Attorney General Neronha and state labor leaders seek to strengthen penalties for wage theft and worker misclassification

Published on Wednesday, April 13, 2022

Testimony in support of wage theft and worker misclassification legislation before the Rhode Island House Committee on Judiciary scheduled for Wednesday at the rise of the House

PROVIDENCE, RI – Attorney General Peter F. Neronha will testify in support of legislation currently before the General Assembly that will increase penalties for wage theft and misclassification, joining state labor leaders in a push to protect Rhode Island workers, taxpayers, and business owners.

“Employers who fail to pay workers their hard-earned wages or misclassify them as independent contractors not only cheat their workers, but also cheat Rhode Island taxpayers,” said Attorney General Neronha. “Currently, our state does not treat this type of criminal conduct as seriously as it should. A person can steal a television worth over $1,500 and it’s a felony, but if a person steals a worker’s wages in any amount, it’s a misdemeanor. That is why this bill is important – the punishment should fit the crime and ultimately deter this conduct.”

The bill, H 7677, introduced by Chairman of the House Judiciary Committee, Robert E. Craven, Sr. (D-Dist. 32, North Kingstown) at the request of the Attorney General, proposes to reclassify knowing or willful instances of wage theft over $1,500 from a misdemeanor to a felony. The bill also proposes to reclassify knowing or willful instances of worker misclassification from a misdemeanor to a felony. The Senate companion bill is S 2775, sponsored by Senate Majority Leader Michael J. McCaffrey (D-Dist. 29, Warwick).

“Misclassifying workers as independent contractors harms workers, taxpayers, and businesses,” said Michael F. Sabitoni, President of the Rhode Island Building and Construction Trades Council. “Unscrupulous employers engage in this practice to avoid paying benefits, overtime, taxes, Social Security, Medicare, and workers’ compensation insurance. When this happens, employees are shortchanged, the State is deprived of tax revenue, and the employer gains an unfair advantage over competing businesses that follow the law.”

According to a 2022 report on wage theft and worker misclassification in Rhode Island published by the UMASS Amherst Labor Center and Institute for Construction Economic Research, $185.3 million in workers’ wages salaries were unreported to the DLT in 2019, attributable to both worker misclassification and the failure of firms to fully report the earnings of correctly-classified employees.

Cases

In September 2020, David Pelino, a former Warwick business owner, was sentenced to 18 months of probation and ordered by the court to pay restitution, after failing to pay over $7,000 in wages to former employees of Bright Sky Solar, LLC in 2018.

In July 2020, the Attorney General charged Marcello Pompa, owner of M&M Cleaning of MA, LLC, with wage theft; failing to maintain workers’ compensation insurance coverage; and workers’ compensation insurance premium fraud, alleging that Pompa failed to pay approximately $10,885 in wages to 16 former employees before the company went out of business in March 2019. This case remains pending.

In October 2021, Thomas McCoog & Amy Franklin, owners of Franklin Analytical Services, were arraigned on wage theft charges for allegedly not paying employees overtime wages and filing false payroll documents stemming from their work as a contractor during the construction of Barrington Middle School.

Members of the public can watch tonight’s hearing on Capitol TV.

###