SWEAT: More to be Done for New York’s Workers

Elizabeth Koo April 27, 2017

Over the past few years, Empire Justice Center has been working hard to advocate for the Securing Wages Earned Against Theft (SWEAT) Bill [A.628 (Rosenthal)/S.579 (Peralta)] – legislation designed to fight against New York’s wage theft epidemic and to close loopholes in our state’s labor laws.

While Governor Cuomo included a wage theft provision in the Executive Budget and the Assembly included the SWEAT bill’s wage theft protections in their one house budget bill, they were not included in the final budget.  These provisions would have improved workers’ chances of recovering stolen wages and the State’s ability to collect revenue and payroll taxes associated with wage theft.  We were disappointed that SWEAT and its provisions to improve wage theft enforcement mechanisms were not included in the final enacted budget, but we remain very appreciative of the efforts behind getting it included in the budget discussions.

New York’s Wage Theft Epidemic

Across the state, employers regularly commit wage theft and pay workers less than the law requires by not paying minimum wages, overtime pay, prevailing wages or wages for all hours worked.  Despite existing labor laws, workers often cannot collect the wages that are stolen from them.  Even when workers successfully take their employers to court or to the Department of Labor, employers are frequently able to avoid paying what they owe by closing their businesses or transferring money and property to others.  More than $125 million in court judgments and Department of Labor decisions have not been collected in New York. [1]  The US Department of Labor estimates that more than $1 billion in wage theft occurs annually in New York State. [2]

An All Too Common Wage Theft Case

For example, a group of restaurant workers thought they had found redress for thousands of hours of unpaid work when the New York State Department of Labor found the owner owed $1 million in unpaid wages and fines.  Shortly after the finding, the owner closed the doors of the restaurant and, six years later, neither the Department of Labor nor the workers have been able to collect a single cent of the money they are owed.

How SWEAT Helps End the Wage Theft Epidemic

The SWEAT bill creates tools for employees and the State, giving them a better chance to collect the money they are owed from wage theft violators after a court or the Department of Labor judges in their favor by:

  • Expanding New York’s mechanic’s lien law to allow all workers the right to put a temporary lien on an employer’s property when they have not been paid for their work;
  • Adopting Connecticut’s attachment standard to allow workers with wage theft claims to temporarily hold an employer’s assets during litigation, under the supervision of a judge, if the workers show a likelihood of success on their claims; and
  • Amending the New York Business Corporation Law and Limited Liability Company Law to help workers collect wage theft judgments from the principal owners of privately held corporations.

When businesses that commit wage theft are brought to court they often exploit the months or years it takes to get a judgment and use that time to transfer money from their bank accounts, hide property and assets in the names of family members, close down businesses only to open again under a new name, create sham corporations to evade liability, and/or leave the country with their property.  As a result, by the time a judgment for stolen wages is won, the money is long gone.  SWEAT helps level the playing field for employees so that money is available to pay the judgement – wages workers have earned – after they prevail in a court case or a Department of Labor investigation.

Moving Forward

Empire Justice Center and the SWEAT coalition, consisting of over 70 groups representing workers, businesses, unions, anti-poverty groups and faith-based groups, will continue to work with bill sponsors Assembly Member Linda Rosenthal and Senator Jose Peralta, the Legislature and Governor Cuomo to make sure legislation with wage theft enforcement mechanisms is passed before the end of the legislative session.  There is urgency here.  Without passage, workers who suffer from wage theft will continue to be deprived of their hard-earned pay, honest businesses will be forced to compete against scofflaw business competitors, and the State will continue to be cheated out of millions of dollars in potential revenue and payroll taxes.  The SWEAT bill must pass to ensure justice and fairness for workers, law-abiding businesses, New York taxpayers and the State. 

Please join us in our efforts to pass the SWEAT Bill

Contact Elizabeth Koo at 585-295-5728 or ekoo@empirejustice.org for information on how to join the coalition and support the SWEAT Bill’s passage.

End Notes:
 [1] “Empty Judgments” A report prepared by the Securing Wages Earned Against Theft (SWEAT) Coalition, available at https://cdp.urbanjustice.org/cdp-reports/emptyjudgements.
 [2] “The Social and Economic Effects of Wage Violations,” Prepared for U.S. Department of Labor by Eastern Research Group (Dec. 2014), available at http://www.dol.gov/asp/evaluation/completed-studies/wageviolationsreportdecember2014.pdf.