Opinion: To make the minimum wage count, expand wage theft enforcement

In May, Albany leaders reached a budget deal that included raising the state’s minimum wage for the first time in seven years and indexing it to inflation. The change affects almost 1 million low wage workers, who are disproportionately women, immigrants and people of color. Those same vulnerable populations are frequent targets of wage theft, which costs New Yorkers $3 billion annually, according to a 2015 report from the Center for Popular Democracy. Such rampant wage payment violations undermine New York’s labor laws and threaten the promise of the new minimum wage. By enacting the Empowering People in Rights Enforcement (EMPIRE) Worker Protection Act, Gov. Kathy Hochul and the state Legislature can add teeth to our labor laws, expand public enforcement and help stem the tide of unpaid wages.

The EMPIRE Act, introduced by state Sen. Brad Hoylman-Sigal and Assembly Member Latoya Joyner, adapts a well-tested model of whistleblower enforcement to New York’s labor laws. The act expands the reach of the state Department of Labor, allowing workers to sue on behalf of the department for penalties and injunctive relief – actions which could simultaneously put money back into workers’ pockets, stop ongoing wage theft and other violations, and generate nearly $30 million in revenue per year for the Department of Labor by our estimate. 

While the Department of Labor is central to enforcing our labor laws, it is understaffed and underfunded. Its investigators, attorneys and staff face the Herculean task of handling thousands of complaints per year, investigating tens of thousands of employers and compelling violators to follow the law. Recent data suggest the Department of Labor has fewer than 150 investigators for labor standards enforcement, meaning each individual investigator would have to recover approximately $10 million per year to address half of New York’s wage theft problem. That’s a high bar that no one could reach – no matter how effective or talented they are. 

EMPIRE steps in to expand the Department of Labor’s reach. Under the act, workers, labor organizations and whistleblowers (called “relators”) first give notice of violations to the Department of Labor and the state attorney general. Either agency can then step in to investigate the claims and take over the case at any time. If the agencies cannot prosecute, the relator can move forward with a lawsuit to recover the civil penalties with either a stand-alone EMPIRE lawsuit or a lawsuit that also seeks unpaid wages or other damages. Successful suits mean most of the penalties (60%) go to the Department of Labor. The anticipated $30 million per year in penalties could be used to hire approximately 80-100 new investigators, strengthening the Department of Labor’s capacity to tackle wage theft. And since relators must notify the Department of Labor and state attorney general of their claims, EMPIRE will bring a wider scope of potential labor law violations to the government’s attention. The result is a better-funded, better-informed public enforcement apparatus. 

EMPIRE adopts a well-established model for bolstering government enforcement. Its approach is based on the more than 150-year-old False Claims Act, which allows whistleblowers to expose and prosecute contractors who defraud the federal government. That law has been so successful that more than 30 jurisdictions – including New York state – have adopted their own versions. In fact, some states have already leveraged the False Claim Act’s model to improve labor law enforcement. Since 2004, California has allowed workers to bring labor law enforcement actions on behalf of the state – much like the EMPIRE Act would in New York – generating more than $128 million in penalties in 2021 alone.

Under New York’s existing labor laws, low-wage workers often struggle to find lawyers to take their cases, or wait years to have their cases investigated by the state, because their damages are lower than the cost of going to court. With the addition of EMPIRE’s civil penalties, cases for low-wage workers will become more economically viable to prosecute. Moreover, unions would be newly able to enforce the labor law’s protections – both for members and non-members. In union-initiated cases, workers would not have to put their name on the court complaint – offering them critical protection from retaliation. Thanks to these features, EMPIRE will simultaneously bolster public enforcement and improve low-wage workers’ access to justice.

EMPIRE is a win-win for New York. The government will earn more revenue, and the Department of Labor and workers will gain new tools to protect hard-earned wages. The only losers will be the wage thieves who flout New York’s labor laws. It’s time for New York to make good on the promise of its strong labor laws and increased minimum wage. It’s time to pass EMPIRE.