Chairman of the House Judiciary Committee Robert E. Craven, Sr.’s legislation (2023-H 5902) would increase penalties for wage theft and employee misclassification was heard by the House Judiciary Committee May 11.

 “Wage theft is theft, period, and anyone guilty of victimizing their employees deserves to be held accountable for their crime.  This offense is even more egregious since it is usually perpetrated on our most vulnerable residents who are on the lower-end of the socio-economic spectrum.  An honest day’s work deserves an honest pay and if our state’s employers fail to operate by this ideal, they will rightfully be punished under this legislation,” said Chairman Craven.

The bill would make wage theft with a value of more than $1,500 a felony. Enhanced penalties would vary depending on the value of the stolen wages, with a minimum of up to three years in prison and up to $10,000 in fines and a maximum of up to 10 years in prison and twice the value of the wages.

Employee misclassification would also be considered a civil violation; however, the attorney general would have the option of pursuing a criminal violation. In instances of a first offense, penalties could include imprisonment for not more than three years or a fine of not more than twice the value of the wages or $10,000, whichever is greater, or both.       In instances of a second or subsequent offense, penalties could include imprisonment for not more than five years or a fine of not more than three times the value of the wages or $20,000, whichever is greater, or both.

Wage theft occurs when an employer fails to pay their employees legally or contractually promised wages. Misclassification occurs when a worker is performing a job as if they were an employee but are classified by the employer as an independent contractor. Employers often do this to avoid paying benefits, overtime, taxes, Social Security Disability Insurance, Medicare, and workers’ compensation insurance.

The bill was held for further study.