Earlier this month, Democrats in the House of Representatives introduced the “Wage Theft Prevention and Wage Recovery Act” (“Act”). This proposed legislation seeks to amend the Federal Labor Standards Act (“FLSA”) in several key ways.
First, the Act would require all employers to provide regular pay stubs and initial salary disclosures.
Second, the Act would change wage recovery by requiring payment at an employee’s agreed-upon wage rate, rather than at the minimum wage or minimum overtime wage rates, which the FLSA has never done and has traditionally been within the purview of state laws. This would explicitly include rates set forth in collective bargaining agreements.
Third, the Act would change final paychecks by requiring full payment of any remaining salary to be provided the earlier of the scheduled payday or 14 days of termination.
Fourth, the Act would require employers to keep employee records for five years, and permit inspection of such records within 21 days of any employee request.
Fifth, the Act would change FLSA collective actions from an “opt-in” model to an “opt-out” model, similar to most current class actions and a significant departure from the way FLSA representative actions have ever functioned.
Sixth, the Act would invalidate and prohibit all arbitration agreements and class action waivers arising under the FLSA, overturning Supreme Court precedent.
Finally, the Act would increase both civil penalties and recoverable damages for nearly all...
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