Stop Thief! So-Called “Wage Theft Prevention Act” Will Steal Away More Jobs & Hurt Businesses
April 8, 2011
President Ronald Reagan was fond of saying that nine of the most terrifying words in the English language were “I’m from the government, and I’m here to help.” President Reagan’s humorous adage illustrated how government’s best intentions often have hidden – and negative – unintended consequences. So is the case with Albany unfunded mandates. Regular readers of my weekly legislative column already are well aware of my strong opposition to unfunded mandates – the costly, time-consuming and downright confusing regulations that state government routinely imposes on localities, school districts, taxpayers and private sector businesses. Is there a specific example of an unfunded mandate that destroys private sector jobs? The answer to that question is “Yes!” Allow me to offer into evidence the so-called “Wage Theft Prevention Act,” which is “exhibit A” in the case of Albany unfunded mandates that end up hurting the private sector. “WAGE THEFT PREVENTION ACT” WILL STEAL AWAY MORE JOBS Near the end of 2010, the state Legislature passed, and former Governor Paterson signed into law, a measure that established the “Wage Theft Prevention Act.” As is customary in the bizzaro world known as Albany, where up is down and left is right, the name (and intent) of the Wage Theft Prevention Act is the exact opposite of the bill’s impact in the real world. Instead of preventing “theft” of employee wages – a solution in search of a problem – this legislation significantly expands costly paperwork requirements on businesses and imposes expensive new civil penalties of up to $10,000 for non-compliance! The Wage Theft Prevention Act makes it more difficult for businesses to be profitable; and a less profitable business is one unable to increase employees’ wages, a vicious circle if ever there was one, especially here in New York where our unemployment rate is among the nation’s highest. WAGE THEFT PREVENTION ACT = ENDLESS PAPERWORK The Wage Theft Prevention Act imposes seemingly endless paperwork requirements on businesses, including bilingual and duplicative mandates for employee communications including notices, records, wage statements, pay dates, allowances, employer contact information and a litany of other provisions like hiring translators, all of which do nothing to safeguard employee wages. This legislation will result in more lawsuits and additional backlogs in our courts, further adding to the already high cost of doing business in New York. Doing two of nearly every piece of paperwork mandated by state government – one in English, the other in the “primary language of the employee” as the act mandates – imposes a budget-busting burden on employers, many of whom are struggling to keep the lights on. VAST MAJORITY OF BUSINESSES ARE HONEST AND PLAY BY THE RULES Speaking from my extensive experience in the private sector, I know that the vast majority of businesses are honest, play by the rules and try to do right by their employees. These businesses are not just the Fortune 500 or some massive multinational corporation – they are the mom-and-pop stores on Main Street, where you stop for groceries, gas or Friday night pizza. You know the folks who own and operate these businesses – they are your friends and neighbors – and they pride themselves on treating their employees and customers with fairness. The Wage Theft Prevention Act penalizes these very same businesses with reams of new, unnecessary and duplicative paperwork requirements. A few bad apples out of literally hundreds of thousands of businesses that employ millions of hard-working New Yorkers does not give Albany a green light to impose yet another unfunded mandate on the private sector. Businesses across the state already are drowning in a sea of unfunded mandates, rules, regulations and government red tape. Passage of the Wage Theft Prevention Act significantly added to that growing burden. ALBANY’S GOOD INTENTIONS GO BAD, VERY BAD Did the sponsor of the Wage Theft Prevention Act set out to intentionally hurt businesses and make New York’s economy less competitive? In all likelihood, the answer to that question is no. In fact, the bill’s sponsor probably had the best of intentions and mistakenly believed that forcing businesses to perform endless paperwork would somehow, someway protect employees. The reality is that by making it even tougher for businesses to stay in business the Wage Theft Prevention Act will hurt employees because it will mean fewer jobs. If the bill sponsor had asked a business owner about the legislation’s potential impact, they would have learned this. The problem is Albany’s “ready, fire, aim” mindset. This is largely due to the fact there are so few business people serving in the state Legislature and that for far too many legislators the private sector is about as familiar as Mars. I voted against the Wage Theft Prevention Act because I knew it would be bad for employees, bad for businesses, and bad for New York. I was not alone in opposing this mandate, as the Business Council of New York State and the National Federation of Independent Business also strongly objected to the bill. The unfortunate part is that the bill became law – and that law now goes into effect this Saturday, April 9, 2011. While the Wage Theft Prevention Act might have been all about politics, the legislation’s unintended consequences put up serious roadblocks in the way of businesses trying to provide quality services, support their communities and take care of their employees. Based on this legislation, Albany’s version of President Reagan’s famous saying might go something like this: “I’m from state government and I’m here to help.” As always, constituents wishing to discuss this topic, or any other state-related matter should contact my district office at (315) 781-2030, or e-mail me at email@example.com. You also can follow me on Facebook and Twitter for the latest news and informational updates regarding state government and our Assembly Minority Conference.