New State Law Will Crack Down on Wage Theft

A new law took effect last week thatwill hold law breaking corporations more accountable for stealing wages from working people. An Act to Increase Enforcement and Accountability for Wage Violations (PL 2023 c. 651), which was passed by the Maine Legislature and signed by Governor Janet Mills in April, for the first time authorizes the Maine Department of Labor to order employers who engaged in wage theft to pay back wages, liquidated damages, and interest to workers who have been the victims of labor law violations.

An analysis of the Maine Department of Labor’s Bureau of Labor Standards (BLS) data by the Maine Center for Economic Policy reported that between 2021 to 2023, employers who were caught violating wage and hour laws paid an average penalty of just $9.61 per violation and just 10.7 percent of assessed fines were paid. MECEP found that among workers with low wage, between 11.1 and 19.5 percent are not paid the minimum wage. MECEP estimated that minimum wage violations in Maine amounted to $30 million in 2017.

Previously, inspectors with the Maine Department of Labor’s Wage & Hour Division could impose fines on companies that steal wages from their employees or ignore minimum wage laws, but they were not empowered to order the payment of back wages. As a result, some employers simply refused to pay back wages when caught violating wage and hour laws or insist on paying a lower amount. Prior to this new law, the only way to compel employers to pay back wages was to get the Attorney General’s office to file a lawsuit against violators in court.

“In my 25 years working in the construction industry I have seen countless examples of disreputable contractors taking advantage of non-union workers and cheating them out of their hard earned wages and benefits," said Maine AFL-CIO Vice President and Ironworkers Local 7 member Grant Provost. "When the punishment for violating wage and hour protections is just a slap on the wrist, companies have a perverse incentive to break the law and treat fines as a cost of doing business. This law will finally put some teeth in our labor laws to hold corporate lawbreakers accountable and ensure working Mainers are paid fully for an honest day’s work."