Senate approves Leader McCaffrey’s legislation to
increase penalties for wage theft, employee misclassification
STATE HOUSE – The Senate on Thursday approved legislation sponsored by Majority Leader Michael J. McCaffrey (D-Dist. 29, Warwick) on behalf of Attorney General Peter F. Neronha to increase penalties for wage theft and employee misclassification.
The legislation (2022-S 2775) would make wage theft with a value of more than $1,500 a felony. Enhanced penalties would vary depending on the value of the stolen wages, with a minimum of up to three years in prison and up to $10,000 in fines and a maximum of up to 10 years in prison and twice the value of the wages.
Employee misclassification would also be made a felony, with enhanced penalties of up to three years in prison and up to $10,000 in fines for first offenses. For second and subsequent offenses, violators would face up to five years in prison and fines of up to $20,000.
The Senate approved similar legislation, also filed by Leader McCaffrey on behalf of the Attorney General, in 2021.
“Workers should receive the pay and benefits they deserve – and have earned – from the people who employ them,” said Senator McCaffrey. “Wage theft and employee misclassification are very real problems that affect workers, taxpayers and responsible business owners. Attorney General Neronha’s bill is an important step to more appropriately penalize, and hopefully deter, this behavior.”
Wage theft occurs when an employer fails to pay their employees legally or contractually promised wages. Misclassification occurs when a worker is performing a job as if they were an employee but are classified by the employer as an independent contractor. Employers often do this to avoid paying benefits, overtime, taxes, Social Security Insurance, Medicare, and workers’ compensation insurance.
“Consider this – if someone steals your laptop or jewelry and the value is over $1,500, that is a felony. But if they steal your hard-earned wages, no matter how much it is, it’s always a misdemeanor,” said Attorney General Peter F. Neronha. “This is an issue of fundamental fairness and I applaud the Senate for passing this bill that will work to correct the unfairness that currently exists for Rhode Island workers.”
The measure now moves to the House of Representatives, where similar legislation (2022-H 7677) has been introduced by Rep. Robert E. Craven Sr. (D-Dist. 32, North Kingstown) on behalf of the Attorney General.