Previously 12 months, financial justice-focused state attorneys basic (AGs) have continued a development of accelerating their involvement in implementing and defending employees’ rights. State AGs have introduced lawsuits combatting wage theft and employee misclassification in a variety of industries, and typically criminally prosecuted egregious circumstances. They’ve pushed again in opposition to unfair employment practices that cut back employee energy within the labor market, like non-compete and no-poach provisions, in addition to a serious merger with potential to adversely influence employees. State AGs have championed state-level pro-worker insurance policies within the legislature and defended them in court docket, they usually have weighed in on federal labor and employment coverage.
Most notably, there are presently twelve state AG workplaces with devoted labor or employee safety models (in contrast with solely three in 2016): Arizona, California, Colorado, D.C., Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, New Jersey, and Pennsylvania. A number of smaller state AG workplaces, like Delaware and Rhode Island, have attorneys targeted on implementing employees’ rights, even with out a devoted unit. State AGs are more and more key gamers in defending employees’ rights. On the similar time, there’s nonetheless appreciable room for higher involvement: ideally, defending employees will change into a core operate of nearly all state AG workplaces, alongside different areas like antitrust regulation and shopper safety.
Labor Day 2024 is an apt second to look at the intensive actions of state AGs in relation to employees’ rights within the final 12 months.
Preventing misclassification of employees as impartial companies slightly than as staff
Nationwide, employer misclassification of employees as “impartial contractors” slightly than as staff has stark penalties: it deprives employees of important protections, creates unfair competitors for law-abiding employers, and harms the general public coffers as a result of tax and security internet applications don’t obtain wanted funding. Various state AG workplaces have performed a task in preventing this, by way of litigation, job forces, coverage enter, and extra.
D.C. AG’s workplace: The D.C. AG’s workplace supplies an instance of an workplace targeted on preventing misclassification. The workplace obtained a $3 million settlement resolving its lawsuit in opposition to Come up Digital Options, a big nationwide company that gives buyer companies representatives to main household-name firms. As a situation of the settlement, Come up agreed to cease doing enterprise in D.C. ProPublica coated the D.C. AG’s lawsuit and settlement, and beforehand reported extensively in regards to the company.
The workplace additionally took motion in a number of circumstances within the building business, securing a $600,000 settlement with a building firm that underpaid and misclassified employees, and an settlement by the corporate to not do enterprise in DC for 5 years, and a separate $350,000 settlement with further measures to make sure future compliance in one other case. In June, the workplace sued 5 firms in a case involving tons of of building employees. The lawsuit was filed in opposition to a number of gamers in relation to a growth venture: the final contractor, a subcontractor, and three labor brokers who helped procure employees. Information protection of the case detailed the worth of looking for such “up-the-chain legal responsibility” in building misclassification and wage theft circumstances.
The workplace additionally resolved smaller misclassification circumstances, together with one involving a political guide and one other involving Fetch Bundle Inc., which companions with condominium buildings to outsource bundle receipt and supply for residents. Lastly, in August 2024, the D.C. AG introduced the largest restoration in a employees’ rights enforcement motion in District historical past: a $3.75 million settlement with Energy Design, a serious building agency. The settlement consists of $1.7 million in restitution to over 1,200 employees, in addition to penalties and charges to the District, and strong injunctive measures to stop future violations.
The Illinois AG reached a $718,000 settlement with a building firm that misclassified over 480 of its employees as impartial contractors as an alternative of as staff, and likewise paid a hard and fast each day fee irrespective of what number of hours they labored, thereby depriving employees of required additional time pay.
New Jersey AG’s Workplace collaborates with state labor division to struggle misclassification: The New Jersey AG’s workplace collaborated with the state labor division on main initiatives associated to misclassification of employees, together with a lawsuit in opposition to the nationwide trucking firm STG Logistics, Inc., and STG Drayage, LLC (in accordance with its web site, the biggest drayage supplier in america). The case is the primary to make use of new authority in New Jersey that permits the AG to sue in court docket on behalf of the Labor Commissioner. The AG and the Labor Division additionally collectively entered right into a $455K settlement settlement with a luxurious automotive transporter based mostly on alleged misclassification of employees as impartial contractors, illegal deductions from pay, and recordkeeping violations.
Minnesota AG Process Power on misclassification results in laws: The Minnesota AG’s workplace created a statewide job pressure to review and make suggestions concerning combatting employer misclassification fraud. The AG’s job pressure developed a coverage proposal that became a invoice that was signed into regulation this 12 months as Article 10 of a multi-issue invoice (pp. 175-209). Amongst different measures, the regulation facilitates coordinated multi-agency enforcement, will increase penalties for repeat violators, creates a stronger check for employees within the building and enchancment companies industries, and creates a non-public proper of motion for victims of employer misclassification.
Preventing misclassification within the gig financial system: After a multi-week bench trial in opposition to Uber and Lyft for misclassifying drivers, the Massachusetts AG workplace reached a settlement on the eve of closing arguments. Information protection explains that the AG’s choice to settle earlier than a possible favorable verdict aimed to keep away from a poll initiative that might have undermined the state’s victory and cemented employees’ standing as impartial contractors sooner or later. The AG’s settlement requires Uber and Lyft to drop the poll initiative, pay $175 million in settlement funds, and undertake pay charges of $32.50/hour. The decision additionally consists of important further reduction for drivers: paid sick go away, occupational insurance coverage, transparency about journeys and pay, deactivation procedures, and extra. Shortly after the settlement, the AG expressed assist for a union-supported poll initiative that might enable drivers to collectively cut price. The AG additionally authored an op-ed in regards to the choice to settle the case.
The Pennsylvania AG’s workplace filed an amicus transient in Razak, et.al. v. Uber Applied sciences urging a federal court docket to make use of the proper interpretation of Pennsylvania’s legal guidelines when deciding the query in concern within the case–whether or not Uber Black drivers are staff or impartial contractors.
Preventing wage theft
Whereas some states have statutes defining the time period “wage theft,” elsewhere, it’s a colloquial time period referring to conditions through which employees are usually not paid the entire wages they’re legally owed: too usually, staff work uncompensated hours, don’t obtain additional time, their hours are shaved, illegal deductions are taken, or suggestions are stolen. Many AG workplaces have taken measures to struggle wage theft. Some examples, in alphabetical order:
The California AG’s workplace filed a lawsuit in opposition to a building firm for wage theft and different labor violations. The workplace additionally reached a $826,000 settlement with a stoneware firm that used an unlicensed, out-of-state labor dealer. A joint investigation by the AG’s workplace, the Employment Improvement Division (which administers unemployment insurance coverage), and the Labor Commissioner’s Workplace discovered that the corporate didn’t report and pay payroll taxes, pay additional time, and supply itemized wage statements to employees because of their affiliation with the labor dealer. The settlement consists of again taxes, again wages for additional time, a civil financial penalty, and funds for a restitution administrator.
The Illinois AG’s workplace, together with the U.S. Division of Labor, obtained a $3 million settlement in a case involving a meat processing firm that allegedly didn’t pay additional time, paying by verify for the primary 40 hours of labor and money at straight time charges off the books for hours previous forty. The AG additionally settled a case for $335,000 involving truck drivers who haul street building supplies to and from building websites; the employees weren’t paid all the time spent driving and likewise had prevailing wage violations.
The Massachusetts Legal professional Normal is the first enforcer of wage and hour legal guidelines within the commonwealth, and has a file of appreciable exercise preventing wage theft. Various these circumstances additionally included paid sick go away or different violations. The workplace reached a $6.8 million settlement, together with restitution and penalties, in a wage-theft case involving greater than two thousand employees on the MGM Springfield On line casino Lodge. The workplace additionally used the False Claims Act to get better almost $1 million from a building firm, based mostly on a subcontractor’s failure to pay the prevailing wage. The workplace additionally issued citations in opposition to a garment producer ($665,000), a temp company ($1.3 million), a concierge staffing company that gives concierges for luxurious buildings ($2.4 million), Boston Market ($104,000), and an Amazon warehouse subcontractor. These circumstances are ongoing.
The New York AG’s workplace reached settlements with Uber and Lyft, in a case involving tax and charge deductions from driver pay that ought to have been paid by passengers, not drivers. The settlement consists of $328 million in whole, most of which can be distributed to drivers; it additionally requires the businesses to offer paid sick go away to drivers, and to pay drivers outdoors of New York Metropolis at a minimal fee of $26.00 per hour. (New York Metropolis already regulates pay charges contained in the Metropolis). Different circumstances concerned $10,000 in wage theft by a dance firm, in addition to a $230,000 joint settlement, together with the New York Metropolis Comptroller’s workplace, involving a New York Metropolis constructing that failed to pay service employees prevailing wages, regardless of receiving a tax profit that required them to take action.
The Wage Theft Unit of the Minnesota AG’s workplace has been very lively because it was established in 2019. The workplace introduced its biggest-yet wage theft case, submitting a lawsuit in opposition to a dairy farms that allegedly owed employees $3 million and likewise deducted cash from wages for uninhabitable residing quarters. Two months after submitting go well with, the AG’s workplace obtained a stipulated short-term injunction requiring correct cost of employees and enchancment of housing situations whereas the lawsuit is pending. The workplace additionally settled circumstances involving unauthorized paycheck deductions by 3M (almost $1 million), and illegal time-rounding practices by a medical system manufacturing firm that persistently resulted in hours labored being rounded all the way down to employees’ detriment ($250,000).
Little one labor
Amid a pointy enhance in baby labor violations nationally, a number of state AG workplaces have taken motion to guard younger employees. The Massachusetts AG recovered $1 million from Dunkin franchisees, and cited different eating places for baby labor infractions. The Minnesota AG’s workplace settled a baby labor lawsuit case they dealt with on behalf of the Minnesota Division of Labor and Business. The case concerned youngsters performing hazardous work at a meat processing facility.
Defending immigrant employees
Some state AG workplaces have taken motion particularly to succeed in or defend immigrant employees, given their heightened vulnerability to office exploitation. The Washington AG’s workplace prevailed within the state Supreme Courtroom in a case involving immigrant detainees who labored for the non-public jail operator Geo Group and have been paid $1 per day, in violation of the state’s minimal wage regulation. The Courtroom dominated that these employees have been entitled to minimal wage. The D.C. AG completely shut down a recruitment agency that exploited international alternate academics, securing penalties and restitution. Recognizing that employees with out employment authorization are extra susceptible nonetheless, the Massachusetts AG’s workplace introduced a $750,000 grant program to fund nonprofit authorized companies and group companions to assist present authorized companies and assist individuals apply for work authorization. The Illinois AG proposed laws to strengthen protections prohibiting employer retaliation in opposition to immigrant employees; it was handed by the state legislature and presently awaits the governor’s signature.
As well as, a number of multistate coalitions of state AGs took motion to assist immigrant employees, together with submitting a touch upon a U.S. Labor Division proposal for H-2A short-term agricultural employees, and a letter calling on the Division of Homeland Safety (DHS) to expedite and broaden entry to work permits for newly arrived immigrants. Most just lately, a multistate coalition of state AGs, localities, and native prosecutors efficiently advocated to DHS for an extension (from two years to 4 years) of deferred motion for employees in labor disputes.
Working collectively to weigh in on federal issues
State AGs collaborated in plenty of multistate actions to assist employees’ rights. They filed amicus briefs supporting the federal authorities’s requirement of upper minimal wages for presidency contractor staff and defending the Equal Employment Alternative Fee’s rule implementing the Pregnant Employees Equity Act. They submitted a remark letter to the Division of Treasury in regards to the proposed guidelines on enforcement of prevailing wage and apprenticeship coaching provisions within the Inflation Discount Act; a letter to Congress “to defend fund managers’ use of Environmental, Social, and Governance (“ESG”) components as in step with prudent funding decision-making to maximise returns”; and a letter to the U.S. Labor Division urging it to require extra detailed licensed payroll information data underneath the federal prevailing wage regulation.
A coalition of state AGs additionally filed an amicus transient in Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. ___ (2024), urging the Supreme Courtroom to carry that transportation employees in non-transportation industries are coated by the transportation-worker exemption to the Federal Arbitration Act and subsequently are capable of file lawsuits in court docket slightly than being pressured into arbitration. This argument finally prevailed.
Supporting state labor departments of their investigations and representing the state
A central facet of state AGs’ work includes representing the state and state companies in court docket, which typically includes labor points.
Some state AGs file lawsuits on behalf of the state usually or state labor departments. Connecticut’s AG, for instance, filed a $6 million lawsuit in opposition to the operator of state relaxation stops for allegedly not paying employees the next wage fee that was required as a situation of a state contract. Wisconsin’s AG sued a garment enterprise for unpaid wages, upon the request of the state Division of Workforce Improvement. The Minnesota AG and Minnesota’s Division of Labor and Industries collectively sued a serious building contractor alleging widespread wage theft ($2.4M) on 19 tasks. North Carolina’s AG filed a lawsuit in opposition to a paper mill for breach of a grant settlement with the state: the settlement offered the mill with $12 million in financial growth incentives in alternate for a dedication to take care of operations, and at the very least 800 jobs by way of a set date, however the mill closed and terminated all staff earlier than then.
State AGs’ illustration position may safeguard state labor company enforcement. Minnesota’s AG gained a consent judgment in a case the place a building contractor obstructed a state labor division investigation; amongst different measures, settlement phrases required the employer to personally inform all employees, with an AG consultant current, that they’re free to talk with the labor division.
State AGs have defended pro-worker state legal guidelines which might be challenged by enterprise opponents. For instance, a number of AGs are defending state office conscience legal guidelines. Usually described as legal guidelines banning employer captive viewers conferences, the legal guidelines have a lot broader scope and prohibit employers from retaliating in opposition to employees for not attending employer-sponsored conferences through which the first objective is to speak the employer’s opinion regarding spiritual or political issues. New York’s AG has defended the state’s Farm Laborers Truthful Labor Practices Act, which supplies farmworkers the proper to prepare.
California’s AG repeatedly and efficiently fought off challenges to AB5, a state regulation adopting the protecting “ABC check” for figuring out worker standing. The ninth Circuit issued an en banc choice upholding AB5 as not violating equal safety regulation.
Addressing labor market inequities
Varied points of labor market inequities are detrimental to employees. Company focus and sure mergers can depress wages and hurt employees. Generally employers expressly collude concerning employee pay, and too many enter into no-poach agreements, agreeing to not rent one another’s staff. Employee mobility and dealing situations are harmed by coercive contract phrases: non-competes and stay-or-pay contracts (like coaching reimbursement settlement provisions, or TRAPs) forestall employees from with the ability to search a brand new job. State AGs have begun to make use of their labor, shopper, and antitrust authority to handle all these office abuses.
New York’s AG recovered $4.5 million from a title insurance coverage firm that used no-poach agreements that restricted their staff’ mobility. A multi-state group of AGs submitted an amicus transient in a no-poach case involving tax preparer Jackson Hewitt, and 21 state AGs and the U.S. Division of Justice sought reinstatement of a lawsuit over no-poach agreements between Saks Fifth Avenue and high-end luxurious designers. A multi-state group of AGs and the Federal Commerce Fee, in addition to the Colorado AG individually, sued to dam an enormous grocery store chain merger between Kroger and Albertsons for a bunch of causes, together with the influence on employees. The FTC-multistate lawsuit notes that the merger “might considerably enhance Kroger’s and Albertsons’s leverage in negotiating with employees, lowering wages, advantages, alternatives, and the standard of office situations and protections.”
The Illinois AG workplace prevailed in an Illinois Supreme Courtroom case in regards to the applicability of the state’s antitrust legal guidelines to labor markets. The case emerged from an AG investigation of three short-term staffing companies that allegedly used no-poach agreements.
A multistate coalition of seven AGs reached a settlement to finish using non-competes for hourly staff on the oil change and auto companies firm Valvoline. And implementing a brand new state regulation, Minnesota’s AG reached a settlement with a business printer to launch their employees from non-competes, and to inform employees of this.
California’s AG filed a stipulated judgment with a house care firm that engaged in unfair competitors by together with in purchasers’ contracts no-hire and non-soliticitation provisions that positioned illegal constraints on house care employees’ mobility. The contracts additionally included a $12,500 liquidated damages cost if a shopper used, employed, or solicited a former caregiver from the corporate as much as a 12 months after termination of companies. The stipulated judgment requires the corporate to pay $500,000 in civil penalties and imposes injunctive phrases to “defend employees, safeguard customers, and protect competitors out there.”
Pennsylvania’s AG used its shopper safety authority to attain an settlement with PetSmart, requiring higher transparency and disclosures in relation to TRAPs.
Felony prosecutions
State AG felony authority varies: in some states, like Delaware and Rhode Island, AGs are the only real felony enforcers. In different states, like Connecticut, the AG has no felony authority. Most states fall someplace in between: State AGs have authority to carry expenses involving sure crimes for instance, or in circumstances the place a district lawyer is unable to deal with the case or requests the AG’s help.
A number of AGs have introduced felony circumstances in opposition to employers for crimes affecting employees. Most notably, the Massachusetts AG workplace obtained the state’s first labor trafficking conviction after a jury trial in a case involving a defendant who pressured immigrant girls to scrub companies. The defendant was sentenced to five years in jail. The Michigan and Hawai’i AGs additionally introduced labor trafficking expenses involving a home employee and a employee on a farm, respectively.
California’s AG secured convictions in circumstances alleging wage theft, tax evasion and extra, together with in relation to a bunch of eating places within the Bay Space and one other group of eating places in Los Angeles. The Michigan AG’s workplace charged an insurance coverage company proprietor with embezzling from staff.
Schooling and outreach
State AGs have excessive visibility, and their workplaces usually use this place to teach the general public on vital employees’ rights points. The Pennsylvania AG’s workplace, for instance, hosted a labor trafficking symposium together with Labor Day 2023, and is planning its second Labor Day symposium, targeted on house well being care employees, for 2024. DC’s Legal professional Normal did social media outreach a couple of minimal wage enhance and a couple of new pay transparency regulation. After Arizona’s AG created a brand new devoted employee safety unit, the brand new unit’s chief authored an article in Arizona Legal professional Journal (a month-to-month publication of the Arizona State Bar) about plans for the newly created unit.
Not all of the state AG information is sweet for employees
In distinction to the constructive developments described above, there are state AGs who’ve taken anti-worker actions prior to now 12 months. For instance, Texas’ AG filed a lawsuit difficult a federal labor division rule that might tremendously broaden the variety of employees entitled to additional time pay; fourteen state AGs filed an amicus transient in assist of the Texas lawsuit. And lots of state AGs merely don’t pursue office justice amongst their ongoing actions.
Wanting forward
Social justice-oriented state AGs will doubtless proceed to broaden their involvement in employee points within the coming 12 months. The presidential election looms massive, after all, and the federal panorama can be vastly totally different relying on the leads to November. Within the occasion of a second Trump administration, state AGs that care about employees will doubtless commit appreciable effort to preventing rollbacks of employee protections, whereas additionally filling the enforcement hole, as federal labor companies will doubtless pull again from aggressive motion in relation to employees’ rights. In a possible Harris administration, state AGs targeted on employees’ rights will doubtless proceed to aggressively implement state employee safety legal guidelines, lots of that are stronger than federal statutes.
On the similar time, ten states are electing their high authorized officer this 12 months, and the outcomes of these elections may decide whether or not sure states proceed down this path of elevated employee safety and whether or not extra state AGs take up this work. State AGs will proceed to make use of a variety of instruments—labor regulation, antitrust, shopper regulation, felony regulation, false claims acts—to struggle employer abuses. And because the development of state AG workplaces establishing devoted labor models continues and solidifies, state AGs might maybe collaborate extra extensively in relation to violations by nationwide or regional employers.
In any future state of affairs, one factor appears clear: a set of justice-focused state AGs will play a significant position in standing up for employees within the 12 months forward.
Labor and Employment Legislation, State Attorneys Normal, Employees’ Rights
