2023 -- H 5902 SUBSTITUTE A AS AMENDED
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
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A N A C T
RELATING TO LABOR AND LABOR RELATIONS -- PAYMENT OF WAGES
Introduced By: Representatives Craven, Caldwell, Bennett, and Morales
Date Introduced: March 01, 2023
Referred To: House Judiciary
(Attorney General)
It is enacted by the General Assembly as follows:
SECTION 1. Sections 28-14-1, 28-14-17, 28-14-19, and 28-14-19.1 of the General Laws 1
in Chapter 28-14 entitled "Payment of Wages" are hereby amended to read as follows: 2
28-14-1. Definitions. 3
Whenever used in this chapter, except where the context clearly indicates otherwise: 4
(1) “Construction industry” means the business of constructing, reconstructing, altering, 5
maintaining, moving, rehabilitating, repairing, renovating, or demolition of any building, structure, 6
or improvement to the excavation of or other development or improvement to land, highways, or 7
other real property. 8
(2) “Department” means the department of labor and training. 9
(1)(3) “Director” means the director of the department of labor and training or his or her 10
duly authorized representative. 11
(2)(4) “Employee” means any person suffered or permitted to work by an employer, except 12
that independent contractors or subcontractors shall not be considered employees. 13
(3)(5) “Employer” means any individual, firm, partnership, association, joint stock 14
company, trust, corporation, receiver, or other like officer appointed by a court of this state, and 15
any agent or officer of any of the previously mentioned classes, employing any person in this state. 16
(4)(6) “Wages” means all amounts at which the labor or service rendered is recompensed, 17
whether the amount is fixed or ascertained on a time, task, piece, commission basis, or other method 18
of calculating the amount. 19
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28-14-17. Penalty for violations. 1
(a) Except as otherwise provided for in this chapter, any Any employer who or that violates 2
or fails to comply with any of the provisions of this chapter shall be guilty of a misdemeanor, and 3
upon conviction of the misdemeanor, the employer shall be punished by a fine of not less than four 4
hundred dollars ($400) for each separate offense, or by imprisonment of up to one year, or by both 5
fine and imprisonment. Each day pay period of failure to pay wages due an employee at the time 6
specified in this chapter shall constitute a separate and distinct civil violation, separate and apart 7
from any criminal violation provided for in subsection (b) of this section violation. 8
(b) Any employer who knowingly and willfully violates §§ 28-14-2, 28-14-4, or 28-14-6 9
of this chapter shall be guilty of a felony if the actual value of the wages due to an employee exceeds 10
one thousand five hundred dollars ($1,500), and upon a plea or conviction thereof, shall be deemed 11
to have committed a felony and shall be imprisoned by a term not exceeding three (3) years, or by 12
a fine not exceeding five thousand dollars ($5,000), or both. In calculating the value of wages due 13
to an employee, the total amount of all wages due the employee, in U.S. dollars, shall be included 14
in the calculation. 15
(b)(c) Any employer found guilty of violations of this chapter who or that does not pay 16
wages and fines within thirty (30) days of a final decision and after notification by the department 17
of labor and training, may have the employer’s business license revoked by the state of Rhode 18
Island until the employer pays such wages and fines in full or enters into a payment agreement with 19
which the employer stays in compliance. 20
28-14-19. Enforcement powers and duties of director of labor and training. 21
(a) It shall be the duty of the director to ensure compliance with the provisions of this 22
chapter and chapter 12 of this title. The director, or his or her designee, may investigate any 23
violations thereof, institute or cause to be instituted actions for the collection of wages, and institute 24
action for penalties or other relief as provided for within and pursuant to those chapters. The 25
director, or his or her authorized representatives, are empowered to hold hearings and he or she 26
shall cooperate with any employee in the enforcement of a claim against his or her employer in any 27
case whenever, in his or her opinion, the claim is just and valid. 28
(b) Upon receipt of a complaint or conducting an inspection under applicable law, the 29
director, or his or her appropriate departmental designee, is authorized to investigate to determine 30
compliance with this chapter and chapter 12 of this title. The director or designee shall forward all 31
complaints to the investigatory team within the department of labor and training who shall conduct 32
the initial screening, investigation, and field audits, as set forth in § 28-14-19.1. 33
(c) With respect to all complaints deemed just and valid by the investigatory team, the 34
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director, or his or her designee, shall order a hearing thereon at a time and place to be specified, 1
and shall give notice thereof, together with a copy of the complaint or the purpose thereof, or a 2
statement of the facts disclosed upon investigation, which notice shall be served personally or by 3
mail on any person, business, corporation, or entity of any kind affected thereby. The hearing shall 4
be scheduled within thirty (30) days of service of a formal complaint as provided herein. The 5
person, business, corporation, or entity shall have an opportunity to be heard in respect to the 6
matters complained of at the time and place specified in the notice. The hearing shall be conducted 7
by the director or his or her designee. The hearing officer in the hearing shall be deemed to be 8
acting in a judicial capacity, and shall have the right to issue subpoenas, administer oaths, and 9
examine witnesses. The enforcement of a subpoena issued under this section shall be regulated by 10
Rhode Island civil practice law and rules. The hearing shall be expeditiously conducted and upon 11
such hearing the hearing officer shall determine the issues raised thereon and shall make a 12
determination and enter an order within thirty (30) days of the close of the hearing, and forthwith 13
serve a copy of the order, with a notice of the filing thereof, upon the parties to the proceeding, 14
personally or by mail. The order shall dismiss the complaint or direct payment of any wages and/or 15
benefits found to be due and/or award such other appropriate relief or penalties authorized under 16
this chapter and chapter 12 of this title, and the order may direct payment of reasonable attorney’s 17
fees and costs to the complaining party. Interest at the rate of twelve percent (12%) per annum shall 18
be awarded in the order from the date of the nonpayment to the date of payment. 19
(d) The order shall also require payment of a further sum as a civil penalty in an amount 20
up to two (2) times the total wages and/or benefits found to be due, exclusive of interest, which 21
shall be shared equally between the department and the aggrieved party. In determining the amount 22
of any penalty to impose, the director, or his or her designee, shall consider the size of the 23
employer’s business, the good faith of the employer, the gravity of the violation, the previous 24
violations, and whether or not the violation was an innocent mistake or willful. 25
(e) The director may institute any action to recover unpaid wages or other compensation or 26
obtain relief as provided under this section with or without the consent of the employee or 27
employees affected. 28
(f) No agreement between the employee and employer to work for less than the applicable 29
wage and/or benefit rate or to otherwise work under and/or conditions in violation of applicable 30
law is a defense to an action brought pursuant to this section. 31
(g) The director shall notify the contractors’ registration board of any order issued or any 32
determination hereunder that an employer has violated this chapter, chapter 12 of this title, or 33
chapter 13 of title 37. The director shall notify the tax administrator of any determination hereunder 34
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that may affect liability for an employer’s payment of wages and/or payroll taxes. 1
28-14-19.1. Misclassification of employees. 2
(a) The misclassification of a worker whether performing work as a natural person, 3
business, corporation, or entity of any kind, as an independent contractor when the worker should 4
be considered and paid as an employee shall be considered a violation of this chapter. 5
(b) In addition to any other relief to which any department or an aggrieved party may be 6
entitled for such a violation, the employer shall be liable for a civil penalty in an amount not less 7
than one thousand five hundred dollars ($1,500) and not greater than three thousand dollars 8
($3,000) for each misclassified employee for a first offense and up to five thousand dollars ($5,000) 9
for each misclassified employee for any subsequent offense, which shall be shared equally between 10
the department and the aggrieved party. 11
(b) Upon receipt by the department of a complaint alleging misclassification of a worker 12
pursuant this section, the department shall undertake an investigation using the factors consistent 13
with federal regulations found in the Fair Labor Standards Act. 14
(1) The department shall assign an investigatory team within the department to investigate 15
and screen all complaints for general analysis and validity. 16
(2) As part of their investigation, the department's investigatory team may conduct field 17
audits of businesses to ascertain validity of complaints. In conducting these audits, the department's 18
investigatory team may investigate exclusively or with the assistance of the task force as established 19
pursuant to chapter 156 of title 42. 20
(3)(i) The investigatory team shall make a determination as to whether it finds the 21
complaint to be just and valid, or not, and shall report those findings to the director or his/her 22
designee. In instances where the department's investigatory team deems a complaint is just and 23
valid, and so reports, the alleged civil violation shall be adjudicated pursuant to the provisions of § 24
28-14-19 and this section. 25
(ii) In addition, in the event the investigatory team determines that an employer has 26
misclassified an employee, the investigatory team shall report the matter to the director or designee 27
with a recommendation that the matter be referred to the department of the attorney general for 28
criminal prosecution. The investigatory team may include any specific, documented extenuating 29
circumstances that the investigatory team believes would mitigate against a criminal prosecution. 30
The director or designee shall review the investigatory team's findings and consider its 31
recommendations. The director or designee shall forward the matter to the department of the 32
attorney general along with the director's or designee's recommendations as to whether to prosecute 33
the matter criminally or not, along with any specific, documented extenuating circumstances that 34
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the director or designee believes would mitigate against a criminal prosecution. 1
(iii) (A) If the director or designee receives information indicating that any person has 2
violated this chapter, the director or designee may investigate the matter and issue an order to show 3
cause why the person should not be found in violation of this chapter. 4
(B) A person served with an order to show cause shall have a period of twenty (20) days 5
from the date the order is served to file an answer in writing. 6
(C) If the person fails to file a timely and adequate answer to the order to show cause, the 7
director or designee may, following notice and hearing, do any of the following: 8
(I) Petition a court of competent jurisdiction to issue a stop-work order as provided in this 9
section; or 10
(II) Immediately assess penalties as provided for in this section. 11
(D) If, subsequent to issuing an order to show cause under this section, the director or 12
designee finds probable cause that an employer has committed a criminal violation of this chapter, 13
the director or designee shall refer the matter to the department of the attorney general for 14
investigation or impose administrative penalties provided for under this section. 15
(E) A party that does not meet the definition of an "employer" in § 28-14-1, but which 16
party intentionally contracts with an employer knowing the employer intends to misclassify 17
employees in violation of this chapter, shall be subject to the same penalties, remedies or other 18
actions as the employer found to be in violation of this chapter. 19
(iv) Provided, the decision whether to prosecute a violation of this section as a criminal 20
matter shall be made by the attorney general. In making this decision, the attorney general shall 21
review and consider all recommendations and materials forwarded by the director or designee 22
pursuant to this section. 23
(c) In determining the amount of any penalty imposed under this section, the director, or 24
his or her designee, shall consider the size of the employer’s business; the good faith of the 25
employer; the gravity of the violation; the history of previous violations; and whether or not the 26
violation was an innocent mistake or willful. 27
(d) A civil violation of this section may be adjudicated under § 28-14-19 and consolidated 28
with any labor standards violation or under §§ 37-13-14.1 and 37-13-15 and consolidated with any 29
prevailing wage violation. 30
(e) A violation of this section may be brought or adjudicated by any division of the 31
department of labor and training. 32
(f) The department shall notify the contractors’ registration board and the tax administrator 33
of any violation of this section. 34
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(g) In addition to any other relief to which the department or an aggrieved party may be 1
entitled for such a violation, the employer shall be liable for a civil penalty in an amount not less 2
than one thousand five hundred dollars ($1,500) and not greater than three thousand dollars 3
($3,000) for each misclassified employee for a first offense and up to five thousand dollars ($5,000) 4
for each misclassified employee for any subsequent offense, which shall be shared equally between 5
the department and the aggrieved party. 6
(h) As it relates to the construction industry, all provisions of § 28-14-19.1 shall apply. 7
(i) Any employer who knowingly and willfully violates this section regarding 8
misclassification of an employee in the construction industry shall be subject to the following 9
penalties: 10
(1) Where the value does not exceed one thousand five hundred dollars ($1,500), upon a 11
plea or a conviction, shall be guilty of a misdemeanor and be subject to imprisonment for a term 12
not exceeding one year, or a fine of up to one thousand dollars ($1,000), or both; 13
(2)(i) Any employer who knowingly and willfully violates this section after having been 14
previously adjudicated for a violation either by plea or conviction of this section and where the 15
value exceeds one thousand five hundred dollars ($1,500) shall be guilty of a felony and sentenced 16
to a term of imprisonment not to exceed three (3) years, or a fine of not more than five thousand 17
dollars ($5,000) or both. 18
(j)(1) The director of the department of labor and training shall, on or before December 31, 19
2024, and annually thereafter on or before December 31, file a report (the "report") with the 20
governor, the speaker of the house, and the president of the senate. This report shall provide 21
information on the status, progress, and recommendations, if any, as well as the information and 22
data set forth in § 28-14-19.1(i)(2), regarding the legislative initiatives set forth in this chapter. 23
(2) The data included in the report required by this subsection of this section shall include, 24
but not be limited to, the following for the time period covered by the report: 25
(i) Number of complaints filed with the department for wage theft and misclassification of 26
employees ("complaints"); 27
(ii) Number of complaints found by the department to be actionable; 28
(iii) Number of complaints referred by the department to the department of the attorney 29
general; 30
(iv) Number of complaints that are handled administratively or civilly by the department 31
of labor and training, both the aggregate number and also disaggregated by the resolution or 32
outcome of those complaints, including those settled, dismissed for finding no violation, 33
adjudicated, and, if appealed, the results of those appeals, as well as the number of pending matters; 34
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and 1
(v) Of the complaints referred to the department of the attorney general, a disaggregation 2
of the complaints by resolution or outcome of those complaints, including those settled, dismissed 3
for finding no violation, adjudicated, and, if appealed, the results of those appeals, as well as the 4
number of pending matters. The department of the attorney general shall assist the department of 5
labor and training in obtaining this data. 6
(k) The attorney general shall, on or before December 31, 2024, and annually thereafter on 7
or before December 31, file a report (the "attorney general report") with the governor, the speaker 8
of the house, and the president of the senate. The data included in the attorney general report 9
required by this subsection of this section shall include, but not be limited to, the following for the 10
time period covered by the attorney general report: 11
(1) The number of complaints referred to the attorney general for wage theft and 12
misclassification of employees ("wage theft complaints"); 13
(2) The number of civil and criminal wage theft complaints filed by the attorney general 14
for and arising out of wage theft and misclassification of employees; 15
(3) A disaggregation of the wage theft complaints by resolution or outcome of those wage 16
theft complaints, including those handled by plea agreement, by conviction, by a finding of not 17
guilty, or other disposition; 18
(4) The number of such cases that are appealed, and the results of those appeals which have 19
reached disposition; 20
(5) The number of cases pending both before the trial court and on appeal; and 21
(6) Such other information, findings, and recommendations as the attorney general 22
determines to be appropriate to address the legislative initiatives set forth in this chapter. 23
SECTION 2. Section 42-156-4 of the General Laws in Chapter 42-156 entitled 24
"Underground Economy and Employee Misclassification Act" is hereby amended to read as 25
follows: 26
42-156-4. Duties and responsibilities. 27
(a) The Task Force shall coordinate joint efforts to combat the underground economy and 28
employee misclassification. The Task Force shall: 29
(a)(1) Foster voluntary compliance with the law by educating business owners and 30
employees about applicable requirements; 31
(b)(2) Protect the health, safety and benefit rights of workers; and 32
(c)(3) Restore competitive equality for law-abiding businesses.; and 33
(4) Identify industries and geographic areas where evidence shows workers are most likely 34
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to be mistakenly or deliberately misclassified or are victims of wage theft and engage in proactive 1
and particular efforts, including but not limited to pro-active enforcement strategies, to reach those 2
sectors where workers are least likely to report such violations. 3
(b) In addition to the duties and responsibilities set forth in subsection (a) of this section, 4
the task force, working with the department of labor and training, shall institute an information 5
campaign to educate the public, including but not limited to business owners, employers, and 6
employees, regarding the changes in state law regarding payment of wages and in particular the 7
new and enhanced civil and criminal penalties established in §§ 28-14-17, 28-14-19, and 28-14-8
19.1, which changes are set to be in effect January 1, 2024. 9
SECTION 3. Section 1 of this act shall take effect on January 1, 2024. The remaining 10
sections of this act shall take effect upon passage. 11
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO LABOR AND LABOR RELATIONS -- PAYMENT OF WAGES
***
This act would provide for misdemeanor and felony penalties as it relates to wage theft. 1
This act would also require the Department of Labor and Training to use the Fair Labor and 2
Standards Act as it relates to a determination of misclassification of employees. It would provide 3
for a stop work order as it relates to misclassification and would require annual reporting by the 4
Department of Attorney General and the Department of Labor and Training. As it relates to the 5
construction industry, it provides for enhanced criminal penalties and provides for a felony where 6
an employer has misclassified an employee. 7
Section 1 of this act would take effect on January 1, 2024. The remaining sections of this 8
act would take effect upon passage. 9
This act would take effect upon passage. 10
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