Wage Theft Prevention and Wage Recovery Act of 2022

To amend the Fair Labor Standards Act of 1938 and the Portal-to-Portal Act of 1947 to prevent wage theft and assist in the recovery of stolen wages, to authorize the Secretary of Labor to administer grants to prevent wage and hour violations, and for other purposes. 1. Short title This Act may be cited as the Wage Theft Prevention and Wage Recovery Act of 2022 I Amendments to the Fair Labor Standards Act of 1938 101. Requirements to provide certain disclosures, regular paystubs, and final payments The Fair Labor Standards Act of 1938 is amended by inserting after section 4 ( 29 U.S.C. 204 5. Requirements to provide certain disclosures, regular paystubs, and final payments (a) Disclosures (1) Initial disclosures Not later than 15 days after the date on which an employer hires an employee who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, the employer of such employee shall provide such employee with an initial disclosure containing the information described in paragraph (3). Such initial disclosure shall be— (A) provided as a written statement or, if the employee so chooses, as a digital document provided through electronic communication; and (B) made available in the employee’s primary language. (2) Modification disclosures Not later than the earlier of 5 days after the date on which any of the information described in paragraph (3) changes with respect to an employee described in paragraph (1) or the date of the next paystub following the date on which such information changes, the employer of such employee shall provide the employee with a modification disclosure containing all the information described in paragraph (3). (3) Information The information described in this paragraph shall include— (A) the rate of pay and whether the employee is paid by the hour, shift, day, week, or job, or by salary, piece rate, commission, or other form of compensation; (B) (i) an indication of whether the employee is being classified by the employer as an employee subject to the minimum wage requirements of section 6 or as an employee that is exempt from (or otherwise not subject to) such requirements as provided under section 3(m)(2), 6, 13, or 14, as well as the reason for the exemption; and (ii) in the case that such employee is not classified as being an employee subject to such minimum wage requirements, an identification of the section described in clause (i) providing for such classification; (C) (i) an indication of whether the employee is being classified by the employer as an employee subject to the overtime compensation requirements of section 7 or as an employee exempt from such requirements as provided under section 7 or 13; and (ii) in the case that such employee is not classified as being an employee subject to such overtime compensation requirements, an identification of the section described in clause (i) providing for such classification; (D) the name of the employer and any other name used by the employer to conduct business; and (E) the physical address of and telephone number for the employer’s main office or principal place of business, and a mailing address for such office or place of business if the mailing address is different than the physical address. (b) Paystubs (1) In general Every employer shall provide each employee of such employer who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, a paystub that corresponds to work performed by the employee during the applicable pay period and contains the information required under paragraph (3) in any form provided under paragraph (2). (2) Forms A paystub required under this subsection shall be a written statement and may be provided in any of the following forms: (A) As a separate document accompanying any payment to an employee for work performed during the applicable pay period. (B) In the case of an employee who receives paychecks from the employer, as a detachable statement accompanying each paycheck. (C) As a digital document provided through electronic communication, subject to the employee affirmatively consenting to receive the paystubs in this form. (3) Contents Each paystub shall contain all of the following information: (A) The name of the employee. (B) Except in the case of an employee who is exclusively paid a salary and is exempt from the overtime requirements of section 7, the total number of hours worked by the employee, including the number of hours worked per workweek, during the applicable pay period. (C) The total gross and net wages paid, and, except in the case of an employee who is exclusively paid a salary and is exempt from the overtime requirements of section 7, the rate of pay for each hour worked during the applicable pay period. (D) In the case of an employee who is paid any salary, the amount of any salary paid during the applicable pay period. (E) In the case of an employee employed at piece rates, the number of piece rate units earned, the applicable piece rates, and the total amount paid to the employee per workweek for the applicable pay period in accordance with such piece rates. (F) The rate of pay per workweek of the employee during the applicable pay period and an explanation of the basis for such rate. (G) The number of overtime hours per workweek worked by the employee during the applicable pay period and the compensation required under section 7 that is provided to the employee for such hours. (H) Any additional compensation provided to the employee during the applicable pay period, with an explanation of each type of compensation, including any allowances or reimbursements such as amounts related to meals, clothing, lodging, or any other item. (I) Itemized deductions from the gross income of the employee during the applicable pay period, and an explanation for each deduction. (J) The date that is the beginning of the applicable pay period and the date that is the end of such applicable pay period. (K) The name of the employer and any other name used by the employer to conduct business. (L) The name and phone number of a representative of the employer for contact purposes. (M) Any additional information that the Secretary reasonably requires to be included through notice and comment rulemaking. (c) Model disclosures and pay stub The Secretary shall prescribe model disclosures and a model pay stub that may be used to satisfy the requirements of subsections (a) and (b), respectively. The Secretary shall make the model disclosures and the model pay stub publicly available to employers. (d) Final payments (1) In general Not later than 14 days after an individual described in paragraph (4) terminates employment with an employer (by action of the employer or the individual), or on the date on which such employer pays other employees for the pay period during which the individual so terminates such employment, whichever date is earlier, the employer shall provide the individual with a final payment, which includes all compensation due to such individual for all time worked and benefits incurred (including retirement, health, leave, fringe, and other benefits) by the individual as an employee for the employer. (2) Continuing wages An employer who violates the requirement under paragraph (1) shall, for each day, not to exceed 30 days, of such violation provide the individual described in paragraph (4) with compensation at a rate that is equal to the regular rate of compensation, as determined under this Act, to which such individual was entitled when such individual was an employee of such employer. (3) Limitation Notwithstanding paragraphs (1) and (2), an individual described in paragraph (4) shall not be entitled to the compensation described under paragraph (2) if the employer successfully demonstrates that— (A) the employer made a good-faith effort to provide the final payment described in paragraph (1); and (B) the individual refused or otherwise intentionally avoided receiving such final payment. (4) Individual An individual described in this paragraph is an individual who was employed by the employer, and through such employment, in any workweek, was engaged in commerce or in the production of goods for commerce, or was employed in an enterprise engaged in commerce or in the production of goods for commerce. . 102. Right to full compensation (a) In general The Fair Labor Standards Act of 1938 is amended by inserting after section 7 ( 29 U.S.C. 207 8. Right to full compensation (a) In general In the case of an employment contract or other employment agreement, including a collective bargaining agreement, that specifies that an employer shall compensate an employee (who is described in subsection (b)) at a rate that is higher than the rate otherwise required under this Act, the employer shall compensate such employee at the rate specified in such contract or other employment agreement. (b) Employee engaged in commerce The requirement under subsection (a) shall apply with respect to any employee who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce. . (b) Conforming amendment The Fair Labor Standards Act of 1938 is amended by repealing section 10 ( 29 U.S.C. 210 103. Civil and criminal enforcement (a) Prohibited acts Section 15(a) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 215(a) (1) in paragraph (1), by striking section 6 or section 7 section 6, 7, or 8 (2) in paragraph (2), by striking section 6 or section 7 section 5, 6, 7, or 8 (b) Damages The Fair Labor Standards Act of 1938 ( 29 U.S.C. 201 et seq. (1) in section 4(f) ( 29 U.S.C. 204(f) for unpaid minimum wages, or unpaid overtime compensation, and liquidated damages for unpaid wages, or unpaid overtime compensation, as well as interest and liquidated damages, (2) in section 6(d)(3) ( 29 U.S.C. 206(d)(3) minimum (3) in section 16 ( 29 U.S.C. 216 (A) in subsection (b)— (i) by striking section 6 or section 7 section 6, 7, or 8 (ii) by striking minimum (iii) in the first sentence, by striking and in an additional equal amount as liquidated damages the amount of any interest on such unpaid wages or unpaid overtime compensation accrued at the prevailing rate, and an additional amount as liquidated damages that is equal to (subject to the second sentence of this subsection) 2 times such amount of unpaid wages or unpaid overtime compensation (iv) in the second sentence, by striking wages lost and an additional equal amount as liquidated damages wages lost, including any unpaid wages or any unpaid overtime compensation, the amount of any interest on such wages lost accrued at the prevailing rate, and an additional amount as liquidated damages that is equal to 3 times the amount of such wages lost (v) by striking the fifth sentence; and (vi) by adding at the end the following: Notwithstanding chapter 1 Federal Arbitration Act (B) in subsection (c)— (i) by striking minimum (ii) in the first sentence— (I) by striking section 6 or 7 section 6, 7, or 8 (II) by striking and an additional equal amount as liquidated damages , any interest on such unpaid wages or unpaid overtime compensation accrued at the prevailing rate, and an additional amount as liquidated damages that is equal to (subject to the third sentence of this subsection) 2 times such amount of unpaid wages or unpaid overtime compensation (iii) in the second sentence, by striking and an equal amount as liquidated damages. , any interest on such unpaid wages or unpaid overtime compensation accrued at the prevailing rate, and an additional amount as liquidated damages that is equal to (subject to the third sentence of this subsection) 2 times such amount of unpaid wages or unpaid overtime compensation. In the event that the employer violates section 15(a)(3), the Secretary may bring an action in any court of competent jurisdiction to recover the amount of any wages lost, including any unpaid wages or any unpaid overtime compensation, any interest on such wages lost accrued at the prevailing rate, an additional amount as liquidated damages that is equal to 3 times the amount of such wages lost, and any such legal or equitable relief as may be appropriate. (iv) in the third sentence, by striking sections 6 and 7 section 6, 7, or 8 (4) in section 17 ( 29 U.S.C. 217 minimum (c) Civil fines Section 16(e) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 216(e) (1) by striking paragraph (2) and inserting the following: (2) (A) Subject to subparagraph (B), any person who violates section 6, 7, or 8, relating to wages, shall be subject to a civil fine that is not to exceed $22,030 per each employee affected for each initial violation of such section. (B) Any person who repeatedly or willfully violates section 6, 7, or 8, relating to wages, shall be subject to a civil fine that is not to exceed $110,150 per each employee affected for each such violation. (C) Any person who violates section 3(m)(2)(B) shall be subject to a civil penalty not to exceed $12,340 for each such violation, as the Secretary determines appropriate, in addition to being liable to the employee or employees affected for all tips unlawfully kept, any interest on wages lost accrued at the prevailing rate, and an additional amount as liquidated damages that is equal to 2 times the amount of wages lost, as described in subsection (b). ; (2) by redesignating paragraphs (3), (4), and (5) as paragraphs (5), (6), and (7), respectively; and (3) by inserting after paragraph (2) the following: (3) Any person who violates subsection (a) or (b) of section 5 shall— (A) for the initial violation of such subsection, be subject to a civil fine that is not to exceed $50 per each employee affected; and (B) for each repeated or willful violation of such subsection, be subject to a civil fine that is not to exceed $100 per each employee affected. (4) Any person who violates section 11(c) shall— (A) for the initial violation, be subject to a civil fine that is not to exceed $1,000 per each employee affected; and (B) for each repeated or willful violation, be subject to a civil fine that is not to exceed $5,000 per each employee affected. . (d) Criminal penalties Section 16(a) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 216(a) (1) by striking Any person (1) Any person (2) in the first sentence, by striking $10,000 $10,000 per each employee affected (3) in the second sentence, by striking No person Subject to paragraph (2), no person (4) by adding at the end the following: (2) (A) Notwithstanding any other provision of this Act, the Secretary shall refer any case involving a covered offender described in subparagraph (B) to the Department of Justice for prosecution. (B) A covered offender described in this subparagraph is a person who willfully violates any of the following: (i) Section 11(c) by falsifying any records described in such section. (ii) Section 6, 7, or 8, relating to wages. (iii) Section 15(a)(3). . 104. Recordkeeping (a) In general Section 11(c) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 211(c) In the event that an employee requests an inspection of the records described in this subsection that pertain to such employee from the employer, orally or in writing, the employer shall provide the employee with a copy of the records for a period of up to 5 years prior to such request being made. Not later than 21 days after an employee requests such an inspection, the employer shall comply with the request. (b) Rebuttable presumption Section 15 of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 215 (c) In the event that an employer violates section 11(c) and any regulations issued pursuant to such section, resulting in a lack of a complete record of an employee’s hours worked or wages owed, the employee’s production of credible evidence and testimony regarding the amount or extent of the work for which the employee was not compensated in compliance with the requirements under this Act shall be sufficient to create a rebuttable presumption that the employee’s records are accurate. Such presumption shall be rebutted only if the employer produces evidence of the precise amount or extent of work performed or evidence to show that the inference drawn from the employee’s evidence is not reasonable. . II Amendments to the Portal-to-Portal Act of 1947 201. Increasing and tolling statute of limitations Section 6 of the Portal-to-Portal Act of 1947 ( 29 U.S.C. 255 (1) in the matter preceding paragraph (a), by striking minimum (2) in paragraph (a)— (A) by striking may be commenced within two years may be commenced within 4 years (B) by striking unless commenced within two years unless commenced within 4 years (C) by striking may be commenced within three years may be commenced within 5 years (3) in paragraph (d), by striking the period and inserting ; and (4) by adding at the end the following: (e) with respect to the running of any statutory period of limitation described in this section, the running of such statutory period shall be deemed suspended during the period beginning on the date on which the Secretary of Labor notifies an employer of an initiation of an investigation or enforcement action and ending on the date on which the Secretary notifies the employer that the matter has been officially resolved by the Secretary. . III Wage theft prevention and wage recovery grant program 301. Definitions In this title: (1) Community partner The term community partner (A) State department of labor; (B) attorney general of a State, or other similar authorized official of a political subdivision thereof; (C) law enforcement agency; (D) consulate; (E) employee or advocate of employees, including a labor organization, community-based organization, faith-based organization, business association, or nonprofit legal aid organization; (F) academic institution that plans, coordinates, and implements programs and activities to prevent wage and hour violations and recover unpaid wages, damages, and penalties; or (G) any municipal agency responsible for the enforcement of local wage and hour laws. (2) Community partnership The term community partnership (A) a working group consisting of community partners; and (B) the Department of Labor. (3) Eligible entity The term eligible entity (A) A nonprofit organization, including such an organization that is a community-based organization, faith-based organization, or labor organization, that provides services and support to employees, including assisting such employees in recovering unpaid wages. (B) An employer. (C) A business association. (D) An institution of higher education, as defined by section 101(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1001(a) (E) A partnership between any of the entities described in subparagraphs (A) through (D). (4) Employ; employee; employer The terms employ employee employer 29 U.S.C. 203 (5) Secretary The term Secretary (6) Wage and hour law The term wage and hour law (7) Wage and hour violation The term wage and hour violation 302. Wage theft prevention and wage recovery grant program (a) In general The Secretary shall provide grants to eligible entities to assist amployees and employers. (b) Grants A grant provided under this section shall be designed to— (1) support an eligible entity in establishing and supporting the activities described in subsection (c)(1); and (2) develop community partnerships to expand and improve cooperative efforts to— (A) prevent and reduce wage and hour violations; (B) assist employees in recovering back pay for any such violations; and (C) assist employers in complying with wage and hour laws. (c) Use of funds The grants described in this section shall assist eligible entities in establishing and supporting activities that include— (1) disseminating information and conducting outreach and training to educate employees about their rights under wage and hour laws; (2) conducting educational and compliance training for employers about their obligations under wage and hour laws; (3) providing assistance to employees in filing claims of wage and hour violations; and (4) any other activities as the Secretary may reasonably prescribe through notice and comment rulemaking. (d) Term of grants Each grant made under this section shall be available for expenditure for a period that is not to exceed 3 years. (e) Applications (1) In general An eligible entity seeking a grant under this section shall submit an application for such grant to the Secretary in accordance with this subsection. (2) Partnerships In the case of an eligible entity that is a partnership described in section 301(4)(E), the eligible entity may submit a joint application that designates a single entity as the lead entity for purposes of receiving and disbursing funds. (3) Contents An application under this subsection shall include— (A) a description of a plan for the program that the eligible entity proposes to carry out with a grant under this section, including a long-term strategy and detailed implementation plan that reflects expected participation of, and partnership with, community partners; (B) information on the prevalence of wage and hour violations in each community or State the eligible entity proposes to serve; (C) information on any industry or geographic area targeted by the plan for such program; (D) information on the type of outreach and relationship building that will be conducted under such program; (E) information on the training and education that will be provided to employees and employers under such program; and (F) any additional information the Secretary deems relevant. (f) Selection (1) Competitive basis In accordance with this subsection, the Secretary shall, on a competitive basis, select grant recipients from among eligible entities that have submitted an application under subsection (e). (2) Priority In selecting grant recipients under paragraph (1), the Secretary shall give priority to eligible entities that— (A) serve employees or employers in any industry or geographic area that is most highly at risk for noncompliance with wage and hour violations, as identified by the Secretary; and (B) demonstrate past and ongoing work to prevent wage and hour violations or to recover unpaid wages. (g) Memoranda of understanding (1) In general Not later than 60 days after receiving notification of selection for a grant under this section, the grant recipient shall negotiate and finalize with the Secretary a memorandum of understanding that sets forth specific goals, objectives, strategies, and activities that will be carried out under the grant by such recipient through a community partnership. (2) Signatures A representative of the grant recipient (or, in the case of a grant recipient that is an eligible entity described in section 301(4)(E), a representative of each entity that composes the grant recipient) and the Secretary shall sign the memorandum of understanding under this subsection. (3) Revisions The memorandum of understanding under this subsection shall be reviewed and revised by the grant recipient and the Secretary each year for the duration of the grant. (h) Performance evaluations The Secretary shall develop guidelines for evaluating the activities of each program or project funded under this section. (i) Revocation or suspension of funding If the Secretary determines that a recipient of a grant under this section is not in compliance with the terms and requirements of the memorandum of understanding under subsection (g), the Secretary may revoke or suspend (in whole or in part) the funding of the grant. 303. Authorization of appropriations There is authorized to be appropriated $50,000,000 for fiscal year 2023 and for each subsequent fiscal year through fiscal year 2026, to remain available until expended, to carry out the grant program under section 302. IV Relation to other laws, regulations, and effective date 401. Relation to other laws (a) In general Section 18(a) of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 218(a) The requirements of section 5 shall not preempt or supercede any requirement under State or local law that an employer disclose the rate, frequency, or classification of pay at any time during an individual’s employ, or that an employer provide regular paystubs or earnings statements to employees, so long as such requirement is at least as comprehensive as the requirements described under such section. (b) Assistance to employers The Secretary of Labor shall provide such assistance to employers operating in more than one State as may be necessary to ensure compliance with the amendments made by this Act. 402. Regulations Not later than 18 months after the date of enactment of this Act, the Secretary of Labor shall promulgate such regulations as are necessary to carry out this Act and the amendments made by this Act. 403. Effective date The amendments made by titles I and II shall take effect on the date that is the earlier of— (1) the date that is 6 months after the date on which the final regulations are promulgated by the Secretary of Labor under section 401; or (2) the date that is 18 months after the date of enactment of this Act. October 7, 2022 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Summary: Wage Theft Prevention and Wage Recovery Act of 2022 This bill requires employers to make initial and modified disclosures to employees of the terms of their employment, provide such employees with regular paystubs, and make a final payment to an employee for uncompensated work hours within 14 days of the employee's termination. Employers must also allow employees access to wage records. An employer must compensate an employee at the rate specified in an employment contract, including a collective bargaining agreement, that specifies a rate of pay higher than the minimum wage rate. The bill makes all of such unpaid wages recoverable through civil enforcement. The bill establishes new and increased civil and criminal penalties for violations of overtime or minimum wage requirements, including referral to the Department of Justice for criminal prosecution of employers who engage in wage theft, falsification of wage records, or retaliation against employees. The Wage and Hour Division of the Department of Labor must provide grants to specified organizations, including nonprofits and educational institutions, to support efforts to prevent and reduce violations of wage and hour laws.