By Anthony Marchese
Last year, the District of Columbia amended its Wage Theft Prevention Act, as well as other local labor laws that apply to companies with workers in the District. The stated purpose of the changes, which took effect in February 2015, is to increase the remedies, fines, and administrative penalties and to beef up the enforcement of wage payment and collection laws in the District, thus increasing the accountability of employers to their workers.
There are a number of facets to the amended statute, including new rules for how employers must track hours worked (both for exempt and non-exempt employees), when employees must be paid, and how long employers must keep certain employee records.
One change found in the new law is of particular interest to general contractors, their subcontractors, and staffing firms that operate in the District. As of February 2015, a general contractor is jointly and severally liable for its subcontractor’s failure to pay an employee in accordance with D.C. law. An “end user” of temporary staff is likewise liable for a staffing firm’s failure to properly pay a temporary employee.
While this provision clearly creates risk for general contractors (as well as firms who use temporary labor), subcontractors and staffing companies have duties under the new law as well. These duties include a legal mandate to indemnify their upstream contractors (and end users, respectively) for failure to comply with the law. Only certain contracts predating enactment of the law in September 2014 are excluded from this legal duty to indemnify.
Employers with operations in the District should therefore take this opportunity to review and update their documents and procedures to keep contracts up to date and labor practices compliant.