News & Events

Shelby County Contemplates Proposed Wage Theft Ordinance

Private employers in Shelby County, Tennessee and the City of Memphis may soon be subject to local ordinances that would create an administrative process for employees to seek redress for wage theft complaints and could require employers to pay treble damages in fines.  On October 31, 2012, Commissioner Steve Mulroy proposed the Shelby County Wage Theft Ordinance, which would apply to the unincorporated areas of Shelby County, that allows employees to file complaints for “wage theft” and/or an employer’s alleged failure to timely pay minimum wage or overtime wages required under existing applicable law.  The ordinance is being backed by the Workers Interfaith Network and has received much attention in the local press.  Memphis City Councilman Myron Lowery is also sponsoring a mirrored ordinance that covers City of Memphis employers, which would be introduced if the County ordinance passes.  According to supporters, two-thirds of immigrant and low-wage workers in Shelby County have experienced wage theft, and the state and federal Departments of Labor lack the resources to address small claims by individual workers.

The latest revision (November 15th) to the County ordinance provides a streamlined administrative procedure for employees to file wage theft complaints of at least $100.00 against an employer with the Administrator of the County Office of Equal Opportunity Compliance. The Administrator would first attempt conciliation of the dispute through voluntary mediation, and if unsuccessful, an investigation is conducted for determination of cause.  The Administrator could then issue a citation requiring the employer to appear in Shelby County General Sessions Environmental Court for judicial findings and remedies for ordinance violations.  Additionally, the ordinance provides that if more than 25% of the employer’s work force files complaints within a 90-day period, then the Administrator must refer the matter to the U.S. Dept. of Labor for investigation and full audit of the employer’s business.

The County ordinance defines “wage theft” as:

failing to pay a worker the wages owed by the employer; failure to pay the agreed upon amount; failure to pay the minimum required by applicable law; requiring the worker to work “off the clock,” or to pay back to the employer all or part of the wages provided; disallowing break times otherwise required by law; or failure to pay overtime as required by law.

The burden is on the employee to prove the wage theft violation by a preponderance of the evidence.  Employers found to be in violation at the judicial hearing could be required to pay back wages, interest, costs, in addition to fines of $50.00 per offense, capped at three times the amount of wages owed.  Moreover, the ordinance preserves the cumulative rights of employees under applicable federal, state and local laws.

Employers should take heed and beware of this proposed ordinance, as it could subject businesses to additional exposure for potential wage and hour violations.  In its current form, this legislation would in essence allow for local enforcement and adjudication of alleged FLSA, TN Wage Regulation Act, T.C.A. § 50-2-101, et. seq., and contractual wage disputes.  The County ordinance is currently scheduled for its final vote on January 14, 2013 before the Shelby County Board of Commissioners.  Please contact your local Shelby County Commissioner and/or Memphis City Councilperson for more information or to discuss or voice your opinion on this issue.

-Carlyle C. White