Personal Liability Under Anti Wage Theft Ordinance

Wage Theft

In March 2010, the Miami-Dade County Commissioners passed an ordinance Chapter 22 which prohibits “wage theft” and applies to employees who work in Miami-Dade County, regardless of where the employer is located.  The ordinance provided a new avenue for employees in the county to recover money owed to them by their employers.  The penalties for violating the ordinance are back wages, liquidated damages equal to double the back wages, and administrative costs.  Attorney’s fees are not recoverable, and there is a threshold amount of $60 to maintain a claim.  Sec. 22-2(g).

This was a real breakthrough for the employees.  Over the past years, dozens of clients would visit my office complaining that their employer or former employer failed to pay them back wages they had earned.  Unfortunately, the amounts owed were either too small to make it practical or the employers or their actions weren’t covered under applicable state or federal law.  I thought to myself, if only there were a cost effective way for these people to recover.   Then low and behold the ordinance was passed.  Last year, I was visited by three gentlemen who were formerly working as couriers for a local courier service.  They each had worked there for about a month and when it came time for them to be paid, the employer offered them far less than they were originally promised and refused to pay them for costs such as parking and tolls as was agreed up front.

I agreed to represent them to judge for myself how the system works.  We appeared at the hearing and while the employer failed to appear, we still had to plead enough facts to place under the jurisdiction of the ordinance.  Two issues arose.  The first was whether my clients were considered employees or independent contractors.  Despite my clients’ signature acknowledging they were independent subcontractors, we were able to establish enough facts to convince the hearing officer that they did qualify as employees under IRS regulations.  The final issue that arose is when we requested that the hearing officer find the employer personally liable for the wages and other damages.

Attached is a draft letter of what I submitted to advance my position.

The ordinance defines an Employer as:  “Employer shall include any person who, acting either individually or as an officer, agent or employee of another personal, acts directly or indirectly in the interest of a person or entity employing an employee….”

The ordinance defines employer as any “person”, acting either individually or as an officer, or agent.  The exact language of the ordinance seems to state that persons as well as companies are the ones to be held responsible.  It states that an employer is an officer or agent who acts directly or indirectly in the interest of the entity employing the complainant.   There is no language whatsoever in the ordinance limiting liability of an individual.  Furthermore, the ordinance is by nature one imposing strict liability; there is no requirement of proof or intent or fraud.  Nor is there any requirement of knowledge of the wage violation other than the requirement of notice which was provided in this case.

Section 22-3 then goes on to define a wage theft violation by stating that “for any employer to fail to pay any portion of wages due an employee . . . is found to have unlawfully failed to pay wages.  Furthermore, the ordinance is by nature one imposing strict liability; there is no requirement of intent or fraud.  Nor is there any requirement of knowledge of the wage violation other than the requirement of notice which was provided in this case.  If it’s proved that wages were unlawfully withheld, then the “person” is liable.

The rules of statutory construction hold that a statute or ordinance is to be given its clear meaning.  If the County wanted to limit personal liability, they would have included that language, or, taken out the language “agent …”.  As it is, the statute clearly states that the person acting on behalf of the entity is liable for their or their entities violation of the ordinance.  The ordinance is directed at individuals.   To hold otherwise would frustrate the purpose of the ordinance as set forth below.

Sec. 22-1. Declaration of Policy.
It is hereby declared to be the policy of Miami-Dade County in the exercise of its police power for the public safety, health and general welfare, to eliminate and prevent wage theft. Eliminating the underpayment or nonpayment of wages earned by persons working in the County serves the public purpose by promoting economic security and dignity for those working in the County; by promoting business and economic development through the elimination of unfair economic competition by unscrupulous businesses that do not pay or that underpay their employees; and by relieving the burden on the public that subsidize unscrupulous employers whose employees are forced to rely on public assistance because of unpaid or underpaid wages.

As there is a dearth of case law defining the subject ordinance, it might be helpful to look at similar laws from another jurisdiction.  I wish to refer to the Illinois Wage Payment and Collection Act, a copy of which is attached hereto.  This act uses the same language of the Miami Dade Ordinance.  In the second paragraph of section 2 of the Act, it defines employer in part as  “or any person or group of persons acting directly or indirectly in the interest of an employer to an employee, for which one or more persons gainfully employed.”

I have also attached a copy of a recent National Law Review article which discusses personal liability under the Illinois Law.  The article states that based on current case law “personal liability will now attach in such situations (and generally) as long as the individual is an officer or agent acting in the employer’s interest.”

Respondents were clearly acting on behalf of the corporation and were agents of the corporate defendant.  XXXXXX responded to the complaint and through her use of first person pronouns, clearly indicated that she was an agent of the company.  The checks that were purportedly made to my clients were signed by her.  Finally, she is listed on sunbiz as the president of defendant corporation.

In summary, the ordinance clearly was meant to hold “persons” liable.  Other similar laws using the exact same language have been interpreted by courts to impose personal liability if they are agents of the company.

I respectfully request that the hearing officer consider this letter and the attachments and issue an order holding XXXXXXXXX and the Corporation liable for their wage violations.  I believe that holding her personally liable as well as the corporation will implement the intended meaning of the ordinance and further dissuade others to violate the ordinance.

As I write this blog, I am still awaiting the board’s order on this issue.