhode Island Painters and Allied Trades. “We thank Senator Kallman and Senate President Ruggerio for standing up for the hardworking people who build our state and keep our economy going.”

The bill now heads to the House, where Rep. Robert E. Craven (D-Dist. 32, North Kingstown) is sponsoring similar legislation (2023-H 5902).

“Rhode Island is full of honest employers and construction workers building the housing, clean energy and infrastructure we so desperately need,” said Senator Kallman. “This bill is about saying ‘thank you for your work and we have your back.’ I’m hopeful we can get it enacted this year.”