Proposed City of Olympia Minimum Wage Ordinance: Part 5—Enforcement

Oct 30, 2015

Olympia City Councilmember Jim Cooper has proposed sweeping labor regulations that would mandate a $15 minimum wage and paid sick leave for all workers in the city, remove businesses’ freedom and flexibility to operate with a part-time workforce and restrict how employers schedule employee shifts.  Clearly the proposed “City of Olympia Minimum Wage Ordinance” is about much more than just a minimum wage. 

The previous four posts in this five-part series have analyzed the provisions of the proposal.  This final post explores how the new regulations would be enforced.

The City would be granted the authority to adopt the rules and regulations necessary to implement and enforce the new law.  The proposal does not include a funding source for the city’s new obligations.  The burden would be on the city (and ultimately on taxpayers) to figure out how to pay for their new duties.

A complaint alleging a violation of the law could be made by the city, an aggrieved worker, or “any entity” of which the aggrieved worker is a member.   The inclusion of the latter provision ensures organized labor could file complaints on behalf of workers. 

An employer found by a court to be in violation of the proposed regulations would be on the hook to pay unlimited damages.  Employers would owe for any back wages plus one percent interest per month on the amount.  Employers would also pay an additional “liquidated damages” of $50 per worker for each day the violation occurred, as well as attorneys fees and costs.  There are no limits or caps on the amounts for which employers could be liable.

The uncapped $50 per employee per day penalty is especially concerning since the proposed law would allow a complaint to be filed against an employer up to three years after the alleged occurrence.  A charge filed three years after the alleged violation could blind-side an employer who perhaps had no idea they were in violation of the rules, with potentially devastating financial results for the business.  If the goal of the proposed ordinance is to ensure Olympia’s employers comply with the new labor mandates, there should not be such an extended time to file a complaint.  One would think the city would want employers to know as soon as possible if they were afoul of the law so any violations could be quickly corrected.  

Worse, that $50 per employee per day penalty could incentivize workers and labor unions to wait as long as possible to file a complaint in order to maximize that penalty.  

But the penalties don’t stop there.  In addition to the back wages plus one percent interest per month and $50 per day per employee that could be awarded by a court, the city could impose civil penalties of up to $5,000 per employee or an amount equal to ten percent of the total amount of unpaid wages, whichever is greater, with a maximum for each violation of $20,000.  The city would also have the discretion to issue an additional civil penalty not less than two times the total value of all wage amounts withheld in violation, plus interest of one percent per month.

Just as the labor mandates in the proposed Olympia ordinance go far beyond anything seen in Seattle, SeaTac or Tacoma, so too are the punishments.  Penalties of the scale Olympia employers could face for violating the proposed ordinance would be unprecedented.  It goes without saying that such extreme penalties would hit the city’s smallest businesses the hardest.  In a city where 80% of the businesses employ fewer than 10 workers, such extreme financial consequences could spell disaster for employers.

You can read about other provisions of the ordinance in Part 1Part 2Part 3 and Part 4 of this series. Part 1 details the “$15 Minimum Wage” provision, Part 2 covers the “Promoting Full Time Employment” provision, Part 3 explains the “Adequate Rest Between Shifts,” “Advanced Notice of Work Schedules” and “Advance Notice of Change in Work Schedules” provisions, and Part 4 explores the  “Paid Sick Leave” provisions of the new laws.