In late September, Columbus City Council passed an ordinance to target wage theft and payroll fraud.
Councilman Rob Dorans, who also works as Chief Legal Counsel for Affiliated Construction Trades (ACT) Ohio, was the chief architect of the ordinance. He pointed out that despite the booming growth in Columbus, many people are not enjoying economic prosperity.
“Unfortunately, too many in our community have been taken advantage of by companies seeking to cut corners to improve their bottom line,” he added.
The legislation will create a committee to review the use of independent contractors on city contracts and construction sites covered by incentive agreements. Contractors will provide the city with information to confirm the workers are properly classified.
It only addresses wage theft issues related to City contracts, projects and economic incentive packages. It does not address wage theft or worker misclassification in the private sector.
While the ordinance does not create a new wage and hour law, it prohibits employers working under city contract, financial incentives, permits, licenses and other benefits from employing subcontractors, who have violated state or federal wage and hour laws in the past four years.
The ordinance requires employers, who use independent contractors on city contracts and construction sites covered by incentive agreements, to provide the city with information to confirm the workers are properly classified.
If a business found to be committing wage theft or payroll fraud, it may face debarment from future contracts with the City; stop work orders; denial, suspension or revocation of building permits; commercial licenses and business permits; forfeiture or reduction of tax abatement; tax incentives or tax credits; and referral to local, state and federal authorities for investigation, further legal action and prosecution.
Businesses, who fail to take corrective action, will become ineligible for future city contracts, incentives or other benefits for a period of four years.
Each month, the city will publish a list of those employers, who should not be utilized as subcontractors.
Employers, who settle wage and hour complaints with their employees, will not penalized. An employer will only be penalized for failing to comply with wage and hour laws and then not taking corrective action.
“If you fail to treat workers with dignity and pay them a fair day’s wage for a fair day’s work, you will not be permitted to do business with the city or work on projects that receive our support for a three-year period,” said Dorans.