[House Report 117-540]
[From the U.S. Government Publishing Office]


117th Congress     }                                  {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                  {      117-540

======================================================================

 
          WAGE THEFT PREVENTION AND WAGE RECOVERY ACT OF 2022

                                _______
                                

October 7, 2022.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Scott of Virginia, from the Committee on Education and Labor, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 7701]

    The Committee on Education and Labor, to whom was referred 
the bill (H.R. 7701) to amend the Fair Labor Standards Act of 
1938 and the Portal-to-Portal Act of 1947 to prevent wage theft 
and assist in the recovery of stolen wages, to authorize the 
Secretary of Labor to administer grants to prevent wage and 
hour violations, and for other purposes, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     9
Committee Action.................................................     9
Committee Views..................................................    11
Section-by-Section Analysis......................................    17
Explanation of Amendments........................................    19
Application of Law to the Legislative Branch.....................    19
Unfunded Mandate Statement.......................................    19
Earmark Statement................................................    20
Roll Call Votes..................................................    20
Statement of Performance Goals and Objectives....................    26
Duplication of Federal Programs..................................    26
Hearings.........................................................    26
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    26
New Budget Authority and CBO Cost Estimate.......................    26
Committee Cost Estimate..........................................    26
Changes in Existing Law Made by the Bill, as Reported............    27
Minority Views...................................................    45

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Wage Theft Prevention and Wage 
Recovery Act of 2022''.

      TITLE I--AMENDMENTS TO THE FAIR LABOR STANDARDS ACT OF 1938

SEC. 101. REQUIREMENTS TO PROVIDE CERTAIN DISCLOSURES, REGULAR 
                    PAYSTUBS, AND FINAL PAYMENTS.

  The Fair Labor Standards Act of 1938 is amended by inserting after 
section 4 (29 U.S.C. 204) the following:

``SEC. 5. REQUIREMENTS TO PROVIDE CERTAIN DISCLOSURES, REGULAR 
                    PAYSTUBS, AND FINAL PAYMENTS.

  ``(a) Disclosures.--
          ``(1) Initial disclosures.--Not later than 15 days after the 
        date on which an employer hires an employee who in any workweek 
        is engaged in commerce or in the production of goods for 
        commerce, or is employed in an enterprise engaged in commerce 
        or in the production of goods for commerce, the employer of 
        such employee shall provide such employee with an initial 
        disclosure containing the information described in paragraph 
        (3). Such initial disclosure shall be--
                  ``(A) provided as a written statement or, if the 
                employee so chooses, as a digital document provided 
                through electronic communication; and
                  ``(B) made available in the employee's primary 
                language.
          ``(2) Modification disclosures.--Not later than the earlier 
        of 5 days after the date on which any of the information 
        described in paragraph (3) changes with respect to an employee 
        described in paragraph (1) or the date of the next paystub 
        following the date on which such information changes, the 
        employer of such employee shall provide the employee with a 
        modification disclosure containing all the information 
        described in paragraph (3).
          ``(3) Information.--The information described in this 
        paragraph shall include--
                  ``(A) the rate of pay and whether the employee is 
                paid by the hour, shift, day, week, or job, or by 
                salary, piece rate, commission, or other form of 
                compensation;
                  ``(B)(i) an indication of whether the employee is 
                being classified by the employer as an employee subject 
                to the minimum wage requirements of section 6 or as an 
                employee that is exempt from (or otherwise not subject 
                to) such requirements as provided under section 
                3(m)(2), 6, 13, or 14, as well as the reason for the 
                exemption; and
                  ``(ii) in the case that such employee is not 
                classified as being an employee subject to such minimum 
                wage requirements, an identification of the section 
                described in clause (i) providing for such 
                classification;
                  ``(C)(i) an indication of whether the employee is 
                being classified by the employer as an employee subject 
                to the overtime compensation requirements of section 7 
                or as an employee exempt from such requirements as 
                provided under section 7 or 13; and
                  ``(ii) in the case that such employee is not 
                classified as being an employee subject to such 
                overtime compensation requirements, an identification 
                of the section described in clause (i) providing for 
                such classification;
                  ``(D) the name of the employer and any other name 
                used by the employer to conduct business; and
                  ``(E) the physical address of and telephone number 
                for the employer's main office or principal place of 
                business, and a mailing address for such office or 
                place of business if the mailing address is different 
                than the physical address.
  ``(b) Paystubs.--
          ``(1) In general.--Every employer shall provide each employee 
        of such employer who in any workweek is engaged in commerce or 
        in the production of goods for commerce, or is employed in an 
        enterprise engaged in commerce or in the production of goods 
        for commerce, a paystub that corresponds to work performed by 
        the employee during the applicable pay period and contains the 
        information required under paragraph (3) in any form provided 
        under paragraph (2).
          ``(2) Forms.--A paystub required under this subsection shall 
        be a written statement and may be provided in any of the 
        following forms:
                  ``(A) As a separate document accompanying any payment 
                to an employee for work performed during the applicable 
                pay period.
                  ``(B) In the case of an employee who receives 
                paychecks from the employer, as a detachable statement 
                accompanying each paycheck.
                  ``(C) As a digital document provided through 
                electronic communication, subject to the employee 
                affirmatively consenting to receive the paystubs in 
                this form.
          ``(3) Contents.--Each paystub shall contain all of the 
        following information:
                  ``(A) The name of the employee.
                  ``(B) Except in the case of an employee who is 
                exclusively paid a salary and is exempt from the 
                overtime requirements of section 7, the total number of 
                hours worked by the employee, including the number of 
                hours worked per workweek, during the applicable pay 
                period.
                  ``(C) The total gross and net wages paid, and, except 
                in the case of an employee who is exclusively paid a 
                salary and is exempt from the overtime requirements of 
                section 7, the rate of pay for each hour worked during 
                the applicable pay period.
                  ``(D) In the case of an employee who is paid any 
                salary, the amount of any salary paid during the 
                applicable pay period.
                  ``(E) In the case of an employee employed at piece 
                rates, the number of piece rate units earned, the 
                applicable piece rates, and the total amount paid to 
                the employee per workweek for the applicable pay period 
                in accordance with such piece rates.
                  ``(F) The rate of pay per workweek of the employee 
                during the applicable pay period and an explanation of 
                the basis for such rate.
                  ``(G) The number of overtime hours per workweek 
                worked by the employee during the applicable pay period 
                and the compensation required under section 7 that is 
                provided to the employee for such hours.
                  ``(H) Any additional compensation provided to the 
                employee during the applicable pay period, with an 
                explanation of each type of compensation, including any 
                allowances or reimbursements such as amounts related to 
                meals, clothing, lodging, or any other item.
                  ``(I) Itemized deductions from the gross income of 
                the employee during the applicable pay period, and an 
                explanation for each deduction.
                  ``(J) The date that is the beginning of the 
                applicable pay period and the date that is the end of 
                such applicable pay period.
                  ``(K) The name of the employer and any other name 
                used by the employer to conduct business.
                  ``(L) The name and phone number of a representative 
                of the employer for contact purposes.
                  ``(M) Any additional information that the Secretary 
                reasonably requires to be included through notice and 
                comment rulemaking.
  ``(c) Model Disclosures and Pay Stub.--The Secretary shall prescribe 
model disclosures and a model pay stub that may be used to satisfy the 
requirements of subsections (a) and (b), respectively. The Secretary 
shall make the model disclosures and the model pay stub publicly 
available to employers.
  ``(d) Final Payments.--
          ``(1) In general.--Not later than 14 days after an individual 
        described in paragraph (4) terminates employment with an 
        employer (by action of the employer or the individual), or on 
        the date on which such employer pays other employees for the 
        pay period during which the individual so terminates such 
        employment, whichever date is earlier, the employer shall 
        provide the individual with a final payment, which includes all 
        compensation due to such individual for all time worked and 
        benefits incurred (including retirement, health, leave, fringe, 
        and other benefits) by the individual as an employee for the 
        employer.
          ``(2) Continuing wages.--An employer who violates the 
        requirement under paragraph (1) shall, for each day, not to 
        exceed 30 days, of such violation provide the individual 
        described in paragraph (4) with compensation at a rate that is 
        equal to the regular rate of compensation, as determined under 
        this Act, to which such individual was entitled when such 
        individual was an employee of such employer.
          ``(3) Limitation.--Notwithstanding paragraphs (1) and (2), an 
        individual described in paragraph (4) shall not be entitled to 
        the compensation described under paragraph (2) if the employer 
        successfully demonstrates that--
                  ``(A) the employer made a good-faith effort to 
                provide the final payment described in paragraph (1); 
                and
                  ``(B) the individual refused or otherwise 
                intentionally avoided receiving such final payment.
          ``(4) Individual.--An individual described in this paragraph 
        is an individual who was employed by the employer, and through 
        such employment, in any workweek, was engaged in commerce or in 
        the production of goods for commerce, or was employed in an 
        enterprise engaged in commerce or in the production of goods 
        for commerce.''.

SEC. 102. RIGHT TO FULL COMPENSATION.

  (a) In General.--The Fair Labor Standards Act of 1938 is amended by 
inserting after section 7 (29 U.S.C. 207) the following:

``SEC. 8. RIGHT TO FULL COMPENSATION.

  ``(a) In General.--In the case of an employment contract or other 
employment agreement, including a collective bargaining agreement, that 
specifies that an employer shall compensate an employee (who is 
described in subsection (b)) at a rate that is higher than the rate 
otherwise required under this Act, the employer shall compensate such 
employee at the rate specified in such contract or other employment 
agreement.
  ``(b) Employee Engaged in Commerce.--The requirement under subsection 
(a) shall apply with respect to any employee who in any workweek is 
engaged in commerce or in the production of goods for commerce, or is 
employed in an enterprise engaged in commerce or in the production of 
goods for commerce.''.
  (b) Conforming Amendment.--The Fair Labor Standards Act of 1938 is 
amended by repealing section 10 (29 U.S.C. 210).

SEC. 103. CIVIL AND CRIMINAL ENFORCEMENT.

  (a) Prohibited Acts.--Section 15(a) of the Fair Labor Standards Act 
of 1938 (29 U.S.C. 215(a)) is amended--
          (1) in paragraph (1), by striking ``section 6 or section 7'' 
        and inserting ``section 6, 7, or 8''; and
          (2) in paragraph (2), by striking ``section 6 or section 7'' 
        and inserting ``section 5, 6, 7, or 8''.
  (b) Damages.--The Fair Labor Standards Act of 1938 (29 U.S.C. 201 et 
seq.) is amended--
          (1) in section 4(f) (29 U.S.C. 204(f)), in the third 
        sentence, by striking ``for unpaid minimum wages, or unpaid 
        overtime compensation, and liquidated damages'' and inserting 
        ``for unpaid wages, or unpaid overtime compensation, as well as 
        interest and liquidated damages,'';
          (2) in section 6(d)(3) (29 U.S.C. 206(d)(3)), by striking 
        ``minimum'';
          (3) in section 16 (29 U.S.C. 216)--
                  (A) in subsection (b)--
                          (i) by striking ``section 6 or section 7'' 
                        each place it appears and inserting ``section 
                        6, 7, or 8'';
                          (ii) by striking ``minimum'' each place it 
                        appears;
                          (iii) in the first sentence, by striking 
                        ``and in an additional equal amount as 
                        liquidated damages'' and inserting ``the amount 
                        of any interest on such unpaid wages or unpaid 
                        overtime compensation accrued at the prevailing 
                        rate, and an additional amount as liquidated 
                        damages that is equal to (subject to the second 
                        sentence of this subsection) 2 times such 
                        amount of unpaid wages or unpaid overtime 
                        compensation'';
                          (iv) in the second sentence, by striking 
                        ``wages lost and an additional equal amount as 
                        liquidated damages'' and inserting ``wages 
                        lost, including any unpaid wages or any unpaid 
                        overtime compensation, the amount of any 
                        interest on such wages lost accrued at the 
                        prevailing rate, and an additional amount as 
                        liquidated damages that is equal to 3 times the 
                        amount of such wages lost'';
                          (v) by striking the fifth sentence; and
                          (vi) by adding at the end the following: 
                        ``Notwithstanding chapter 1 of title 9, United 
                        States Code (commonly known as the `Federal 
                        Arbitration Act'), or any other law, the right 
                        to bring an action, including a joint, class, 
                        or collective claim, in court under this 
                        section cannot be waived by an employee as a 
                        condition of employment or in a pre-dispute 
                        arbitration agreement.''; and
                  (B) in subsection (c)--
                          (i) by striking ``minimum'' each place the 
                        term appears;
                          (ii) in the first sentence--
                                  (I) by striking ``section 6 or 7'' 
                                and inserting ``section 6, 7, or 8''; 
                                and
                                  (II) by striking ``and an additional 
                                equal amount as liquidated damages'' 
                                and inserting ``, any interest on such 
                                unpaid wages or unpaid overtime 
                                compensation accrued at the prevailing 
                                rate, and an additional amount as 
                                liquidated damages that is equal to 
                                (subject to the third sentence of this 
                                subsection) 2 times such amount of 
                                unpaid wages or unpaid overtime 
                                compensation'';
                          (iii) in the second sentence, by striking 
                        ``and an equal amount as liquidated damages.'' 
                        and inserting ``, any interest on such unpaid 
                        wages or unpaid overtime compensation accrued 
                        at the prevailing rate, and an additional 
                        amount as liquidated damages that is equal to 
                        (subject to the third sentence of this 
                        subsection) 2 times such amount of unpaid wages 
                        or unpaid overtime compensation. In the event 
                        that the employer violates section 15(a)(3), 
                        the Secretary may bring an action in any court 
                        of competent jurisdiction to recover the amount 
                        of any wages lost, including any unpaid wages 
                        or any unpaid overtime compensation, any 
                        interest on such wages lost accrued at the 
                        prevailing rate, an additional amount as 
                        liquidated damages that is equal to 3 times the 
                        amount of such wages lost, and any such legal 
                        or equitable relief as may be appropriate.''; 
                        and
                          (iv) in the third sentence, by striking 
                        ``sections 6 and 7'' and inserting ``section 6, 
                        7, or 8''; and
          (4) in section 17 (29 U.S.C. 217), by striking ``minimum''.
  (c) Civil Fines.--Section 16(e) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 216(e)) is amended--
          (1) by striking paragraph (2) and inserting the following:
  ``(2)(A) Subject to subparagraph (B), any person who violates section 
6, 7, or 8, relating to wages, shall be subject to a civil fine that is 
not to exceed $22,030 per each employee affected for each initial 
violation of such section.
  ``(B) Any person who repeatedly or willfully violates section 6, 7, 
or 8, relating to wages, shall be subject to a civil fine that is not 
to exceed $110,150 per each employee affected for each such violation.
  ``(C) Any person who violates section 3(m)(2)(B) shall be subject to 
a civil penalty not to exceed $12,340 for each such violation, as the 
Secretary determines appropriate, in addition to being liable to the 
employee or employees affected for all tips unlawfully kept, any 
interest on wages lost accrued at the prevailing rate, and an 
additional amount as liquidated damages that is equal to 2 times the 
amount of wages lost, as described in subsection (b).'';
          (2) by redesignating paragraphs (3), (4), and (5) as 
        paragraphs (5), (6), and (7), respectively; and
          (3) by inserting after paragraph (2) the following:
  ``(3) Any person who violates subsection (a) or (b) of section 5 
shall--
          ``(A) for the initial violation of such subsection, be 
        subject to a civil fine that is not to exceed $50 per each 
        employee affected; and
          ``(B) for each repeated or willful violation of such 
        subsection, be subject to a civil fine that is not to exceed 
        $100 per each employee affected.
  ``(4) Any person who violates section 11(c) shall--
          ``(A) for the initial violation, be subject to a civil fine 
        that is not to exceed $1,000 per each employee affected; and
          ``(B) for each repeated or willful violation, be subject to a 
        civil fine that is not to exceed $5,000 per each employee 
        affected.''.
  (d) Criminal Penalties.--Section 16(a) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 216(a)) is amended--
          (1) by striking ``Any person'' and inserting ``(1) Any 
        person'';
          (2) in the first sentence, by striking ``$10,000'' and 
        inserting ``$10,000 per each employee affected'';
          (3) in the second sentence, by striking ``No person'' and 
        inserting ``Subject to paragraph (2), no person''; and
          (4) by adding at the end the following:
  ``(2)(A) Notwithstanding any other provision of this Act, the 
Secretary shall refer any case involving a covered offender described 
in subparagraph (B) to the Department of Justice for prosecution.
  ``(B) A covered offender described in this subparagraph is a person 
who willfully violates any of the following:
          ``(i) Section 11(c) by falsifying any records described in 
        such section.
          ``(ii) Section 6, 7, or 8, relating to wages.
          ``(iii) Section 15(a)(3).''.

SEC. 104. RECORDKEEPING.

  (a) In General.--Section 11(c) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 211(c)) is amended by adding at the end the following: 
``In the event that an employee requests an inspection of the records 
described in this subsection that pertain to such employee from the 
employer, orally or in writing, the employer shall provide the employee 
with a copy of the records for a period of up to 5 years prior to such 
request being made. Not later than 21 days after an employee requests 
such an inspection, the employer shall comply with the request.''.
  (b) Rebuttable Presumption.--Section 15 of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 215) is amended by adding at the end the 
following:
  ``(c) In the event that an employer violates section 11(c) and any 
regulations issued pursuant to such section, resulting in a lack of a 
complete record of an employee's hours worked or wages owed, the 
employee's production of credible evidence and testimony regarding the 
amount or extent of the work for which the employee was not compensated 
in compliance with the requirements under this Act shall be sufficient 
to create a rebuttable presumption that the employee's records are 
accurate. Such presumption shall be rebutted only if the employer 
produces evidence of the precise amount or extent of work performed or 
evidence to show that the inference drawn from the employee's evidence 
is not reasonable.''.

        TITLE II--AMENDMENTS TO THE PORTAL-TO-PORTAL ACT OF 1947

SEC. 201. INCREASING AND TOLLING STATUTE OF LIMITATIONS.

  Section 6 of the Portal-to-Portal Act of 1947 (29 U.S.C. 255) is 
amended--
          (1) in the matter preceding paragraph (a), by striking 
        ``minimum'';
          (2) in paragraph (a)--
                  (A) by striking ``may be commenced within two years'' 
                and inserting ``may be commenced within 4 years'';
                  (B) by striking ``unless commenced within two years'' 
                and inserting ``unless commenced within 4 years''; and
                  (C) by striking ``may be commenced within three 
                years'' and inserting ``may be commenced within 5 
                years'';
          (3) in paragraph (d), by striking the period and inserting 
        ``; and''; and
          (4) by adding at the end the following:
          ``(e) with respect to the running of any statutory period of 
        limitation described in this section, the running of such 
        statutory period shall be deemed suspended during the period 
        beginning on the date on which the Secretary of Labor notifies 
        an employer of an initiation of an investigation or enforcement 
        action and ending on the date on which the Secretary notifies 
        the employer that the matter has been officially resolved by 
        the Secretary.''.

    TITLE III--WAGE THEFT PREVENTION AND WAGE RECOVERY GRANT PROGRAM

SEC. 301. DEFINITIONS.

  In this title:
          (1) Community partner.--The term ``community partner'' means 
        any stakeholder with a commitment to enforcing wage and hour 
        laws and preventing abuses of such laws, including any--
                  (A) State department of labor;
                  (B) attorney general of a State, or other similar 
                authorized official of a political subdivision thereof;
                  (C) law enforcement agency;
                  (D) consulate;
                  (E) employee or advocate of employees, including a 
                labor organization, community-based organization, 
                faith-based organization, business association, or 
                nonprofit legal aid organization;
                  (F) academic institution that plans, coordinates, and 
                implements programs and activities to prevent wage and 
                hour violations and recover unpaid wages, damages, and 
                penalties; or
                  (G) any municipal agency responsible for the 
                enforcement of local wage and hour laws.
          (2) Community partnership.--The term ``community 
        partnership'' means a partnership between--
                  (A) a working group consisting of community partners; 
                and
                  (B) the Department of Labor.
          (3) Eligible entity.--The term ``eligible entity'' means an 
        entity that is any of the following:
                  (A) A nonprofit organization, including such an 
                organization that is a community-based organization, 
                faith-based organization, or labor organization, that 
                provides services and support to employees, including 
                assisting such employees in recovering unpaid wages.
                  (B) An employer.
                  (C) A business association.
                  (D) An institution of higher education, as defined by 
                section 101(a) of the Higher Education Act of 1965 (20 
                U.S.C. 1001(a)).
                  (E) A partnership between any of the entities 
                described in subparagraphs (A) through (D).
          (4) Employ; employee; employer.--The terms ``employ'', 
        ``employee'', and ``employer'' have the meanings given such 
        terms in section 3 of the Fair Labor Standards Act of 1938 (29 
        U.S.C. 203).
          (5) Secretary.--The term ``Secretary'' means the Secretary of 
        Labor.
          (6) Wage and hour law.--The term ``wage and hour law'' means 
        any Federal law enforced by the Wage and Hour Division of the 
        Department of Labor, including any provision of this Act 
        enforced by such division.
          (7) Wage and hour violation.--The term ``wage and hour 
        violation'' refers to any violation of a Federal law enforced 
        by the Wage and Hour Division of the Department of Labor, 
        including any provision of this Act enforced by such division.

SEC. 302. WAGE THEFT PREVENTION AND WAGE RECOVERY GRANT PROGRAM.

  (a) In General.--The Secretary shall provide grants to eligible 
entities to assist amployees and employers.
  (b) Grants.--A grant provided under this section shall be designed 
to--
          (1) support an eligible entity in establishing and supporting 
        the activities described in subsection (c)(1); and
          (2) develop community partnerships to expand and improve 
        cooperative efforts to--
                  (A) prevent and reduce wage and hour violations;
                  (B) assist employees in recovering back pay for any 
                such violations; and
                  (C) assist employers in complying with wage and hour 
                laws.
  (c) Use of Funds.--The grants described in this section shall assist 
eligible entities in establishing and supporting activities that 
include--
          (1) disseminating information and conducting outreach and 
        training to educate employees about their rights under wage and 
        hour laws;
          (2) conducting educational and compliance training for 
        employers about their obligations under wage and hour laws;
          (3) providing assistance to employees in filing claims of 
        wage and hour violations; and
          (4) any other activities as the Secretary may reasonably 
        prescribe through notice and comment rulemaking.
  (d) Term of Grants.--Each grant made under this section shall be 
available for expenditure for a period that is not to exceed 3 years.
  (e) Applications.--
          (1) In general.--An eligible entity seeking a grant under 
        this section shall submit an application for such grant to the 
        Secretary in accordance with this subsection.
          (2) Partnerships.--In the case of an eligible entity that is 
        a partnership described in section 301(4)(E), the eligible 
        entity may submit a joint application that designates a single 
        entity as the lead entity for purposes of receiving and 
        disbursing funds.
          (3) Contents.--An application under this subsection shall 
        include--
                  (A) a description of a plan for the program that the 
                eligible entity proposes to carry out with a grant 
                under this section, including a long-term strategy and 
                detailed implementation plan that reflects expected 
                participation of, and partnership with, community 
                partners;
                  (B) information on the prevalence of wage and hour 
                violations in each community or State the eligible 
                entity proposes to serve;
                  (C) information on any industry or geographic area 
                targeted by the plan for such program;
                  (D) information on the type of outreach and 
                relationship building that will be conducted under such 
                program;
                  (E) information on the training and education that 
                will be provided to employees and employers under such 
                program; and
                  (F) any additional information the Secretary deems 
                relevant.
  (f) Selection.--
          (1) Competitive basis.--In accordance with this subsection, 
        the Secretary shall, on a competitive basis, select grant 
        recipients from among eligible entities that have submitted an 
        application under subsection (e).
          (2) Priority.--In selecting grant recipients under paragraph 
        (1), the Secretary shall give priority to eligible entities 
        that--
                  (A) serve employees or employers in any industry or 
                geographic area that is most highly at risk for 
                noncompliance with wage and hour violations, as 
                identified by the Secretary; and
                  (B) demonstrate past and ongoing work to prevent wage 
                and hour violations or to recover unpaid wages.
  (g) Memoranda of Understanding.--
          (1) In general.--Not later than 60 days after receiving 
        notification of selection for a grant under this section, the 
        grant recipient shall negotiate and finalize with the Secretary 
        a memorandum of understanding that sets forth specific goals, 
        objectives, strategies, and activities that will be carried out 
        under the grant by such recipient through a community 
        partnership.
          (2) Signatures.--A representative of the grant recipient (or, 
        in the case of a grant recipient that is an eligible entity 
        described in section 301(4)(E), a representative of each entity 
        that composes the grant recipient) and the Secretary shall sign 
        the memorandum of understanding under this subsection.
          (3) Revisions.--The memorandum of understanding under this 
        subsection shall be reviewed and revised by the grant recipient 
        and the Secretary each year for the duration of the grant.
  (h) Performance Evaluations.--The Secretary shall develop guidelines 
for evaluating the activities of each program or project funded under 
this section.
  (i) Revocation or Suspension of Funding.--If the Secretary determines 
that a recipient of a grant under this section is not in compliance 
with the terms and requirements of the memorandum of understanding 
under subsection (g), the Secretary may revoke or suspend (in whole or 
in part) the funding of the grant.

SEC. 303. AUTHORIZATION OF APPROPRIATIONS.

  There is authorized to be appropriated $50,000,000 for fiscal year 
2023 and for each subsequent fiscal year through fiscal year 2026, to 
remain available until expended, to carry out the grant program under 
section 302.

   TITLE IV--RELATION TO OTHER LAWS, REGULATIONS, AND EFFECTIVE DATE

SEC. 401. RELATION TO OTHER LAWS.

  (a) In General.--Section 18(a) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 218(a)) is amended by adding at the end the following: 
``The requirements of section 5 shall not preempt or supercede any 
requirement under State or local law that an employer disclose the 
rate, frequency, or classification of pay at any time during an 
individual's employ, or that an employer provide regular paystubs or 
earnings statements to employees, so long as such requirement is at 
least as comprehensive as the requirements described under such 
section.''.
  (b) Assistance to Employers.--The Secretary of Labor shall provide 
such assistance to employers operating in more than one State as may be 
necessary to ensure compliance with the amendments made by this Act.

SEC. 402. REGULATIONS.

  Not later than 18 months after the date of enactment of this Act, the 
Secretary of Labor shall promulgate such regulations as are necessary 
to carry out this Act and the amendments made by this Act.

SEC. 403. EFFECTIVE DATE.

  The amendments made by titles I and II shall take effect on the date 
that is the earlier of--
          (1) the date that is 6 months after the date on which the 
        final regulations are promulgated by the Secretary of Labor 
        under section 401; or
          (2) the date that is 18 months after the date of enactment of 
        this Act.

                          Purpose and Summary

    The purpose of H.R. 7701, the Wage Theft Prevention and 
Wage Recovery Act of 2022 (Wage Theft Act), is to protect 
workers and law-abiding businesses. It does so by amending the 
Fair Labor Standards Act (FLSA) and Portal-to-Portal Act to 
require employers covered by the FLSA to provide regular 
paystubs and access to employment records to their workers; 
increasing maximum civil monetary penalties and damages to 
fully compensate workers for and deter wage violations; 
allowing workers to recover full back wages under the FLSA 
rather than only up to the federal minimum wage; prohibiting 
the use of mandatory arbitration and collective action waivers 
in employment agreements; increasing the statute of limitations 
so workers have additional time to bring wage claims; and 
establishing a grant program to educate workers about their 
rights under wage and hour laws, help employers comply with 
those laws, and provide assistance to employees in filing 
claims for wage and hour violations.
    The Wage Theft Act has been endorsed by the National 
Employment Law Project (NELP), Economic Policy Institute (EPI), 
AFL-CIO, Service Employees International Union (SEIU), 
International Brotherhood of Teamsters, American Federation of 
State, County and Municipal Employees (AFSCME), American 
Federation of Teachers (AFT), Transport Workers Union (TWU), 
United Mineworkers of America (UMWA), United Food and 
Commercial Workers International Union (UFCW), International 
Association of Machinists and Aerospace Workers (IAM), American 
Federation of Government Employees (AFGE), Kalmanovitz 
Initiative for Labor & the Working Poor at Georgetown 
University, Main Street Alliance, National Women's Law Center 
(NWLC), TakeRoot Justice, Jewish Labor Committee, Arise 
Chicago, Faith Action for All, Reconstructionist Rabbinical 
Association, T'ruah: The Rabbinic Call for Human Rights, and 
Disciples Center for Public Witness (Disciples of Christ).

                            Committee Action


                             114TH CONGRESS

    On January 13, 2016, Rep. Robert C. ``Bobby'' Scott (D-VA-
3) introduced H.R. 4376, the Pay Stub Disclosure Act. H.R. 4376 
was referred to the Committee on Education and the Workforce.
    On March 16, 2016, Rep. Rosa DeLauro (D-CT-3) introduced 
H.R. 4763, the Wage Theft Prevention and Wage Recovery Act. 
H.R. 4763 was referred to the Committee on Education and the 
Workforce.

                             115TH CONGRESS

    On July 27, 2017, Rep. DeLauro introduced H.R. 3467, the 
Wage Theft Prevention and Wage Recovery Act. H.R. 3467 was 
referred to the Committee on Education and the Workforce.

                             116TH CONGRESS

    On July 11, 2019, Rep. DeLauro introduced H.R. 3712, the 
Wage Theft Prevention and Wage Recovery Act. H.R. 3712 was 
referred to the Committee on Education and Labor.

                             117TH CONGRESS

    On May 10, 2022, Rep. DeLauro introduced H.R. 7701, the 
Wage Theft Prevention and Wage Recovery Act. H.R. 7701 was 
referred to the Committee on Education and Labor.
    On May 11, 2022, the Committee on Education and Labor's 
(Committee) Subcommittee on Workforce Protections held a 
hearing entitled ``Standing Up for Workers: Preventing Wage 
Theft and Recovering Stolen Wages'' (May 11th Hearing). The 
witnesses were: Ms. Karen Cacace, Labor Bureau Chief, New York 
State Office of the Attorney General, New York, NY; Mr. 
Francisco Esparza, Representative, United Brotherhood of 
Carpenters, Upper Marlboro, MD; Ms. Tammy McCutchen, Senior 
Affiliate, Resolution Economics, Washington, DC; and Mr. Daniel 
Swenson-Klatt, Owner, Butter Bakery Cafe, Minneapolis, MN. The 
Committee heard testimony on how stronger state wage and hour 
law provisions could serve as examples to improve the FLSA, the 
harmful impact the wage theft crisis is having on workers, and 
how honest businesses are left at a competitive disadvantage 
when unscrupulous employers do not pay workers what they are 
owed.
    On May 18, 2022, the Committee marked up H.R. 7701. An 
Amendment in the Nature of a Substitute (ANS) was offered by 
Rep. Alma Adams (D-NC-12) that incorporated the provisions of 
H.R. 7701, as introduced, and made the following modifications:
           requires the Secretary of Labor (Secretary) 
        to prescribe model disclosures and pay stubs and make 
        them publicly available to employers;
           narrows and clarifies the Wage Theft 
        Prevention and Wage Recovery Grant Program established 
        in section 302 of the bill;
           eliminates the Government Accountability 
        Office (GAO) study that would review the Wage Theft 
        Prevention and Wage Recovery Grant Program;
           ensures state laws that are more 
        comprehensive than those established in the bill are 
        not preempted;
           directs the Department of Labor (DOL) to 
        provide compliance assistance to employers operating in 
        more than one state; and
           makes technical and clarifying changes.
    Four amendments to the ANS were offered:
           Rep. Fred Keller (R-PA-12) offered an 
        amendment specifying that, for the purposes of the 
        bill's pay stub, disclosure requirements, and right to 
        full compensation provisions, the nature and degree of 
        an individual's control over his or her work and the 
        opportunity to earn profits or incur losses based on 
        individual initiative are core factors in determining a 
        worker's classification as an employee or independent 
        contractor. The amendment was defeated by a vote of 19 
        Yeas and 27 Nays.
           Rep. Bob Good (R-VA-5) offered an amendment 
        exempting employers with either fewer than 10 employees 
        or annual sales under $1,000,000 from the bill's 
        increased civil penalties. The amendment was defeated 
        by a vote of 19 Yeas and 27 Nays.
           Rep. James Comer (R-KY-1) offered an 
        amendment specifying that, for the purposes of the 
        bill's pay stub, disclosure requirements, and right to 
        full compensation provisions, employers may only be 
        considered a joint employer of another employer's 
        employee when the initial employer directly, actually, 
        and immediately exercises significant control over the 
        employee's essential terms and conditions of 
        employment. The amendment was defeated by a vote of 19 
        Yeas and 27 Nays.
           Rep. Mariannette Miller-Meeks (R-IA-2) 
        offered a substitute amendment striking the text of the 
        ANS and inserting the text of H.R. 5743, the Ensuring 
        Workers Get PAID Act of 2021, which codifies the Trump 
        Administration's Payroll Audit Independent 
        Determination (PAID) program. The amendment was 
        defeated by a vote of 17 Yeas and 27 Nays.
    The ANS was adopted by voice vote. The Committee ordered 
H.R. 7701 to be reported favorably, as amended, to the House of 
Representatives by a vote of 27 Yeas and 19 Nays.

                            Committee Views

    The Committee has jurisdiction over federal wage and hour 
laws and a history of advancing consequential legislation in 
this area.

  WAGE THEFT IS A MULTI-BILLION DOLLAR CRISIS THAT DISPROPORTIONATELY 
         IMPACTS LOW-WAGE WORKERS, WOMEN, AND WORKERS OF COLOR

    Wage theft is the failure to pay workers the full amount of 
wages for which they are legally entitled.\1\ Wage theft occurs 
in various ways, including paying workers less than the legal 
minimum wage, failing to pay for hours in excess of a 40-hour 
work week, making employees work off-the-clock, taking illegal 
deductions from wages, and confiscating tips.\2\ Wage theft is 
a multi-billion-dollar problem.\3\ Each year, employers steal 
at least $15 billion from workers' paychecks in minimum wage 
violations alone,\4\ with all forms of wage theft possibly 
exceeding $50 billion annually in stolen compensation.\5\ 
Dollar-for-dollar, wage theft is larger than all forms of 
property crime combined.\6\
---------------------------------------------------------------------------
    \1\David Cooper & Teresa Kroeger, Econ. Pol'y Inst., Employers 
steal billions from workers' paychecks each year 7 (2017), https://
www.epi.org/publication/employers-steal-
billions-from-workers-paychecks-each-year/.
    \2\Id. at 4.
    \3\Celine Mcnicholas et al., Econ. Pol'y Inst., Two billion dollars 
in stolen wages were recovered for workers in 2015 and 2016--and that's 
just a drop in the bucket 3 (2017), https://files.epi.org/pdf/
138995.pdf.
    \4\Cooper & Kroeger, supra note 1 at 2.
    \5\Mcnicholas et al., supra note 3 at 3.
    \6\See Jeff Spross, One of the biggest crime waves in America isn't 
what you think it is, The Week (Aug. 16, 2016), https://theweek.com/
articles/642568/biggest-crime-waves-america-isnt-what-think.
---------------------------------------------------------------------------
    Wage theft disproportionately hurts lower paid and 
vulnerable segments of the workforce, as 17% of low-wage 
workers report being paid less than their state's minimum 
wage.\7\ In the service industry, 35% of tipped workers report 
being paid below their state's minimum wage, and 47% say they 
are not being compensated for time-and-a-half overtime work.\8\ 
In one recent example in New Hampshire, the DOL found that two 
restaurants--operating under the same name in two different 
cities--along with a general manager stole over $445,000 in 
wages from their workers through their failure to pay overtime 
and wages at or above the minimum wage rate.\9\
---------------------------------------------------------------------------
    \7\Id. at 9.
    \8\One Fair Wage & U.C. Berkeley Food Labor Rsch. Ctr., No Rights, 
Low Wages, No Service 2 (2021), https://onefairwage.site/wp-content/
uploads/2021/09/OFW_NationalWageTheft_
UpdatedPhoto-1.pdf.
    \9\Dep't of Labor, Two New Hampshire restaurants to pay $890K in 
back wages, damages to 63 employees after US Department of Labor 
investigation, litigation, (April 25, 2022) https://www.dol.gov/
newsroom/releases/whd/whd20220425.
---------------------------------------------------------------------------
    Minimum wage violations also disproportionately impact 
women and workers of color.\10\ 55% of wage theft victims are 
women despite making up 46.6% of the total minimum wage 
eligible workforce.\11\ 52.9% of wage theft victims are workers 
of color despite constituting 44.3% of the minimum wage 
eligible workforce.\12\
---------------------------------------------------------------------------
    \10\Cooper & Kroeger, supra note 1 at 15-16.
    \11\Id. at 17.
    \12\Id. at 19. Overall, minimum wage violations affect 4.9% of 
Black and 5.1% of Hispanic workers generally compared to 3.5% of White 
workers. Id.
---------------------------------------------------------------------------
    Workers in poverty are also disproportionately affected by 
the wage theft crisis. Workers who are victims of a minimum 
wage violation are ``more than three times as likely to be in 
poverty as someone chosen at random in the eligible 
workforce.''\13\ Reducing wage theft would have the additional 
benefit of poverty reduction:
---------------------------------------------------------------------------
    \13\Cooper & Kroeger, supra note 1 at 14.

          If all workers experiencing minimum wage violations 
        were paid the applicable minimum wage for all reported 
        hours worked, it would lift 31 percent of those in 
        poverty above the poverty line. Consequently, the 
        poverty rate among these workers would fall from 21.4 
        percent to 14.8 percent, and the overall poverty rate 
        among the minimum-wage-eligible workforce would decline 
        from 6.9 percent to 6.6 percent.\14\
---------------------------------------------------------------------------
    \14\Id.

    At the May 11th Hearing, Mr. Esparza shared his own 
experience as a victim of wage theft and now as an organizer 
helping other workers who have experienced wage theft. Mr. 
---------------------------------------------------------------------------
Esparza stated:

          [W]e see wage theft, worker misclassification, and 
        construction industry tax fraud running rampant in the 
        underground economy. The actions workers have taken [to 
        recover wages] have not deterred unscrupulous 
        contractors and labor brokers from stealing wages on 
        the most vulnerable workers so that they can profit 
        more. These profits are not only on the backs of the 
        workers they victimize, but the honest U.S. taxpayers, 
        like me.\15\
---------------------------------------------------------------------------
    \15\Standing Up for Workers: Preventing Wage Theft and Recovering 
Stolen Wages, Hearing Before the Subcomm. on Worker Protections of the 
H. Comm. on Educ. and Lab., 117th Cong. (2022) (Statement of Francisco 
Esparza, Representative, United Brotherhood of Carpenters, at 2).
---------------------------------------------------------------------------

CURRENT CIVIL PENALTIES AND DAMAGES FAIL TO DETER WAGE THEFT VIOLATIONS

    Although practices such as failure to pay minimum wage and 
overtime for all hours worked are already illegal under the 
FLSA,\16\ the law's penalties and damages provisions fail to 
deter wage theft. Furthermore, employers use a variety of legal 
loopholes to evade full accountability. In effect, dishonest 
employers can exploit current law to steal workers' wages and 
use those savings on labor costs to offer below-market rates 
for their products and services and pay minor penalties in the 
rare circumstances that they are caught. As a result, 
unscrupulous employers gain an edge over their law-abiding 
competitors. As noted in Mr. Swenson-Klatt's written testimony 
for the May 11th Hearing, these illegal actions are a 
``profitable practice [for low road employers] that hurts small 
businesses like mine by creating an unfair playing field in a 
competitive market.''\17\
---------------------------------------------------------------------------
    \16\Fair Labor Standards Act of 1938, Pub. L. No. 75-718, 52 Stat. 
1060, 29 U.S.C. Sec. 201 etseq.
    \17\Standing Up for Workers: Preventing Wage Theft and Recovering 
Stolen Wages, Hearing Before the Subcomm. on Worker Protections of the 
H. Comm. on Educ. and Lab., 117th Cong. (2022) (Statement of Daniel 
Swenson-Klatt, Owner/Operator, Butter Bakery Cafe, at 3).
---------------------------------------------------------------------------
    Currently, the FLSA's maximum civil monetary penalties for 
wage theft are just $2,203, and penalties are only assessed for 
repeated or willful violations.\18\ Only employers that fail to 
pay their tipped workers can face a penalty for an initial 
violation, and the maximum penalty is only $1,234.\19\ 
Additionally, there are no civil monetary penalties for 
recordkeeping violations.\20\ Meanwhile, according to a 2017 
study conducted by the Economic Policy Institute (EPI), on 
average, hourly workers who are victims of wage theft lost 25 
percent of their annual earnings, or $3,300, in stolen 
wages.\21\ According to Jenn Round, who is a fellow at the 
Center for Innovation in Worker Organization at Rutgers 
University, ``Some companies are doing a cost-benefit analysis 
and realize it's cheaper to violate the law, even if you get 
caught.''\22\
---------------------------------------------------------------------------
    \18\FLSA statutory language sets the original penalty amount at 
$1,100, but the DOL has updated the penalty amount for inflation via 
federal regulation. See 87 Fed. Register 2335 (Jan. 14, 2022); 29 CFR 
578.3.
    \19\Id.
    \20\See 29 U.S.C. Sec. Sec.  211, 216.
    \21\Cooper & Kroeger, supra note 1 at 1.
    \22\U.S. companies are stealing pay from low-wage workers, report 
says, CBS NEWS (May 4, 2021), https://www.cbsnews.com/news/wage-theft-
us-companies-workers/ (quoting Jenn Round, Fellow at Center for 
Innovation in Worker Organization at Rutgers University).
---------------------------------------------------------------------------
    Unfortunately, this is a decades-old problem. In 1981, the 
General Accounting Office\23\ concluded that ``many employers 
appear to have willfully violated the [FLSA] and that current 
enforcement actions have not resulted in penalties that would 
deter these violations.''\24\ Ms. Karen Cacace, the Labor 
Bureau Chief for the New York State Office of Attorney General, 
also noted the inadequacy of current civil penalties under the 
FLSA in her testimony at the May 11th Hearing, stating that:
---------------------------------------------------------------------------
    \23\In 2004, the U.S. General Accounting Office became the U.S. 
Government Accountability Office--maintaining the same initials (GAO)--
following the enactment of the GAO Human Capital Reform Act of 2004, 
P.L. 108-271. See Cong. Research Serv., GAO: Government Accountability 
Office and General Accounting Office, at 1 (2008).
    \24\U.S. Gov't Accountability Off., GAO-18276, Changes Needed To 
Deter Violations Of Fair Labor Standards Act, at iii (1981).

          Increasing penalties overall may be the most 
        effective method of deterring employers from violating 
        the substantive provisions of the FLSA. For many 
        employers, the cost of having to pay their employees 
        once a wage theft claim is filed is not significant 
        enough to deter them from violating the law.\25\
---------------------------------------------------------------------------
    \25\Standing Up for Workers: Preventing Wage Theft and Recovering 
Stolen Wages, Hearing Before the Subcomm. on Worker Protections of the 
H. Comm. on Educ. and Lab., 117th Cong. (2022) (Statement of Karen 
Cacace, Labor Bureau Chief, New York State Office of the Attorney 
General, at 3).

    The FLSA's damages provisions are also inadequate at 
deterring wage theft. Currently, employers found liable for 
unpaid wages and overtime are only required to pay an ``equal'' 
amount as liquidated damages, which are additional damages 
awarded to reflect the harm of the violation.\26\ Because an 
employee can only recover the federal minimum wage in an action 
under the FLSA, their back wages and equal damages are often 
less than the amount of actual back wages stolen from the 
employee, reducing the incentive to even bring a claim.\27\ To 
illustrate, under current federal law, a worker earning $15 per 
hour who is a victim of wage theft could only collect her back 
wages at the federal minimum wage rate of $7.25 per hour. 
Combined with an award of an equal amount in liquidated 
damages, which is another $7.25 per hour worked, the worker 
would recover a total of $14.50 per hour in back wages, meaning 
she would still recover less than her full hourly wage. In 
practical terms, that means it can be more cost effective for a 
dishonest employer to fail to pay a worker her wages and get 
caught then to actually pay a worker the wages she is owed.
---------------------------------------------------------------------------
    \26\29 U.S.C. Sec. 216(b).
    \27\Daniel J. Galvin, Deterring Wage Theft: Alt-Labor, State 
Politics, and the Policy Determinants of Minimum Wage Compliance, 14 
Perspectives on Politics 324, 338 (2016).
---------------------------------------------------------------------------
    In his testimony at the May 11th Hearing, Mr. Swenson-Klatt 
shared his own frustration as a business owner who realized 
that the current penalties and damages for wage theft 
violations do little to deter bad actors:

          [L]arge corporate chains were willing to encourage 
        wage theft practices knowing that in nearly all states, 
        the restitution was limited to the federal minimum 
        wage. Because that wage is lower than most state 
        levels, they would come out ahead even when they were 
        caught and lost the battle.\28\
---------------------------------------------------------------------------
    \28\Statement of Daniel Swenson-Klatt, supra note 17 at 3.
---------------------------------------------------------------------------

CURRENT FEDERAL LAW FAILS TO GUARANTEE WORKERS RIGHTS TO THEIR PAYSTUBS 
                    AND ACCESS TO THEIR PAY RECORDS

    Under current law, there is no requirement that employers 
provide regular paystubs or earning statements to their 
workers. As a result, employees can work for employers for 
years and never fully understand their rate of pay, which 
deductions are being made from their pay, or whether they are 
being fully compensated for all their hours worked, including 
overtime. Also, although current law requires employers to keep 
payroll records, there is no provision for how many years such 
records should be maintained or if employees can have access to 
their records. Moreover, there are no civil monetary penalties 
for violating this recordkeeping provision. In his testimony at 
the May 11th Hearing, Mr. Swenson-Klatt shared that for honest 
employers, providing regular and accurate pay records ``isn't a 
burden, it's simply a necessary task. Your [congressional] 
efforts to help define what that [records] should include is 
helpful for both employee and employer, not harmful.''\29\ 
Unscrupulous employers, however, currently face no consequences 
if they provide no records at all to an employee.
---------------------------------------------------------------------------
    \29\Id. at 4.
---------------------------------------------------------------------------
    Considering there are no penalties for recordkeeping 
violations and no requirements to provide employees with pay 
stubs, employers have little legal incentive to maintain 
accurate records. Adequate records are essential to determine 
whether employers are complying with the FLSA and if wages are 
being illegally withheld.\30\ Without adequate records, workers 
are unlikely to be able to prove wage theft claims in 
court.\31\ Employers' recordkeeping violations can become their 
own best defense to a wage theft claim.\32\
---------------------------------------------------------------------------
    \30\Gao Report, supra note 25 at 12-13.
    \31\Id. at 13, 17.
    \32\Id. at 13, 17.
---------------------------------------------------------------------------

    MANDATORY ARBITRATION AND CLASS ACTION WAIVERS LIMIT WAGE THEFT 
                       VICTIMS' ACCESS TO JUSTICE

    Under current law, employment contracts can include 
mandatory arbitration agreements and class action waivers as a 
condition of employment. The FLSA does not bar these sorts of 
waivers, which have a harmful impact on workers. For example, 
in 2019, Quincy Reeves, a janitor in Connecticut, attempted to 
bring a class action with his coworkers against his employer 
for unpaid wages. However, Mr. Reeves discovered he had waived 
his right to pursue a class action and had to utilize a closed-
door arbitration process. Mr. Reeves accumulated nearly $4,000 
in arbitration fees, and when he disclosed he would be unable 
to pay these fees, largely in part due to his monthly salary of 
$1,800, the assigned arbitrator closed his case with no 
resolution.\33\
---------------------------------------------------------------------------
    \33\Susan Antila, Forced Arbitration Is Making It Harder for Low-
Wage Workers to Seek Justice, Capital & Main, (May 2, 2022), https://
capitalandmain.com/how-forced-arbitration-is-
making-it-harder-for-low-wage-workers-to-seek-justice.
---------------------------------------------------------------------------
    As of 2019, nearly 18 million workers making less than $13 
per hour had a mandatory arbitration clause in their employment 
contract.\34\ Of these workers, it is estimated that more than 
one-in-four were victims of wage theft--4.6 million workers--
and less than 2% were likely to bring a claim for 
arbitration.\35\ If the 4.52 million workers who were unlikely 
to bring a claim are owed an average of $2,050 in total unpaid 
wages and damages, they will lose in aggregate an estimated 
$9.27 billion in compensation each year.\36\
---------------------------------------------------------------------------
    \34\Hugh Baran & Elisabeth Campbell, Nat'l Emp. L. Project, Forced 
Arbitration Helped Employers Who Committed Wage Theft Pocket $9.2 
Billion in 2019 From Workers In Low-Paid Jobs 1 (2021), https://
s27147.pcdn.co/wp-content/uploads/Data-Brief-Forced-
Arbitration-Wage-Theft-Losses-June-2021.pdf.
    \35\Cynthia Estlund, The Black Hole of Mandatory Arbitration, 96 
N.C. L. Rev. 679, 696-97 (2018).
    \36\According to Fiscal Year 2019 estimates by the DOL, wage theft 
victims were owed $1,025 in back wages, and under current law those 
workers would also be eligible for $1,025 in liquidated damages, 
together totaling $2,050 per worker. Baran & Campbell, supra note 34 at 
5.
---------------------------------------------------------------------------

   FEDERAL LEGISLATIVE ACTION IS NECESSARY TO ADDRESS THE WAGE THEFT 
                                 CRISIS

    Current federal law fails to fully protect the wages 
workers are owed and dishonest businesses who steal workers' 
wages are exploiting weaknesses in the law to gain an unfair 
advantage in the market. Federal legislation strengthening 
existing wage and hour protections and expanding every worker's 
right to information about his or her pay is critical to ensure 
every worker receives the pay he or she is owed and to hold bad 
employers accountable.
    To achieve these goals, the Wage Theft Prevention and Wage 
Recovery Act of 2022 will:
           require employers to provide periodic paper 
        copy or digital (per employees' consent) pay stubs. Pay 
        stubs will encompass the range of pay rate, period, 
        overtime, and deduction information required for 
        employees to accurately verify their net pay;
           require employers to maintain pay stub 
        records for 5 years and provide such records to 
        employees within 21-days of an employee's request;
           establish new penalties for employers who 
        violate recordkeeping requirements: $1,000 for an 
        initial violation and $5,000 for repeated or willful 
        violations;
           establish a grant program at the DOL to 
        educate workers about their rights under wage and hour 
        laws, help employers comply with those laws, and 
        provide assistance to employees in filing claims for 
        wage and hour violations. This grant program is 
        authorized at $50 million per year for Fiscal Years 
        2023-2026;
           include triple damages for wage and hour 
        violations and quadruple damages for employer 
        retaliation;
           update maximum civil monetary penalties to 
        $22,030 for initial wage and hour violations, $110,150 
        for repeated or willful wage and hour violations, 
        $12,340 for tipped wage violations, and $100 per 
        employee per each occurrence of the employer's failure 
        to provide the employee proper pay stubs or 
        disclosures;
           revise the FLSA so that workers are entitled 
        to recover all wages promised to them in their 
        employment contracts in a successful action against 
        employers for back wages, rather than only back wages 
        at the federal minimum wage rate;
           prohibit class action waivers and mandatory 
        arbitration for wage theft claims;
           codify the rebuttable presumption 
        established in common law that if employers are unable 
        to produce payroll records, the employees' proffered 
        payroll records are deemed accurate; and
           increase statute of limitation periods for 
        FLSA claims from two years to four years for common 
        violations and three years to five years for willful 
        violations.

                               CONCLUSION

    Wage theft is a rampant and insidious problem that costs 
workers billions of dollars a year and puts honest businesses 
at a competitive disadvantage as dishonest employers can boost 
profits by paying workers less than they are owed. The Wage 
Theft Act is a responsible solution that will help workers 
reclaim every dollar they are owed, more effectively deter bad 
actors from violating the law, and level the playing field for 
high-road employers. In the words of Mr. Esparza at the May 
11th Hearing:

          Congress must act so that Wage Theft Prevention and 
        Wage Recovery Act is made law. Your actions to 
        strengthening penalties on violators, improving workers 
        ability to pursue wage theft claims, expand outreach to 
        workers and businesses on the issues, and facilitate 
        the collection of evidence to assist in enforcement can 
        help a worker gain the wages they deserve and hopefully 
        help deter these crimes in the future. Businesses that 
        play by the rules will also benefit because the 
        cheaters underbid them. Good employers should not be 
        punished for following the law[.] Too many times fines 
        are imposed and bad actors in the industry see them as, 
        ``just the price of doing business''. Without stronger 
        enforcement, higher penalties, and education to workers 
        we will never stop these practices. Workers deserve 
        better in this country[.]\37\
---------------------------------------------------------------------------
    \37\Statement of Francisco Esparza, supra note 15 at 3.

    For the foregoing reasons, Congress must act and pass the 
Wage Theft Act.

                      Section-by-Section Analysis


Sec. 1. Short title

    This section specifies that the title of the bill may be 
cited as the Wage Theft Prevention and Wage Recovery Act of 
2022.

   TITLE I--AMENDMENTS TO THE FAIR LABOR STANDARDS ACT (FLSA) OF 1938

Sec. 101. Requirements to provide certain disclosures, regular 
        paystubs, and final payment

    This section requires employers to provide initial 
disclosures when employees are first hired and modification 
disclosures when employees' job statuses change. Employers are 
required to issue regular pay stubs detailing all information 
relevant for an employee to independently verify that the 
employee's pay is accurate. This information must include:
           whether the employee is classified as exempt 
        from minimum wage and overtime requirements;
           total gross and net wages paid;
           the applicable pay period;
           the rate of pay, hours, overtime hours, and 
        overtime rate applied;
           any additional compensation or deductions 
        from pay; and
           additional information the Secretary 
        reasonably requires.
    This section requires the Secretary to prescribe model 
paystubs and disclosures and make them publicly available to 
employers.
    This section also requires final payments be made to 
terminated employees within 14 days of termination or employers 
may owe additional compensation to the employees.

Sec. 102. Right to full compensation

    This section establishes that employers will compensate 
employees at the rate specified in the employment contract, 
including the rate in collective bargaining agreements, 
although that rate may be higher than minimum wage.

Sec. 103. Civil and criminal enforcement

    This section strikes the word ``minimum'' from the FLSA's 
damages provisions to allow employees who have been harmed by a 
violation of the FLSA to seek the full amount of back wages 
owed as damages rather than use the minimum wage as a limit.
    This section increases liquidated damages on violations of 
the FLSA's wage and hour provisions from double damages to 
triple damages, and from triple to quadruple damages where 
employers retaliate against employees for filing an FLSA claim.
    This section specifies that the right to bring an action--
including a joint, class, or collective claim--cannot be waived 
as a condition of employment or by a pre-dispute arbitration 
agreement.
    This section increases civil monetary penalties on repeated 
and willful violations of wage and hour laws from $2,203 per 
violation to $110,150 per affected employee and creates a 
maximum penalty of $22,030 per employee for initial violations.
    Additionally, this section provides that employers who 
violate the FLSA's tipped wage provisions will be subject to a 
civil monetary penalty of $12,340, an increase from $1,234.
    This section also adds civil monetary penalties of $50 
(initial) and $100 (repeated or willful) for each violation of 
pay stub or disclosure requirements as well as $1,000 (initial) 
and $5,000 (repeated or willful) for violating FLSA 
recordkeeping provisions.
    Finally, this section clarifies that criminal penalties are 
to be assessed to the employer per employee harmed by the 
employer's violation of the FLSA. The Secretary also shall be 
allowed to refer an offending employer to the Department of 
Justice (DOJ) for violations of the FLSA recordkeeping, wage 
and hour, and/or retaliation provisions.

Sec. 104. Recordkeeping

    This section establishes that employees have the right to 
inspect an employer's wage records within 21 days after 
employees make such a request. Employers are required to 
maintain wage records for a period of five years.
    This section also adopts the common law rebuttable 
presumption established in Anderson v. Mt. Clemons Pottery 
Co.\38\ Specifically, in a claim for back wages before a 
tribunal, if an employer's records are inadequate for 
establishing the amount or extent of work for which the 
employee should be compensated, there is a rebuttable 
presumption that the employee's own records and recollections 
are accurate, unless the employer can establish the employee's 
evidence is not reasonable.
---------------------------------------------------------------------------
    \38\Anderson, et al. v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-
88 (1946).
---------------------------------------------------------------------------

        TITLE II--AMENDMENTS TO THE PORTAL-TO-PORTAL ACT OF 1947

Sec. 201. Increasing and tolling statute of limitations

    This section amends the Portal-to-Portal Act of 1947 to 
increase the statute of limitations to bring a claim for wage 
or hour violations from two years to four years as well as from 
three years to five years where the employers' actions are 
willful.

    TITLE III--WAGE THEFT PREVENTION AND WAGE RECOVERY GRANT PROGRAM

Sec. 301. Definitions

    This section provides several definitions, including wage 
and hour, wage and hour violations, and terms used in the grant 
program established in this title.

Sec. 302. Wage theft prevention and wage recovery grant program

    This section establishes that the Secretary shall provide 
grants to eligible entities to assist employees and employers. 
Specifically, eligible entities shall support activities that 
include disseminating information and conducting outreach to 
educate employees about their rights under wage and hour laws, 
training for employers about their obligations under wage and 
hour laws, and aiding employees in filing claims for wage and 
hour violations.

Sec. 303. Authorization of appropriations

    This section authorizes $50,000,000 annually for Fiscal 
Years 2023-2026 to carry out the grant program established in 
section 302.

   TITLE IV--RELATION TO OTHER LAWS, REGULATIONS, AND EFFECTIVE DATE

Sec. 401. Relation to other laws

    This section specifies that the paystub and disclosure 
requirements shall not preempt or supersede any requirements 
under state or local law that are at least as comprehensive as 
the requirements under this Act. The Secretary shall provide 
assistance to employers operating in more than one state as may 
be necessary to ensure compliance.

Sec. 402. Regulations

    This section establishes that no later than 18 months after 
the date of enactment, the Secretary shall promulgate 
regulations necessary to carry out the Act and the amendments 
made by the Act.

Sec. 403. Effective date

    This section provides that the amendments made by the Act 
will take effect either 6 months after final regulations are 
promulgated by the Secretary under section 401 or 18 months 
after enactment, whichever comes first.

                       Explanation of Amendments

    The amendments, including the amendment in the nature of a 
substitute, are explained in the descriptive portions of this 
report.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act of 1995, Pub. L. No. 104-1, H.R. 7701, as 
amended, applies to terms and conditions of employment within 
the legislative branch because one of the laws amended by H.R. 
7701 (Fair Labor Standards Act) is included within the list of 
laws applicable to the legislative branch enumerated in section 
102(a) of the Congressional Accountability Act of 1995.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended 
by Section 101(a)(2) of the Unfunded Mandates Reform Act of 
1995, Pub. L. No. 104-4), the Committee traditionally adopts as 
its own the cost estimate prepared by the Director of the 
Congressional Budget Office (CBO) pursuant to section 402 of 
the Congressional Budget and Impoundment Control Act of 1974. 
The Committee reports that because this cost estimate was not 
timely submitted to the Committee before the filing of this 
report, the Committee is not in a position to make a cost 
estimate for H.R. 7701, as amended.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 7701 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                            Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 7701:
	
	
	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 7701 are to 
strengthen wage and hour protections for workers and law-
abiding businesses under the Fair Labor Standards Act and the 
Portal-to-Portal Act.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 7701 is known to be duplicative of another 
federal program, including any program that was included in a 
report to Congress pursuant to section 21 of Pub. L. No. 111-
139 or the most recent Catalog of Federal Domestic Assistance.

                                Hearings

    Pursuant to clause 3(c)(6) of rule XIII of the Rules of the 
House of Representatives, the Committee on Education and 
Labor's Subcommittee on Workforce Protections held a hearing on 
May 11, 2022, entitled ``Standing Up for Workers: Preventing 
Wage Theft and Recovering Stolen Wages,'' which was used to 
consider H.R. 7701. The witnesses were: Ms. Karen Cacace, Labor 
Bureau Chief, New York State Office of the Attorney General, 
New York, NY; Mr. Francisco Esparza, Representative, United 
Brotherhood of Carpenters, Upper Marlboro, MD; Ms. Tammy 
McCutchen, Senior Affiliate, Resolution Economics, Washington, 
DC; and Mr. Daniel Swenson-Klatt, Owner, Butter Bakery Cafe, 
Minneapolis, MN. The Committee heard testimony on how stronger 
state wage and hour law provisions could serve as examples to 
improve the FLSA, the harmful impact the wage theft crisis is 
having on workers, and how honest businesses are left at a 
competitive disadvantage when unscrupulous employers do not pay 
workers what they are owed.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget and Impoundment Control Act of 1974, and 
pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives and section 402 of the Congressional 
Budget and Impoundment Control Actof 1974, the Committee has 
requested but not received a cost estimate for the bill from 
the Director of the Congressional Budget Office.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 7701. 
However, Clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget and Impoundment 
Control Act of 1974. The Committee reports that because this 
cost estimate was not timely submitted to the Committee before 
the filing of this report, the Committee is not in a position 
to make a cost estimate for H.R. 7701, as amended.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 7701, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                    FAIR LABOR STANDARDS ACT OF 1938




           *       *       *       *       *       *       *
                             administration

  Sec. 4. (a) There is hereby created in the Department of 
Labor a Wage and Hour Division which shall be under the 
direction of an Administrator, to be known as the Administrator 
of the Wage and Hour Division (in this Act referred to as the 
``Administrator''). The Administrator shall be appointed by the 
President, by and with the advice and consent of the Senate, 
and shall receive compensation at the rate of $20,000 a year.
  (b) The Secretary of Labor may, subject to the civil service 
laws, appoint such employees as he deems necessary to carry out 
his functions and duties under this Act and shall fix their 
compensation in accordance with the Classification Act of 1949, 
as amended. The Secretary may establish and utilize such 
regional, local, or other agencies, and utilize such voluntary 
and uncompensated services, as may from time to time be needed. 
Attorneys appointed under this section may appear for and 
represent the Secretary in any litigation, but all such 
litigation shall be subject to the direction and control of the 
Attorney General. In the appointment, selection, 
classification, and promotion of officers and employees of the 
Secretary, no political test or qualification shall be 
permitted or given consideration, but all such appointments and 
promotions shall be given and made on the basis of merit and 
efficiency.
  (c) The principal office of the Secretary shall be in the 
District of Columbia, but he or his duly authorized 
representative may exercise any or all of his powers in any 
place.
  (d)(1) The Secretary shall submit biennially in January a 
report to the Congress covering his activities for the 
preceding two years and including such information, data, and 
recommendations for further legislation in connection with the 
matters covered by this Act as he may find advisable. Such 
report shall contain an evaluation and appraisal by the 
Secretary of the minimum wages and overtime coverage 
established by this Act, together with his recommendations to 
the Congress. In making such evaluation and appraisal, the 
Secretary shall take into consideration any changes which may 
have occurred in the cost of living and in productivity and the 
level of wages in manufacturing, the ability of employers to 
absorb wage increases, and such other factors as he may deem 
pertinent. Such report shall also include a summary of the 
special certificates issued under section 14(b).
  (2) The Secretary shall conduct studies on the justification 
or lack thereof for each of the special exemptions set forth in 
section 13 of this Act, and the extent to which such exemptions 
apply to employees of establishments described in subsection 
(g) of such section and the economic effects of the application 
of such exemptions to such employees. The Secretary shall 
submit a report of his findings and recommendations to the 
Congress with respect to the studies conducted under this 
paragraph not later than January 1, 1976.
  (3) The Secretary shall conduct a continuing study on means 
to prevent curtailment of employment opportunities for manpower 
groups which have had historically high incidences of 
unemployment (such as disadvantaged minorities, youth, elderly, 
and such other groups as the Secretary may designate). The 
first report of the results of such study shall be transmitted 
to the Congress not later than one year after the effective 
date of the Fair Labor Standards Amendments of 1974. Subsequent 
reports on such study shall be transmitted to the Congress at 
two-year intervals after such effective date. Each such report 
shall include suggestions respecting the Secretary's authority 
under section 14 of this Act.
  (e) Whenever the Secretary has reason to believe that in any 
industry under this Act the competition of foreign producers in 
United States markets or in markets abroad, or both, has 
resulted, or is likely to result, in increased unemployment in 
the United States, he shall undertake an investigation to gain 
full information with respect to the matter. If he determines 
such increased unemployment has in fact resulted, or is in fact 
likely to result, from such competition, he shall make a full 
and complete report of his findings and determinations to the 
President and to the Congress: Provided, That he may also 
include in such report information on the increased employment 
resulting from additional exports in any industry under this 
Act as he may determine to be pertinent to such report.
  (f) The Secretary is authorized to enter into an agreement 
with the Librarian of Congress with respect to individuals 
employed in the Library of Congress to provide for the carrying 
out of the Secretary's functions under this Act with respect to 
such individuals. Notwithstanding any other provision of this 
Act, or any other law, the Civil Service Commission is 
authorized to administer the provisions of this Act with 
respect to any individual employed by the United States (other 
than an individual employed in the Library of Congress, United 
States Postal Service, Postal Rate Commission, or the Tennessee 
Valley Authority). Nothing in this subsection shall be 
construed to affect the right of an employee to bring an action 
[for unpaid minimum wages, or unpaid overtime compensation, and 
liquidated damages] for unpaid wages, or unpaid overtime 
compensation, as well as interest and liquidated damages, under 
section 16(b) of this Act.

SEC. 5. REQUIREMENTS TO PROVIDE CERTAIN DISCLOSURES, REGULAR PAYSTUBS, 
                    AND FINAL PAYMENTS.

  (a) Disclosures.--
          (1) Initial disclosures.--Not later than 15 days 
        after the date on which an employer hires an employee 
        who in any workweek is engaged in commerce or in the 
        production of goods for commerce, or is employed in an 
        enterprise engaged in commerce or in the production of 
        goods for commerce, the employer of such employee shall 
        provide such employee with an initial disclosure 
        containing the information described in paragraph (3). 
        Such initial disclosure shall be--
                  (A) provided as a written statement or, if 
                the employee so chooses, as a digital document 
                provided through electronic communication; and
                  (B) made available in the employee's primary 
                language.
          (2) Modification disclosures.--Not later than the 
        earlier of 5 days after the date on which any of the 
        information described in paragraph (3) changes with 
        respect to an employee described in paragraph (1) or 
        the date of the next paystub following the date on 
        which such information changes, the employer of such 
        employee shall provide the employee with a modification 
        disclosure containing all the information described in 
        paragraph (3).
          (3) Information.--The information described in this 
        paragraph shall include--
                  (A) the rate of pay and whether the employee 
                is paid by the hour, shift, day, week, or job, 
                or by salary, piece rate, commission, or other 
                form of compensation;
                  (B)(i) an indication of whether the employee 
                is being classified by the employer as an 
                employee subject to the minimum wage 
                requirements of section 6 or as an employee 
                that is exempt from (or otherwise not subject 
                to) such requirements as provided under section 
                3(m)(2), 6, 13, or 14, as well as the reason 
                for the exemption; and
                  (ii) in the case that such employee is not 
                classified as being an employee subject to such 
                minimum wage requirements, an identification of 
                the section described in clause (i) providing 
                for such classification;
                  (C)(i) an indication of whether the employee 
                is being classified by the employer as an 
                employee subject to the overtime compensation 
                requirements of section 7 or as an employee 
                exempt from such requirements as provided under 
                section 7 or 13; and
                  (ii) in the case that such employee is not 
                classified as being an employee subject to such 
                overtime compensation requirements, an 
                identification of the section described in 
                clause (i) providing for such classification;
                  (D) the name of the employer and any other 
                name used by the employer to conduct business; 
                and
                  (E) the physical address of and telephone 
                number for the employer's main office or 
                principal place of business, and a mailing 
                address for such office or place of business if 
                the mailing address is different than the 
                physical address.
  (b) Paystubs.--
          (1) In general.--Every employer shall provide each 
        employee of such employer who in any workweek is 
        engaged in commerce or in the production of goods for 
        commerce, or is employed in an enterprise engaged in 
        commerce or in the production of goods for commerce, a 
        paystub that corresponds to work performed by the 
        employee during the applicable pay period and contains 
        the information required under paragraph (3) in any 
        form provided under paragraph (2).
          (2) Forms.--A paystub required under this subsection 
        shall be a written statement and may be provided in any 
        of the following forms:
                  (A) As a separate document accompanying any 
                payment to an employee for work performed 
                during the applicable pay period.
                  (B) In the case of an employee who receives 
                paychecks from the employer, as a detachable 
                statement accompanying each paycheck.
                  (C) As a digital document provided through 
                electronic communication, subject to the 
                employee affirmatively consenting to receive 
                the paystubs in this form.
          (3) Contents.--Each paystub shall contain all of the 
        following information:
                  (A) The name of the employee.
                  (B) Except in the case of an employee who is 
                exclusively paid a salary and is exempt from 
                the overtime requirements of section 7, the 
                total number of hours worked by the employee, 
                including the number of hours worked per 
                workweek, during the applicable pay period.
                  (C) The total gross and net wages paid, and, 
                except in the case of an employee who is 
                exclusively paid a salary and is exempt from 
                the overtime requirements of section 7, the 
                rate of pay for each hour worked during the 
                applicable pay period.
                  (D) In the case of an employee who is paid 
                any salary, the amount of any salary paid 
                during the applicable pay period.
                  (E) In the case of an employee employed at 
                piece rates, the number of piece rate units 
                earned, the applicable piece rates, and the 
                total amount paid to the employee per workweek 
                for the applicable pay period in accordance 
                with such piece rates.
                  (F) The rate of pay per workweek of the 
                employee during the applicable pay period and 
                an explanation of the basis for such rate.
                  (G) The number of overtime hours per workweek 
                worked by the employee during the applicable 
                pay period and the compensation required under 
                section 7 that is provided to the employee for 
                such hours.
                  (H) Any additional compensation provided to 
                the employee during the applicable pay period, 
                with an explanation of each type of 
                compensation, including any allowances or 
                reimbursements such as amounts related to 
                meals, clothing, lodging, or any other item.
                  (I) Itemized deductions from the gross income 
                of the employee during the applicable pay 
                period, and an explanation for each deduction.
                  (J) The date that is the beginning of the 
                applicable pay period and the date that is the 
                end of such applicable pay period.
                  (K) The name of the employer and any other 
                name used by the employer to conduct business.
                  (L) The name and phone number of a 
                representative of the employer for contact 
                purposes.
                  (M) Any additional information that the 
                Secretary reasonably requires to be included 
                through notice and comment rulemaking.
  (c) Model Disclosures and Pay Stub.--The Secretary shall 
prescribe model disclosures and a model pay stub that may be 
used to satisfy the requirements of subsections (a) and (b), 
respectively. The Secretary shall make the model disclosures 
and the model pay stub publicly available to employers.
  (d) Final Payments.--
          (1) In general.--Not later than 14 days after an 
        individual described in paragraph (4) terminates 
        employment with an employer (by action of the employer 
        or the individual), or on the date on which such 
        employer pays other employees for the pay period during 
        which the individual so terminates such employment, 
        whichever date is earlier, the employer shall provide 
        the individual with a final payment, which includes all 
        compensation due to such individual for all time worked 
        and benefits incurred (including retirement, health, 
        leave, fringe, and other benefits) by the individual as 
        an employee for the employer.
          (2) Continuing wages.--An employer who violates the 
        requirement under paragraph (1) shall, for each day, 
        not to exceed 30 days, of such violation provide the 
        individual described in paragraph (4) with compensation 
        at a rate that is equal to the regular rate of 
        compensation, as determined under this Act, to which 
        such individual was entitled when such individual was 
        an employee of such employer.
          (3) Limitation.--Notwithstanding paragraphs (1) and 
        (2), an individual described in paragraph (4) shall not 
        be entitled to the compensation described under 
        paragraph (2) if the employer successfully demonstrates 
        that--
                  (A) the employer made a good-faith effort to 
                provide the final payment described in 
                paragraph (1); and
                  (B) the individual refused or otherwise 
                intentionally avoided receiving such final 
                payment.
          (4) Individual.--An individual described in this 
        paragraph is an individual who was employed by the 
        employer, and through such employment, in any workweek, 
        was engaged in commerce or in the production of goods 
        for commerce, or was employed in an enterprise engaged 
        in commerce or in the production of goods for commerce.

           *       *       *       *       *       *       *


                             minimum wages

  Sec. 6. (a) Every employer shall pay to each of his employees 
who in any workweek is engaged in commerce or in the production 
of goods for commerce, or is employed in an enterprise engaged 
in commerce or in the production of goods for commerce, wages 
at the following rates:
          (1) except as otherwise provided in this section, not 
        less than--
                  (A) $5.85 an hour, beginning on the 60th day 
                after the date of enactment of the Fair Minimum 
                Wage Act of 2007;
                  (B) $6.55 an hour, beginning 12 months after 
                that 60th day; and
                  (C) $7.25 an hour, beginning 24 months after 
                that 60th day;
          (2) if such employee is a home worker in Puerto Rico 
        or the Virgin Islands, not less than the minimum piece 
        rate prescribed by regulation or order; or, if no such 
        minimum piece rate is in effect, any piece rate adopted 
        by such employer which shall yield, to the proportion 
        or class of employees prescribed by regulation or 
        order, not less than the applicable minimum hourly wage 
        rate. Such minimum piece rates or employer piece rates 
        shall be commensurate with, and shall be paid in lieu 
        of, the minimum hourly wage rate applicable under the 
        provisions of this section. The Secretary of Labor, or 
        his authorized representative, shall have power to make 
        such regulations or orders as are necessary or 
        appropriate to carry out any of the provisions of this 
        paragraph, including the power without limiting the 
        generality of the foregoing, to define any operation or 
        occupation which is performed by such home work 
        employees in Puerto Rico or the Virgin Islands; to 
        establish minimum piece rates for any operation or 
        occupation so defined; to prescribe the method and 
        procedure for ascertaining and promulgating minimum 
        piece rates; to prescribe standards for employer piece 
        rates, including the proportion or class of employees 
        who shall receive not less than the minimum hourly wage 
        rate; to define the term ``home worker''; and to 
        prescribe the conditions under which employers, agents, 
        contractors, and subcontractors shall cause goods to be 
        produced by home workers;
          (3) if such employee is employed as a seaman on an 
        American vessel, not less than the rate which will 
        provide to the employee, for the period covered by the 
        wage payment, wages equal to compensation at the hourly 
        rate prescribed by paragraph (1) of this subsection for 
        all hours during such period when he was actually on 
        duty (including periods aboard ship when the employee 
        was on watch or was, at the direction of a superior 
        officer, performing work or standing by, but not 
        including off-duty periods which are provided pursuant 
        to the employment agreement); or
          (4) if such employee is employed in agriculture, not 
        less than the minimum wage rate in effect under 
        paragraph (1) after December 31, 1977.
  (b) Every employer shall pay to each of his employees (other 
than an employee to whom subsection (a)(5) applies) who in any 
workweek is engaged in commerce or in the production of goods 
for commerce, or is employed in an enterprise engaged in 
commerce or in the production of goods for commerce, and who in 
such workweek is brought within the purview of this section by 
the amendments made to this Act by the Fair Labor Standards 
Amendments of 1966, title IX of the Education Amendments of 
1972, or the Fair Labor Standards Amendments of 1974, wages at 
the following rate: Effective after December 31, 1977, not less 
than the minimum wage rate in effect under subsection (a)(1).
  (d)(1) No employer having employees subject to any provisions 
of this section shall discriminate, within any establishment in 
which such employees are employed, between employees on the 
basis of sex by paying wages to employees in such establishment 
at a rate less than the rate at which he pays wages to 
employees of the opposite sex in such establishment for equal 
work on jobs the performance of which requires equal skill, 
effort, and responsibility, and which are performed under 
similar working conditions, except where such payment is made 
pursuant to (i) a seniority system; (ii) a merit system; (iii) 
a system which measures earnings by quantity or quality or 
production; or (iv) a differential based on any other factor 
other than sex: Provided, That an employer who is paying a wage 
rate differential in violation of this subsection shall not, in 
order to comply with the provisions of this subsection, reduce 
the wage rate of any employee.
  (2) No labor organization, or its agents, representing 
employees of an employer having employees subject to any 
provisions of this section shall cause or attempt to cause such 
an employer to discriminate against an employee in violation of 
paragraph (1) of this subsection.
  (3) For purposes of administration and enforcement, any 
amounts owing to any employees which have been withheld in 
violation of this subsection shall be deemed to be unpaid 
[minimum] wages or unpaid overtime-compensation under this Act.
  (4) As used in this subsection, the term ``labor 
organization'' means any organization of any kind, or any 
agency or employee representation committee or plan, in which 
employees participate and which exists for the purpose, in 
whole or in part, of dealing with employers concerning 
grievances, labor disputes, wages, rates of pay, hours of 
employment, or conditions of work.
  (e)(1) Notwithstanding the provisions of section 13 of this 
Act (except subsections (a)(1) and (f) thereof), every employer 
providing any contract services (other than linen supply 
services) under a contract with the United States or any 
subcontract thereunder shall pay to each of his employees whose 
rate of pay is not governed by the Service Contract Act of 1965 
(41 U.S.C. 351-357) or to whom subsection (a)(1) of this 
section is not applicable, wages at rates not less than the 
rates provided for in subsection (b) of this section.
  (2) Notwithstanding the provisions of section 13 of this Act 
(except subsections (a)(1) and (f) thereof) and the provisions 
of the Service Contract Act of 1965, every employer in an 
establishment providing linen supply services to the United 
States under a contract with the United States or any 
subcontract thereunder shall pay to each of his employees in 
such establishment wages at rates not less than those 
prescribed in subsection (b), except that if more than 50 per 
centum of the gross annual dollar volume of sales made or 
business done by such establishment is derived from providing 
such linen supply services under any such contracts or 
subcontracts, such employer shall pay to each of his employees 
in such establishment wages at rates not less than those 
prescribed in subsection (a)(1) of this section.
  (f) Any employee--
          (1) who in any workweek is employed in domestic 
        service in a household shall be paid wages at a rate 
        not less than the wage rate in effect under section 
        6(b) unless such employee's compensation for such 
        service would not because of section 209(a)(6) of the 
        Social Security Act constitute wages for the purpose of 
        title II of such Act, or
          (2) who in any workweek--
                  (A) is employed in domestic service in one or 
                more households, and
                  (B) is so employed for more than 8 hours in 
                the aggregate,
        shall be paid wages for such employment in such 
        workweek at a rate not less than the wage rate in 
        effect under section 6(b).
  (g)(1) In lieu of the rate prescribed by subsection (a)(1), 
any employer may pay any employee of such employer, during the 
first 90 consecutive calendar days after such employee is 
initially employed by such employer, a wage which is not less 
than $4.25 an hour.
  (2) In lieu of the rate prescribed by subsection (a)(1), the 
Governor of Puerto Rico, subject to the approval of the 
Financial Oversight and Management Board established pursuant 
to section 101 of the Puerto Rico Oversight, Management, and 
Economic Stability Act, may designate a time period not to 
exceed four years during which employers in Puerto Rico may pay 
employees who are initially employed after the date of 
enactment of such Act a wage which is not less than the wage 
described in paragraph (1). Notwithstanding the time period 
designated, such wage shall not continue in effect after such 
Board terminates in accordance with section 209 of such Act.
  (3) No employer may take any action to displace employees 
(including partial displacements such as reduction in hours, 
wages, or employment benefits) for purposes of hiring 
individuals at the wage authorized in paragraph (1) or (2).
  (4) Any employer who violates this subsection shall be 
considered to have violated section 15(a)(3) (29 U.S.C. 
215(a)(3)).
  (5) This subsection shall only apply to an employee who has 
not attained the age of 20 years, except in the case of the 
wage applicable in Puerto Rico, 25 years, until such time as 
the Board described in paragraph (2) terminates in accordance 
with section 209 of the Act described in such paragraph.

           *       *       *       *       *       *       *


SEC. 8. RIGHT TO FULL COMPENSATION.

  (a) In General.--In the case of an employment contract or 
other employment agreement, including a collective bargaining 
agreement, that specifies that an employer shall compensate an 
employee (who is described in subsection (b)) at a rate that is 
higher than the rate otherwise required under this Act, the 
employer shall compensate such employee at the rate specified 
in such contract or other employment agreement.
  (b) Employee Engaged in Commerce.--The requirement under 
subsection (a) shall apply with respect to any employee who in 
any workweek is engaged in commerce or in the production of 
goods for commerce, or is employed in an enterprise engaged in 
commerce or in the production of goods for commerce.

           *       *       *       *       *       *       *


                             [court review

  [Sec. 10. (a) Any person aggrieved by an order of the 
Secretary issued under section 8 may obtain a review of such 
order in the United States Court of Appeals for any circuit 
wherein such person resides or has his principal place of 
business, or in the United States Court of Appeals for the 
District of Columbia, by filing in such court, within 60 days 
after the entry of such order a written petition praying that 
the order of the Secretary be modified or set aside in whole or 
in part. A copy of such petition shall forthwith be transmitted 
by the clerk of the court to the Secretary, and thereupon the 
Secretary shall file in the court of the record of the industry 
committee upon which the order complained of was entered, as 
provided in section 2112 of title 28, United States Code. Upon 
the filing of such petition such court shall have exclusive 
jurisdiction to affirm, modify (including provision for the 
payment of an appropriate minimum wage rate), or set aside such 
order in whole or in part so far as it is applicable to the 
petitioner. The review by the court shall be limited to 
questions of law, and findings of fact by such industry 
committee when supported by substantial evidence shall be 
conclusive. No objection to the order of the Secretary shall be 
considered by the court unless such objective shall have been 
urged before such industry committee or unless there were 
reasonable grounds for failure so to do. If application is make 
to the court for leave to adduce additional evidence, and it is 
shown to the satifaction of the court that such additional 
evidence may materially affect the result of the proceeding and 
that there were reasonable grounds for failure to adduce such 
evidence in the proceedings before such industry committee, the 
court may order such additional evidence to be taken before an 
industry committee and to be adduced upon the hearing in such 
manner and upon such terms and conditions as to the court may 
seem proper. Such industry committee may modify the initial 
findings by reason of the additional evidence so taken, and 
shall file with the court such modified or new findings which 
if supported by substantial evidence shall be conclusive, and 
shall also file its recommendation, if any, for the 
modification or setting aside of the original order. The 
judgment and decree of the court shall be final, subject to 
review by the Supreme Court of the United States upon 
certiorari or certification as provided in section 1254 of 
title 28 of the United States Code.
  [(b) The commencement of proceedings under subsection (a) 
shall not, unless specifically ordered by the court, operate as 
a stay of the Secretary's order. The Court shall not grant any 
stay of the order unless the person complaining of such order 
shall file in court an undertaking with a surety or sureties 
satisfactory to the court of the payment to the employees 
affected by the order, in the event such order is affirmed, of 
the amount by which the compensation such employees are 
entitled to receive under the order exceeds the compensation 
they actually receive while such stay is in effect.]

     investigations, inspections, records, and homework regulations

  Sec. 11. (a) The Secretary of Labor or his designated 
representatives may investigate and gather data regarding the 
wages, hours, and other conditions and practices of employment 
in any industry subject to this Act, and may enter and inspect 
such places and such records (and make such transcriptions 
thereof), question such employees, and investigate such facts, 
conditions, practices, or matters as he may deem necessary or 
appropriate to determine whether any person has violated any 
provision of this Act, or which may aid in the enforcement of 
the provisions of this Act. Except as provided in section 12 
and in subsection (b) of this section, the Secretary shall 
utilize the bureaus and divisions of the Department of Labor 
for all the investigations and inspections necessary under this 
section. Except as provided in section 12, the Secretary shall 
bring all actions under section 17 to restrain violations of 
this Act.
  (b) With the consent and cooperation of State agencies 
charged with the administration of State labor laws, the 
Secretary of Labor may, for the purpose of carrying out his 
functions and duties under this Act, utilize the services of 
State and local agencies and their employees and, 
notwithstanding any other provision of law, may reimburse such 
State and local agencies and their employees for services 
rendered for such purposes.
  (c) Every employer subject to any provision of this Act or of 
any order issued under this Act shall make, keep, and preserve 
such records of the persons employed by him and of the wages, 
hours, and other conditions and practices of employment 
maintained by him, and shall preserve such records for such 
period of time, and shall make such reports therefrom to the 
Secretary as he shall prescribe by regulation or order as 
necessary or appropriate for the enforcement of the provisions 
of this Act or the regulations or orders thereunder. The 
employer of an employee who performs substitute work described 
in section 7(p)(3) may not be required under this subsection to 
keep a record of the hours of the substitute work. In the event 
that an employee requests an inspection of the records 
described in this subsection that pertain to such employee from 
the employer, orally or in writing, the employer shall provide 
the employee with a copy of the records for a period of up to 5 
years prior to such request being made. Not later than 21 days 
after an employee requests such an inspection, the employer 
shall comply with the request.
  (d) The Secretary is authorized to make such regulations and 
orders regulating, restricting, or prohibiting industrial 
homework as are necessary or appropriate to prevent the 
circumvention or evasion of and to safeguard the minimum wage 
rate prescribed in this Act, and all existing regulations or 
orders of the Administration relating to industrial homework 
are hereby continued in full force and effect.

           *       *       *       *       *       *       *


                            prohibited acts

  Sec. 15. (a) After the expiration of one hundred and twenty 
days from the date of enactment of this Act, it shall be 
unlawful for any person--
          (1) to transport, offer for transportation, ship, 
        deliver, or sell in commerce, or to ship, deliver, or 
        sell with knowledge that shipment or delivery or sale 
        thereof in commerce is intended, any goods in the 
        production of which any employee was employed in 
        violation of [section 6 or section 7] section 6, 7, or 
        8, or in violation of any regulation or order of the 
        Secretary of Labor issued under section 14; except that 
        no provision of this Act shall impose any liability 
        upon any common carrier for the transportation in 
        commerce in the regular course of its business of any 
        goods not produced by such common carrier, and no 
        provision of this Act shall excuse any common carrier 
        from its obligation to accept any goods for 
        transportation; and except that any such 
        transportation, offer, shipment, delivery, or sale of 
        such goods by a purchaser who acquired them in good 
        faith in reliance on written assurance from the 
        producer that the goods were produced in compliance 
        with the requirements of the Act, and who acquired such 
        goods for value without notice of any such violation, 
        shall not be deemed unlawful;
          (2) to violate any of the provisions of [section 6 or 
        section 7] section 5, 6, 7, or 8, or any of the 
        provisions of any regulation or order of the Secretary 
        issued under section 14;
          (3) to discharge or in any other manner discriminate 
        against any employee because such employee has filed 
        any complaint or instituted or caused to be instituted 
        any proceeding under or related to this Act, or has 
        testified or is about to testify in any such 
        proceeding, or has served or is about to serve on an 
        industry committee;
          (4) to violate any of the provisions of section 12;
          (5) to violate any of the provisions of section 11(c) 
        or any regulation or order made or continued in effect 
        under the provisions of section 11(d), or to make any 
        statement, report, or record filed or kept pursuant to 
        the provisions of such section or of any regulation or 
        order thereunder, knowing such statement, report, or 
        record to be false in a material respect.
  (b) For the purposes of subsection (a)(1) proof that any 
employee was employed in any place of employment where goods 
shipped or sold in commerce were produced, within ninety days 
prior to the removal of the goods from such place of 
employment, shall be prima facie evidence that such employee 
was engaged in the production of such goods.
  (c) In the event that an employer violates section 11(c) and 
any regulations issued pursuant to such section, resulting in a 
lack of a complete record of an employee's hours worked or 
wages owed, the employee's production of credible evidence and 
testimony regarding the amount or extent of the work for which 
the employee was not compensated in compliance with the 
requirements under this Act shall be sufficient to create a 
rebuttable presumption that the employee's records are 
accurate. Such presumption shall be rebutted only if the 
employer produces evidence of the precise amount or extent of 
work performed or evidence to show that the inference drawn 
from the employee's evidence is not reasonable.

                               penalties

  Sec. 16. (a) [Any person] (1) Any person  who willfully 
violates any of the provisions of section 15 shall upon 
conviction thereof be subject to a fine of not more than 
[$10,000] $10,000 per each employee affected, or to 
imprisonment for not more than six months, or both. [No person] 
Subject to paragraph (2), no person shall be imprisoned under 
this subsection except for an offense committed after the 
conviction of such person for a prior offense under this 
subsection.
  (2)(A) Notwithstanding any other provision of this Act, the 
Secretary shall refer any case involving a covered offender 
described in subparagraph (B) to the Department of Justice for 
prosecution.
  (B) A covered offender described in this subparagraph is a 
person who willfully violates any of the following:
          (i) Section 11(c) by falsifying any records described 
        in such section.
          (ii) Section 6, 7, or 8, relating to wages.
          (iii) Section 15(a)(3).
  (b) Any employer who violates the provisions of [section 6 or 
section 7] section 6, 7, or 8 of this Act shall be liable to 
the employee or employees affected in the amount of their 
unpaid [minimum] wages, or the unpaid overtime compensation, as 
the case may be, [and in an additional equal amount as 
liquidated damages]  the amount of any interest on such unpaid 
wages or unpaid overtime compensation accrued at the prevailing 
rate, and an additional amount as liquidated damages that is 
equal to (subject to the second sentence of this subsection) 2 
times such amount of unpaid wages or unpaid overtime 
compensation. Any employer who violates the provisions of 
section 15(a)(3) of this Act shall be liable for such legal or 
equitable relief as may be appropriate to effectuate the 
purposes of section 15(a)(3), including without limitation 
employment, reinstatement, promotion, and the payment of [wages 
lost and an additional equal amount as liquidated damages] 
wages lost, including any unpaid wages or any unpaid overtime 
compensation, the amount of any interest on such wages lost 
accrued at the prevailing rate, and an additional amount as 
liquidated damages that is equal to 3 times the amount of such 
wages lost. Any employer who violates section 3(m)(2)(B) shall 
be liable to the employee or employees affected in the amount 
of the sum of any tip credit taken by the employer and all such 
tips unlawfully kept by the employer, and in an additional 
equal amount as liquidated damages. An action to recover the 
liability prescribed in the preceding sentences may be 
maintained against any employer (including a public agency) in 
any Federal or State court of competent jurisdiction by any one 
or more employees for and in behalf of himself or themselves 
and other employees similarly situated. [No employees shall be 
a party plaintiff to any such action unless he gives his 
consent in writing to become such a party and such consent is 
filed in the court in which such action is brought.] The court 
in such action shall, in addition to any judgment awarded to 
the plaintiff or plaintiffs, allow a reasonable attorney's fee 
to be paid by the defendant, and costs of the action. The right 
provided by this subsection to bring an action by or on behalf 
of any employee, and the right of any employee to become a 
party plaintiff to any such action, shall terminate upon the 
filing of a complaint by the Secretary of Labor in an action 
under section 17 in which (1) restraint is sought of any 
further delay in the payment of unpaid [minimum] wages, or the 
amount of unpaid overtime compensation, as the case may be, 
owing to such employee under [section 6 or section 7] section 
6, 7, or 8 of this act by an employer liable therefor under the 
provisions of this subsection or (2) legal or equitable relief 
is sought as a result of alleged violations of section 
15(a)(3). Notwithstanding chapter 1 of title 9, United States 
Code (commonly known as the ``Federal Arbitration Act''), or 
any other law, the right to bring an action, including a joint, 
class, or collective claim, in court under this section cannot 
be waived by an employee as a condition of employment or in a 
pre-dispute arbitration agreement.
  (c) The Secretary is authorized to supervise the payment of 
the unpaid [minimum] wages or the unpaid overtime compensation 
owing to any employee or employees under [section 6 or 7] 
section 6, 7, or 8 of this Act, and the agreement of any 
employee to accept such payment shall upon payment in full 
constitute a waiver by such employee of any right he may have 
under subsection (b) of this section to such unpaid [minimum] 
wages or unpaid overtime compensation [and an additional equal 
amount as liquidated damages], any interest on such unpaid 
wages or unpaid overtime compensation accrued at the prevailing 
rate, and an additional amount as liquidated damages that is 
equal to (subject to the third sentence of this subsection) 2 
times such amount of unpaid wages or unpaid overtime 
compensation. The Secretary may bring an action in any court of 
competent jurisdiction to recover the amount of the unpaid 
[minimum] wages or overtime compensation [and an equal amount 
as liquidated damages.], any interest on such unpaid wages or 
unpaid overtime compensation accrued at the prevailing rate, 
and an additional amount as liquidated damages that is equal to 
(subject to the third sentence of this subsection) 2 times such 
amount of unpaid wages or unpaid overtime compensation. In the 
event that the employer violates section 15(a)(3), the 
Secretary may bring an action in any court of competent 
jurisdiction to recover the amount of any wages lost, including 
any unpaid wages or any unpaid overtime compensation, any 
interest on such wages lost accrued at the prevailing rate, an 
additional amount as liquidated damages that is equal to 3 
times the amount of such wages lost, and any such legal or 
equitable relief as may be appropriate. The right provided by 
subsection (b) to bring an action by or on behalf of any 
employee to recover the liability specified in the first 
sentence of such subsection and of any employee to become a 
party plaintiff to any such action shall terminate upon the 
filing of a complaint by the Secretary in an action under this 
subsection in which a recovery is sought of unpaid [minimum] 
wages or unpaid overtime compensation under [sections 6 and 7] 
section 6, 7, or 8 or liquidated or other damages provided by 
this subsection owing to such employee by an employer liable 
under the provisions of subsection (b), unless such action is 
dismissed without prejudice on motion of the Secretary. Any 
sums thus recovered by the Secretary on behalf of an employee 
pursuant to this subsection shall be held in a special deposit 
account and shall be paid, on order of the Secretary, directly 
to the employee or employees affected. Any such sums not paid 
to an employee because of inability to do so within a period of 
three years shall be covered into the Treasury of the United 
States as miscellaneous receipts. In determining when an action 
is commenced by the Secretary under this subsection for the 
purposes of the statutes of limitations provided in section 
6(a) of the Portal-to-Portal Act of 1947, it shall be 
considered to be commenced in the case of any individual 
claimant on the date when the complaint is filed if he is 
specifically named as a party plaintiff in the complaint, or if 
his name did not so appear, on the subsequent date on which his 
name is added as a party plantiff in such action. The authority 
and requirements described in this subsection shall apply with 
respect to a violation of section 3(m)(2)(B), as appropriate, 
and the employer shall be liable for the amount of the sum of 
any tip credit taken by the employer and all such tips 
unlawfully kept by the employer, and an additional equal amount 
as liquidated damages.
  (d) In any action or proceeding commenced prior to, on, or 
after the date of enactment of this subsection, no employer 
shall be subject to any liability or punishment under this Act 
or the Portal-to-Portal Act of 1947 on account of his failure 
to comply with any provision or provisions of such Acts (1) 
with respect to work heretofore or hereafter performed in a 
workplace to which the exemption in section 13(f) is 
applicable, (2) with respect to work performed in Guam, the 
Canal Zone, or Wake Island before the effective date of this 
amendment of subsection (d), or (3) with respect to work 
performed in a possession named in section 6(a)(3) at any time 
prior to the establishment by the Secretary, as provided 
therein, of a minimum wage rate applicable to such work.
  (e)(1)(A) Any person who violates the provisions of sections 
12 or 13(c), relating to child labor, or any regulation issued 
pursuant to such sections, shall be subject to a civil penalty 
not to exceed--
                          (i) $11,000 for each employee who was 
                        the subject of such a violation; or
                          (ii) $50,000 with regard to each such 
                        violation that causes the death or 
                        serious injury of any employee under 
                        the age of 18 years, which penalty may 
                        be doubled where the violation is a 
                        repeated or willful violation.
  (B) For purposes of subparagraph (A), the term ``serious 
injury'' means--
          (i) permanent loss or substantial impairment of one 
        of the senses (sight, hearing, taste, smell, tactile 
        sensation);
          (ii) permanent loss or substantial impairment of the 
        function of a bodily member, organ, or mental faculty, 
        including the loss of all or part of an arm, leg, foot, 
        hand or other body part; or
          (iii) permanent paralysis or substantial impairment 
        that causes loss of movement or mobility of an arm, 
        leg, foot, hand or other body part.
  [(2) Any person who repeatedly or willfully violates section 
6 or 7, relating to wages, shall be subject to a civil penalty 
not to exceed $1,100 for each such violation. Any person who 
violates section 3(m)(2)(B) shall be subject to a civil penalty 
not to exceed $1,100 for each such violation, as the Secretary 
determines appropriate, in addition to being liable to the 
employee or employees affected for all tips unlawfully kept, 
and an additional equal amount as liquidated damages, as 
described in subsection (b).]
  (2)(A) Subject to subparagraph (B), any person who violates 
section 6, 7, or 8, relating to wages, shall be subject to a 
civil fine that is not to exceed $22,030 per each employee 
affected for each initial violation of such section.
  (B) Any person who repeatedly or willfully violates section 
6, 7, or 8, relating to wages, shall be subject to a civil fine 
that is not to exceed $110,150 per each employee affected for 
each such violation.
  (C) Any person who violates section 3(m)(2)(B) shall be 
subject to a civil penalty not to exceed $12,340 for each such 
violation, as the Secretary determines appropriate, in addition 
to being liable to the employee or employees affected for all 
tips unlawfully kept, any interest on wages lost accrued at the 
prevailing rate, and an additional amount as liquidated damages 
that is equal to 2 times the amount of wages lost, as described 
in subsection (b).
  (3) Any person who violates subsection (a) or (b) of section 
5 shall--
          (A) for the initial violation of such subsection, be 
        subject to a civil fine that is not to exceed $50 per 
        each employee affected; and
          (B) for each repeated or willful violation of such 
        subsection, be subject to a civil fine that is not to 
        exceed $100 per each employee affected.
  (4) Any person who violates section 11(c) shall--
          (A) for the initial violation, be subject to a civil 
        fine that is not to exceed $1,000 per each employee 
        affected; and
          (B) for each repeated or willful violation, be 
        subject to a civil fine that is not to exceed $5,000 
        per each employee affected.
  [(3)] (5) In determining the amount of any penalty under this 
subsection, the appropriateness of such penalty to the size of 
the business of the person charged and the gravity of the 
violation shall be considered. The amount of any penalty under 
this subsection, when finally determined, may be--
          (A) deducted from any sums owing by the United States 
        to the person charged;
          (B) recovered in a civil action brought by the 
        Secretary in any court of competent jurisdiction, in 
        which litigation the Secretary shall be represented by 
        the Solicitor of Labor; or
          (C) ordered by the court, in an action brought for a 
        violation of section 15(a)(4) or a repeated or willful 
        violation of section 15(a)(2), to be paid to the 
        Secretary.
  [(4)] (6) Any administrative determination by the Secretary 
of the amount of any penalty under this subsection shall be 
final, unless within 15 days after receipt of notice thereof by 
certified mail the person charged with the violation takes 
exception to the determination that the violations for which 
the penalty is imposed occurred, in which event final 
determination of the penalty shall be made in an administrative 
proceeding after opportunity for hearing in accordance with 
section 554 of title 5, United States Code, and regulations to 
be promulgated by the Secretary.
  [(5)] (7) Except for civil penalties collected for violations 
of section 12, sums collected as penalties pursuant to this 
section shall be applied toward reimbursement of the costs of 
determining the violations and assessing and collecting such 
penalties, in accordance with the provision of section 2 of the 
Act entitled ``An Act to authorize the Department of Labor to 
make special statistical studies upon payment of the cost 
thereof and for other purposes'' (29 U.S.C. 9a). Civil 
penalties collected for violations of section 12 shall be 
deposited in the general fund of the Treasury.

                         injunction proceedings

  Sec. 17. The district courts, together with the United States 
District Court for the District of the Canal Zone, the District 
Court of the Virgin Islands, and the District Court of Guam 
shall have jurisdiction, for cause shown, to restrain 
violations of section 15, including in the case of violations 
of section 15(a)(2) the restraint of any withholding of payment 
of [minimum] wages or overtime compensation found by the court 
to be due to employees under this Act (except sums which 
employees are barred from recovering, at the time of the 
commencement of the action to restrain the violations, by 
virtue of the provisions of section 6 of the Portal-to-Portal 
Act of 1947).

                         relation to other laws

  Sec. 18. (a) No provision of this Act or of any order 
thereunder shall excuse noncompliance with any Federal or State 
law or municipal ordinance establishing a minimum wage higher 
than the minimum wage established under this Act or a maximum 
workweek lower than the maximum workweek established under this 
Act, and no provision of this Act relating to the employment of 
child labor shall justify noncompliance with any Federal or 
State law or municipal ordinance establishing a higher standard 
than the standard established under this Act. No provision of 
this Act shall justify any employer in reducing a wage paid by 
him which is in excess of the applicable minimum wage under 
this Act, or justify any employer in increasing hours of 
employment maintained by him which are shorter than the maximum 
hours applicable under this Act. The requirements of section 5 
shall not preempt or supercede any requirement under State or 
local law that an employer disclose the rate, frequency, or 
classification of pay at any time during an individual's 
employ, or that an employer provide regular paystubs or 
earnings statements to employees, so long as such requirement 
is at least as comprehensive as the requirements described 
under such section.
  (b) Notwithstanding any other provision of this Act (other 
than section 13(f)) or any other law--
          (1) any Federal employee in the Canal Zone engaged in 
        employment of the kind described in section 5102(c)(7) 
        of title 5, United States Code, and
          (2) any employee employed in a nonappropriated fund 
        instrumentality under the jurisdiction of the Armed 
        Forces,
shall have his basic compensation fixed or adjusted at a wage 
rate that is not less than the appropriate wage rate provided 
for in section 6(a)(1) of this Act (except that the wage rate 
provided for in section 6(b) shall apply to any employee who 
performed services during the workweek in a work place within 
the Canal Zone), and shall have his overtime compensation set 
at an hourly rate not less than the overtime rate provided for 
in section 7(a)(1) of this Act.

           *       *       *       *       *       *       *

                              ----------                              


                      PORTAL-TO-PORTAL ACT OF 1947




           *       *       *       *       *       *       *
PART IV--MISCELLANEOUS

           *       *       *       *       *       *       *


  Sec. 6. Statute of Limitations.--Any action commenced on or 
after the date of the enactment of this Act to enforce any 
cause of action for unpaid [minimum] wages, unpaid overtime 
compensation, or liquidated damages, under the Fair Labor 
Standards Act of 1938, as amended, the Walsh-Healey Act, or the 
Bacon-Davis Act--
          (a) if the cause of action accrues on or after the 
        date of the enactment of this Act--[may be commenced 
        within two years] may be commenced within 4 years after 
        the cause of action accrued, and every such action 
        shall be forever barred [unless commenced within two 
        years] unless commenced within 4 years after the cause 
        of action accrued, except that a cause of action 
        arising out of a willful violation [may be commenced 
        within three years] may be commenced within 5 years 
        after the cause of action accrued;
          (b) if the cause of action accrued prior to the date 
        of the enactment of this Act--may be commenced within 
        whichever of the following periods is the shorter: (1) 
        two years after the cause of action accrued, or (2) the 
        period prescribed by the applicable State statute of 
        limitations; and, except as provided in paragraph (c), 
        every such action shall be forever barred unless 
        commenced within the shorter of such two periods;
          (c) if the cause of action accrued prior to the date 
        of the enactment of this Act, the action shall not be 
        barred by paragraph (b) if it is commenced within one 
        hundred and twenty days after the date of the enactment 
        of this Act unless at the time commenced it is barred 
        by an applicable State statute of limitations;
          (d) with respect to any cause of action brought under 
        section 16(b) of the Fair Labor Standards Act of 1938 
        against a State or a political subdivision of a State 
        in a district court of the United States on or before 
        April 18, 1973, the running of the statutory periods of 
        limitation shall be deemed suspended during the period 
        beginning with the commencement of any such action and 
        ending one hundred and eighty days after the effective 
        date of the Fair Labor Standards Amendments of 1974, 
        except that such suspension shall not be applicable if 
        in such action judgment has been entered for the 
        defendant on the grounds other than State immunity from 
        Federal jurisdiction[.]; and
          (e) with respect to the running of any statutory 
        period of limitation described in this section, the 
        running of such statutory period shall be deemed 
        suspended during the period beginning on the date on 
        which the Secretary of Labor notifies an employer of an 
        initiation of an investigation or enforcement action 
        and ending on the date on which the Secretary notifies 
        the employer that the matter has been officially 
        resolved by the Secretary.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              INTRODUCTION

    All workers should be paid in full for their work, and 
Committee Republicans support enforcement of the Fair Labor 
Standards Act of 1938 (FLSA or Act), which establishes minimum 
wage, overtime pay, and recordkeeping requirements. There are 
strong remedies in place for employers who pay workers less 
than the amount to which they are entitled under the Act. 
Employers who violate these standards, whether unintentionally 
or willfully and repeatedly, are subject to remedies that may 
include back pay, liquidated damages, and civil and criminal 
penalties. Committee Republicans are committed to increasing 
compliance with the Act and believe that clear and concise 
standards, combined with compliance assistance, will benefit 
both workers and employers.
    Unfortunately, rather than treating employers as good-faith 
partners, Committee Democrats repeatedly greet job creators 
with open hostility and contempt. The FLSA is a complicated 
law, and even employers who are diligent in their efforts to 
ensure compliance with wage-and-hour standards can 
unintentionally violate the Act. Employers want to do right by 
their employees, who are their greatest asset. Despite this, 
Committee Democrats assume the worst of all employers and 
insist on advocating for one-size-fits-all mandates, 
inappropriately inserting the federal government into 
employers' day-to-day operations.
    Against this backdrop, Committee Republicans reject H.R. 
7701, the so-called Wage Theft Prevention and Wage Recovery 
Act. Simply put, the bill does little to protect the paychecks 
of American workers and will be detrimental to both employees 
and employers. H.R. 7701 will have a chilling impact on efforts 
to promote greater workplace flexibility and will severely 
limit the economic opportunities offered to individuals through 
independent contracting and the franchise model. This 
legislation will impede the Department of Labor (DOL) Wage and 
Hour Division's (WHD) ability to administer and enforce the 
FLSA, thereby delaying efforts to recover wages on behalf of 
workers. It will also bankrupt small businesses for 
unintentional or technical errors, create burdensome and 
duplicative mandates of questionable utility, and line the 
pockets of trial lawyers.
    Congress should review and clarify requirements related to 
wage-and-hour laws to promote clear and simple rules that make 
it easier to comply with the FLSA, not more difficult. H.R. 
7701 misses the mark completely in this respect. For these 
reasons, and as set forth more fully below, Committee 
Republicans are united in their strong opposition to H.R. 7701.
Punitive and Excessive Penalties
    Punitive and excessive penalties in H.R. 7701 completely 
disregard the serious compliance challenges the FLSA poses to 
employers, particularly small businesses. The bill's civil 
monetary penalties are excessive and disproportionate with 
technical or unintentional FLSA violations. For example, under 
H.R. 7701, an employer with no prior FLSA minimum wage or 
overtime violations is subject to a civil monetary penalty not 
to exceed $22,030 per each employee affected, as compared to no 
civil monetary penalty under current law. Repeat and willful 
violations of these provisions are subject to a civil monetary 
penalty not to exceed $110,150 per each employee affected for 
each violation, as compared to $2,203 per violation under 
current law.\1\ This punitive approach to FLSA enforcement, 
which fails to consider whether an employer has acted in good 
faith, is misguided.
---------------------------------------------------------------------------
    \1\29 CFR Sec.  578.3.
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    This legislation also fails to provide protections for 
small businesses lacking large employers' legal and human 
resource infrastructures. H.R. 7701's increased penalties could 
bankrupt a small business for a mere technical error, even for 
a first FLSA violation. The National Federation of Independent 
Business sent a letter to the Committee explaining how the 
bill's increased penalties represent an existential threat to 
small businesses:

          [C]onsider a small business that employs four people 
        who work 42 hours a week at a wage rate of $20 an hour. 
        That employer, who does the payroll by hand, forgets to 
        pay overtime one week. Under current law, the employer 
        must pay back wages, which would total $80, and up to 
        $10,000 in criminal penalties for a maximum liability 
        of $10,080. If H.R. 7701 were enacted, the employer 
        would owe $160 in back wages, a $22,030 fine per 
        employee, and $10,000 criminal penalty per employee 
        totaling $128,280. These penalty amounts will 
        undoubtedly put some small employers out of 
        business.\2\
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    \2\Letter from Kevin Kuhlman, Vice President, Nat. Fed. of Indep. 
Bus., to Reps. Bobby Scott (D-VA) & Virginia Foxx (R-NC) (May 17, 2022) 
(on file).

    In addition to expanding unjustly civil and criminal 
penalties that could bankrupt small businesses, larger fines 
are unlikely to speed up the recovery of wages. In the hearing 
on H.R. 7701, Tammy McCutchen, former DOL Wage and Hour 
Administrator, explained how the bill could delay remedies owed 
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to workers:

          The increases proposed are very significant, even 
        ridiculous, and I fear will be counter-productive of 
        the goals of this bill. FLSA liquidated damages would 
        increase from an amount equal to back wages to two or 
        three times back wages. Penalties would increase by 900 
        to 4,900 percent or even higher--as the bill would 
        require payment of penalties per employee rather than 
        per violation. The bill would also extend the statute 
        of limitations from two to four years for all 
        violations and from three to five years for willful 
        violations--longer than any state except for New York. 
        If found in violation of the FLSA, employers faced with 
        such massive damages and penalties, in addition to more 
        years of back wages, will have only one way to react: 
        litigate, litigate, litigate and litigate some more. 
        Payment of back wages would be delayed for years. The 
        plaintiffs' bar will collect more fees, but transitory 
        low-wage workers may see nothing at all.\3\
---------------------------------------------------------------------------
    \3\Standing Up for Workers: Preventing Wage Theft and Recovering 
Stolen Wages: Hearing Before the Subcomm. on Workforce Protections of 
the H. Comm. on Educ. & Lab., 117th Cong. (2022) (statement of Tammy 
McCutchen, Resolution Econ., at 2).

    Committee Democrats justify imposing such excessive 
penalties on employers by claiming it is cheaper to violate the 
law than to pay employees what they are owed.\4\ This is a 
blatant misrepresentation of the remedies available to workers 
under the FLSA and state laws. Under the FLSA, employers who 
violate minimum wage or overtime requirements are liable for 
unpaid wages and an additional equal amount in liquidated 
damages unless the employer can prove to the court the action 
was in good faith and there were reasonable grounds to believe 
it was not a violation of the FLSA.\5\ Depending on the 
violation, employers can incur even greater costs. Employers 
who repeatedly or willfully violate minimum wage and overtime 
provisions of the Act can be assessed civil fines of $2,203 per 
violation. DOL can assess a civil monetary penalty of $1,100 to 
employers who keep employees' tips.\6\ Attorneys' fees and 
court costs can also be awarded to employees.\7\
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    \4\Id. (statement of Rep. Alma Adams (D-NC)).
    \5\29 U.S.C. Sec. Sec.  216(b), 260.
    \6\Consolidated Appropriations Act, 2018, Pub. L. No. 115-141, tit. 
XII, 132 Stat. 348 (2018).
    \7\29 U.S.C. Sec.  216(c).
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    Ultimately, H.R. 7701's increased penalties will primarily 
harm good-faith employers who try to comply with confusing and 
complex FLSA regulations and it will not help workers. Finally, 
it is worth noting that it is not workers who collect payments 
from these civil and criminal penalties: it is the Department 
of Labor.\8\ This reality suggests that these punitive fines 
will incentivize the Labor Department to seek the highest 
penalties possible in every case, even for questionable 
violations.
---------------------------------------------------------------------------
    \8\29 U.S.C. Sec.  216(e)5.
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Significant and Unwarranted Mandates
    H.R. 7701 burdens employers with new onerous recordkeeping 
and informational mandates, resulting in unnecessary red tape 
and conflicting federal and state requirements. These burdens 
add to already costly and complex DOL regulations. To date, the 
Biden DOL's overall net regulatory costs totaled more than $4 
billion and added over 100 million hours of paperwork 
burden.\9\
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    \9\Am. Action Forum, Regulation Rodeo, https://regrodeo.com/
?year%5B0%5D=&year%5B1
%5D=2022&year%5B2%5D=2021&agency%5B0%5D=Labor.
---------------------------------------------------------------------------
    H.R. 7701's pay stub and informational mandates are 
reminiscent of extreme requirements implemented by the states 
of New York and California and would be inappropriate for 
nationwide implementation. These mandates impose significant 
compliance burdens that increase costs to employers. Ms. 
McCutchen described the bill's pay stub and informational 
mandates as duplicative and likely to add confusion for 
employers, resulting in the plaintiffs' bar collecting more 
fees:

          Every state has its own paystub disclosure 
        requirements, ensuring employees already receive an 
        earning statement that includes hours worked, pay rate, 
        gross and net wages, deductions and more. An additional 
        layer of regulation would not add to the worker 
        protections already there under state and federal law. 
        Plaintiffs' attorneys have made a lot of money from 
        California class actions for minor violations of that 
        state's paystub disclosure violations (for example, 
        listing regular hours and overtime hours, but not 
        adding them together to show the total hours). Perhaps 
        the goal here is to make a federal case out of such 
        minor violations, allowing the plaintiffs' bar to 
        export California litigation to the rest of the 
        country.
          State laws also govern the frequency and timing of 
        pay, including final pay: Some shorter than the 14-day 
        standard proposed in the bill, and some longer. Having 
        both federal and state laws on this topic would only 
        lead to more complexity and confusion when employers 
        try to figure out which law is more protective, the new 
        FLSA provisions or the existing state law 
        provisions.\10\
---------------------------------------------------------------------------
    \10\McCutchen statement, supra note 3, at 3-4.

    Not only are these mandates duplicative and burdensome, but 
they will result in fining employers who pay their employees in 
full but err in filling out bureaucratic forms. For example, an 
employer could face fines for technical errors on wage 
statements such as a mistake in an employer's name or address 
or wrong dates of the payroll period, even if all employees are 
paid correctly and no employee suffered any harm.
    Workers and businesses would benefit from easy-to-
understand wage-and-hours rules, not from impossible compliance 
burdens and red tape. Instead of simplifying the FLSA or 
assisting with compliance, H.R. 7701's onerous mandates will 
punish good-faith employers and provide plaintiffs' lawyers 
fertile ground to file frivolous lawsuits.
Chilling Workplace Flexibility
    H.R. 7701's compliance burdens, monetary penalties, and 
litigation risks on job creators would have a chilling impact 
on independent contracting and business-to-business 
relationships like the franchise model. The risk of litigation 
and monetary penalties under H.R. 7701 for potential technical 
or disputed FLSA violations would cause companies to avoid 
these alternative business models.
    Modern workers seek opportunities as independent 
contractors which allow them entrepreneurial freedom and 
flexibility. Companies also seek out independent contractors to 
fill workforce needs and find the right talent at the right 
time. Franchising creates a proven path for entrepreneurs to 
become their own boss. Undermining independent work and 
franchising opportunities would kill jobs that millions of 
hardworking Americans enjoy. A comprehensive study on the U.S. 
independent workforce found that 59 million Americans performed 
freelance work in 2021, representing more than one-third of the 
U.S. workforce. Not only do independent workers represent a 
large share of the workforce, but they contributed $1.3 
trillion in annual earnings to the U.S. economy.\11\ 
Additionally, in 2021, the total output generated by franchise 
establishments was $787.7 billion. Despite economic headwinds, 
franchising added a net 660,300 jobs in 2021.\12\
---------------------------------------------------------------------------
    \11\Press Release, Upwork Study Finds 59 Million Americans 
Freelancing Amid Turbulent Labor Market (Dec. 8, 2021), https://
investors.upwork.com/news-releases/news-release-details/upwork-study-
finds-59-million-americans-freelancing-amid.
    \12\Int'l Franchise Ass'n, 2022 Franchising Economic Outlook, 
https://www.franchise.org/sites/default/files/2022-02/
2022%20Franchising%20Economic%20Outlook.pdf.
---------------------------------------------------------------------------
    Reducing independent contractor opportunities would also 
take away individuals' right to earn a living as they see fit. 
A survey conducted by MBO Partners highlights why so many 
workers want to engage in independent contract work: two out of 
3 full-time independent workers believe they are more secure 
than traditional workers; 87 percent say they happier working 
independently; and 78 percent say they are healthier working 
independently.\13\
---------------------------------------------------------------------------
    \13\MBO Partners, 11th Annual State of Independence: The Great 
Realization, https://www.mbopartners.com/state-of-independence/.
---------------------------------------------------------------------------
    H.R. 7701 threatens the livelihoods of millions of 
Americans who are independent contractors or work in the 
franchise industry through fear of failing to comply with 
burdensome mandates and excessive fines. This would be a sad 
reality for independent workers who say they are happier and 
healthier as independent contractors and entrepreneurs who 
found success through the franchise business model.

Private Enforcement of the FLSA

    Section 302 of H.R. 7701 provides federal grants to certain 
private entities to police businesses on behalf of DOL. These 
grants are intended to assist in the enforcement of the FLSA, 
reduce violations, and assist employees in wage recovery.
    However, it is improper for Congress to deputize private 
organizations to perform enforcement activities traditionally 
conducted by DOL. It is also highly inappropriate to delegate 
enforcement authority to private entities such as labor unions 
and employee advocacy organizations whose interests are 
antagonistic to the interests of those they are regulating. 
Enforcing the FLSA should be a government function conducted by 
disinterested state officials, not adversarial private entities 
with potential ulterior motives.
    Another concern with Section 302 is that it could delay WHD 
investigations and the recovery of wages for workers. The U.S. 
Chamber of Commerce explained in a letter:

          The bill's Grant Program would deputize advocates to 
        help conduct investigations. This would eradicate the 
        long tradition of employers voluntarily cooperating 
        with agency investigations, producing documents, and 
        welcoming investigators into their worksites. If the 
        Department of Labor brings along unions and advocates, 
        employers would likely stop cooperating and insist on 
        search warrants and document subpoenas, in accordance 
        with the Fourth Amendment. Again, more complexity, 
        longer investigations, and more litigation will harm 
        low-wage workers by delaying payment of wages.\14\
---------------------------------------------------------------------------
    \14\Letter from Neil Bradley, Exec. Vice President, U.S. Chamber of 
Com., to Reps. Bobby Scott (D-VA) & Virginia Foxx (R-NC) (May 18, 2022) 
(on file).

    Further, the grant program could provide union organizers 
access to employers and industries they seek to unionize. As 
grant recipients, labor unions could be given authority to 
visit workplaces, conduct orientations with employees, and 
assist in the enforcement of the FLSA. This new policy would 
undoubtedly encourage labor unions to get involved in wage-and-
hour enforcement in non-unionized facilities as a means of 
gaining access to employees, where the union normally would not 
have access. The grant program could become a taxpayer-funded 
union organizing tool.

Republican Amendments

    During consideration of H.R. 7701, Committee Republicans 
offered several amendments that would have improved the bill. 
Unfortunately, the amendments were rejected by Committee 
Democrats on party-line votes.
    Rep. Fred Keller (R-PA) offered an amendment to clarify, 
for the purposes of the new mandates in the bill, that the core 
factors in determining a worker's classification as an employee 
or independent contractor are the nature and degree of an 
individual's control over his or her work and the opportunity 
to earn profits or incur losses based on individual initiative. 
This amendment would have ensured that red tape would not 
interfere with the ability of workers and companies to enter 
into flexible work arrangements.
    Rep. Bob Good (R-VA) offered an amendment that would exempt 
employers with fewer than 10 employees or annual gross volume 
of business under $1,000,000 from the provisions in the bill 
increasing certain civil penalties. Many small business owners 
process their own payroll and do not have access to a team of 
lawyers to interpret the complex provisions in the FLSA. 
Unfortunately, Committee Democrats chose not to protect these 
small businesses owners from outrageously inflated civil 
monetary penalties and rejected the amendment.
    Rep. James Comer (R-KY) offered an amendment to codify a 
joint employer standard that ensures employers who lack direct 
and immediate control over an individual's essential terms and 
conditions of employment are not subject to the disclosure and 
compensatory requirements in the bill. Rep. Comer's amendment 
would have codified a clear and reliable joint employer 
standard that protects the franchise business model and small 
business owners.
    Rep. Mariannette Miller-Meeks (R-IA) offered an amendment 
to strike the underlying legislation and replace it with H.R. 
5743, the Ensuring Workers Get PAID Act. This amendment would 
have reinstated and made permanent the Trump administration's 
Payroll Audit Independent Determination (PAID) program. The 
PAID program assisted job creators with FLSA compliance and 
ensured workers receive back wages in a timelier manner than 
traditional investigations. Unfortunately, Committee Democrats 
rejected this effort to make sure workers quickly recover back 
wages.

                               CONCLUSION

    Changes in the American workforce expose the rigid and 
outdated nature of the FLSA. It is long-past time for reform. 
However, H.R. 7701 would compound the problems that exist in 
the current law rather than improve it. Instead of assisting 
employers with compliance and reducing outdated red tape, this 
legislation threatens to bankrupt small businesses for minor, 
technical, or unintentional FLSA violations; this is a 
troubling prospect, since small businesses have accounted for 
66 percent of employment growth over the last 25 years.\15\
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    \15\Daniel Wilmoth, U.S. Small Bus. Admin Off. of Advoc., Small 
Business Job Creation (Apr. 2022), https://cdn.advocacy.sba.gov/wp-
content/uploads/2022/04/22141927/Small-Business-Job-Creation-Fact-
Sheet-Apr2022.pdf.
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    H.R. 7701 is not a win for workers, job creators, or the 
American economy. This Democrat bill makes it more difficult to 
operate a business and reduces opportunities for entrepreneurs 
and workers. Instead of imposing outrageous fines and mandates 
on employers, Congress should simplify the FLSA to ensure good-
faith employers can easily operate within the law and pay 
workers in full and on time. The bill does nothing to meet the 
needs of workers, employers, or the 21st century economy. For 
these reasons, and those set forth above, we strongly oppose 
enactment of H.R. 7701 as reported by the Committee on 
Education and Labor.

                                   Virginia Foxx,
                                           Ranking Member.
                                   Joe Wilson.
                                   Glenn ``GT'' Thompson.
                                   Tim Walberg.
                                   Glenn Grothman.
                                   Elise M. Stefanik.
                                   Rick W. Allen.
                                   Jim Banks.
                                   James Comer.
                                   Russ Fulcher.
                                   Fred Keller.
                                   Mariannette Miller Meeks, M.D.
                                   Burgess Owens.
                                   Bob Good.
                                   Lisa C. McClain.
                                   Diana Harshbarger.
                                   Mary E. Miller.
                                   Scott Fitzgerald.
                                   Madison Cawthorn.
                                   Chris Jacobs.

                                  [all]