The Newark City Council passed a law co-sponsored by Councilman Anibal Ramos Jr. that will allow it to protect workers from having their wages stolen by employers.

The wage theft ordinance allows Newark to suspend or revoke business licenses of employers found to be in violation of state laws governing proper compensation for employees.

“Businesses that practice wage theft don’t just harm their own workers, they undercut business owners that play by the rules and treat their employees with respect,” Ramos said. “Because the state’s current powers to penalize bad actors are limited, there’s a real need for local governments to step in and protect the basic rights of their constituents.”

In cities without wage theft laws, workers denied wages they have earned must attempt a lengthy administrative process at the NJ State Department of Labor and Workforce Development Wage and Hour Division, which having rendered a judgment, cannot impose penalties beyond the amount the unpaid worker is owed. Proponents of local wage theft laws say that the current system allows workers to repeatedly violate state wage laws and consider any state penalties “a cost of doing business.”

“No employee should be robbed of the wages they were promised or earned through their own hard work,” said Councilman Eddie Osborne, who also sponsored the wage theft ordinance. “This ordinance will giving meaningful economic security to thousands of families and we hope it is a model our sister cities around the state will follow.” 

Newark is the 4th city in New Jersey to pass a wage theft law, with Jersey City set to follow soon. 

“We thank the Newark City Council for taking a stand against unscrupulous employers on behalf of the people who live and work in their city,” said Louis Kimmel, executive director of New Labor, a leader in the fight against wage theft state wide. “This law will give Newark the tools it needs to go after employers that exploit low-wage and immigrant workers, and we look forward to working with the city to make sure that everyone who works in Newark gets to keep the wages they have been promised.”

Under the ordinance, an employer has committed wage theft when they are found liable in a judicial or administrative hearing of violating state laws that regulate the payment of wages or the collection of debt owed to unpaid wages.

A 2008 survey of large cities found that 64 percent of low-wage workers have experienced some form of wage-theft in the prior week, with 26 percent paid under the minimum wage and 76% denied overtime. On average victims of wage theft lose 15% of their earnings a year. In 2011, the Seton Hall Law School for Social Justice surveyed Day Laborers across New Jersey and found that many of them don’t know their rights and are reluctant to use legal recourse to enforce them.

“It’s not enough to have a strong minimum wage. We need laws on the books that deter shady employers from violating those laws and taking advantage of their own workers,” said Analilia Mejia, executive director of New Jersey Working Families. “Today is another strong example of how local governments can pass innovative laws that protect and lift up working families. We hope that other local and state lawmakers are watching closely.”

New Brunswick was the first municipality in New Jersey to pass a wage theft law, followed by Princeton and Highland Park. A similar measure passed its first reading in Jersey City in June, and is expected to come to a final vote in July. Partners advancing local wage theft ordinances include New Jersey Working Families, New Labor, Unity Square and the New Jersey Immigrant Justice Alliance.