The Legal Landscape Rapidly Changes for D.C. Employers

The D.C. Wage Theft Prevention Amendment Act of 2014 and Revisions to It

The D.C. Wage Theft Prevention Amendment Act of 2014, which is currently expected to become effective on February 26, 2015, following Congressional review, has already proven to be one of the most significant and controversial new laws affecting D.C. employers in recent memory. Fortunately, in response to urging by employer groups, on February 3, 2015, the D.C. Council took emergency action to scale back its most burdensome provisions.

The Amendment Act, in its original form, amended in a number of critical ways several of D.C.’s existing employment statutes, included the D.C. Wage Payment and Collection Act, the D.C. Minimum Wage Act, the D.C. Living Wage Act, and the D.C. Accrued Sick and Safe Leave Act. (Provisions of the Amendment Act which have been modified by the emergency action of the D.C. Council are in bold below.) In addition to adding provisions relating to enforcement procedures for those laws, the Amendment Act included provisions:

• Barring employers from paying employees the lower federal minimum wage during their first 90 days of work.
• Requiring that employers provide every employee, within 90 days of the Act’s effective date, a written notice containing the following information:
  • The name of the employer and any “doing business as” names used by the employer
  • The physical address of the employer’s main office or principal place of business, and a mailing address, if different
  • The telephone number of the employer
  • The employee’s rate of pay and the basis of that rate, including by the hour, shift, day, week, salary, piece, commission, any allowances claimed as part of the minimum wage, overtime rate of pay, exemptions from overtime pay, living wage, exemptions from the living wage, and the applicable prevailing wages
  • The employer’s regular paydays
  • Any other information the Mayor considers to be material and necessary

These notices are to be provided to employees in both English and in each employee’s primary language.

• Requiring that all employees be paid at least twice a month on designated paydays
• Requiring that all employees who have been discharged be paid all outstanding wages by the next day and all voluntarily departing employees be paid all outstanding wages within seven days or by the next regular payday, whichever is sooner
• Requiring that employers keep records for all employees of the “precise time worked each day and each workweek by each employee,” rather than (as formerly required) just “the hours worked each day and each workweek”

D.C. employers objected to several of the provisions as burdensome and unnecessary for the protection of employees. In particular, many employers—and many exempt employees—were concerned about the requirement that employers keep records of the “precise hours worked” for all employees, as this would require professional, executive and other exempt employees to keep daily timesheets recording start and stop times for their work throughout the day. While records of the length of meal and other breaks may be relevant for non-exempt employees in determining total wages and overtime payments due, such precise time-tracking for exempt employees would impose a burden with no countervailing benefit.

Fortunately, the D.C. Council recognized the unnecessary burden the Amendment Act had placed on employers and, at the Mayor’s request, passed on February 3, 2015, temporary legislation—both the Wage Theft Prevention Clarification Temporary Amendment Act of 2015 (Temporary Amendment Act) and the Wage Theft Prevention Clarification Emergency Amendment Act of 2015 (Emergency Amendment Act)—that modified key aspects of the Amendment Act:

• Employers will be required to record the “precise time worked each day and each workweek” only for non-exempt employees.
• Employers will be obligated to provide the mandatory written notices to employees in a second language other than English only if the Mayor has made available a sample template in that second language and either the employer knows that second language to be an employee’s primary language or the employee requests the notice in that language.
• The obligation to provide the mandatory notice with respect to employees placed by temporary staffing forms will apply to the temporary staffing firm, not the client employer.
• Employers will only be required to pay exempt employees at least once per month.

The substantive provisions of the Temporary Amendment Act and the Emergency Amendment Act parallel each other. Any non-emergency legislation in D.C. requires Congressional review, however. The Emergency Amendment Act will remain in effect for 90 days following its still-to-be-determined effective date, which allows time for Congressional review of the Temporary Amendment Act. Following Congressional review, the Temporary Amendment Act will remain in effect for 225 days, giving the D.C. Council time to draft, pass, and submit for Congressional review a permanent version of these bills. As of the date of publication of this Client Alert, Mayor Muriel Bowser has not yet signed these bills, but she expressed support for them prior to the D.C. Council’s February 3rd meeting.

Significantly, the emergency legislation not only lifts the timekeeping burden for exempt employees that the Amendment Act would have imposed, but also rescinds the already existing requirement that D.C. employers record the “hours worked” (but not the “precise time worked”) for all employees, whether exempt or non-exempt. The D.C. Minimum Wage Law had, even prior to enactment of the Amendment Act, already included a provision, in D.C. Code § 32-1008(a)(1)(D), that required employers to “make, keep, and preserve” for at least three years a record of “the hours worked each day and each workweek by each employee,” with no exclusion for salaried exempt employees. The Emergency and Temporary Amendment Acts replace the Subparagraph D provision with a requirement that employers record the “precise time worked … except for employees who are exempt from the minimum wage and overtime requirements.”

Except as modified by the Temporary and Emergency Amendment Acts, the other provisions of the Amendment Act will become law—absent Congressional action—on February 26, 2015, and employers should take immediate steps to ensure timely compliance with the new requirements. For some employers, this may entail updating their current timekeeping rules and procedures so that their non-exempt employees can clock in and out when they start and stop work throughout the day.

The Wage Transparency Act of 2014

Under the Wage Transparency Act of 2014, employers may not (1) prohibit employees from inquiring about, discussing, comparing, or otherwise discussing their wages or the wages of another employee, (2) discharge, disciple, interfere with, or otherwise retaliate against an employee who inquires about, discloses, compares, or otherwise discusses the employee’s wages or the wages or another employee, or is believed by the employer to have done so; or (3) prohibit or attempt to prohibit an employee from lodging a complaint, or testifying, assisting, or participating in an investigation or proceeding, related to a violation of this Act. Employers may, however, prohibit an employee with regular access to information regarding the wages of other employees, such as an HR or payroll employee, from sharing such information, unless there is a legal obligation to furnish the information. This Act is expected to clear the 30-day congressional review period and become law on March 11, 2015. This new D.C. law is similar to President Obama’s Executive Order 13665, which applies to federal contractors and subcontractors.

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