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Horton Law Firm Blog New Proposed Federal Law on Wage Theft

 | New Proposed Federal Law on Wage Theft

In September 2023, several members of Congress introduced a new proposed bill regarding wage theft. Called The Wage Theft Prevention and Wage Recovery Act, this new law, if passed, would provide additional protection to employees, including those in South Carolina, related to the wages that they have lawfully earned.

So What is Wage Theft for South Carolina Employees?

Wage theft refers to companies unlawfully withholding wages from employees that the employees have earned. The most common forms of wage theft that I see for my employee clients in South Carolina are unpaid wages (often bonuses and commissions, but also final paychecks when an employees leaves or is terminated) and unpaid minimum wage and overtime.

For unpaid wages, South Carolina employees have recourse under the South Carolina Payment of Wages Act and the Payment of Post-Termination Claims to Sales Representatives Act. (I’ve blogged about unpaid wages here and about unpaid commissions here, if you want to dive in for a further look at those issues.) Those laws provide for an employee to sue an employer for wage theft in state court and seek to recover three or four times the amount owed to the employee, plus attorney’s fees and costs. Employees can also file a complaint with the South Carolina Department of Labor, but the Department can only investigate and issue a fine, not recover any funds for you.

Wage theft also comes from an employer breaking the law as laid out in the federal Fair Labor Standards Act (FLSA). The FLSA mandates that an employee covered under the law be paid at least minimum wage for all hours worked (currently $7.25 hour, although some states have a higher minimum wage). The FLSA also calls for employees to be paid time and a half as a premium for all hours worked over 40 in a workweek, unless the employee is otherwise exempt from the overtime mandate. In order to be exempt from overtime, the employee must be paid a salary that meets the Salary Test threshold, which is currently $684 a week. The employee’s duties must also fall into one of several main exceptions, including the Executive Duties, Administrative Duties, or Professional Duties.

Wage theft under the FLSA pops up most commonly when a company deliberately misclassifies an employee as exempt from overtime pay. Then the company keeps the money that should have been paid out as overtime pay, enriching the company at the expense of the employee.

What Does the New Proposed Wage Theft Law Provide For?

The new law would provide the following additional protections:

  • Requiring companies to provide an initial disclosure of terms of employment, along with regular paystubs to all employees;
  • Providing for stronger penalties for companies that fail to follow the FLSA’s recordkeeping requirements;
  • Mandating companies pay final paychecks within 14 days or by the next payday;
  • Allowing for up to triple the amount owed by the company as additional damages to be claimed by the employee;
  • For employees who are fired in retaliation for filing a wage complaint, the law would allow for up to 4 times the amount owed as additional damages;
  • Prohibiting a company’s enforcement of any arbitration agreements or class action waivers for these types of claims; and
  • Increasing the amount of time that an employee has to file a wage theft claim.

This new law would essentially give greater teeth to the FLSA. Hopefully, in the long term, it would encourage companies to comply with the wage and hour laws and overall discourage companies from taking advantage of their employees through wage theft.

If you have had your wages stolen by a South Carolina company, you already have certain legal protections. Feel free to reach out at any point to our office for an in-depth discussion of your legal claims and options.


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