Montgomery County's Living Wage law raised wages for employees of county contractors -- but some slick operators were cheating their employees without penalty. The County Council passed a strong enforcement package Feb. 2 to prevent this abuse.

Montgomery County’s Council has passed (Feb. 2) a tough package of measures to put enforcement teeth into its law requiring a living wage be paid by all businesses doing contract work for the county. Progressive Maryland strongly supported the measures and testified with an eye to strengthening the package even more – an effort that succeeded.

The current living wage standard for county contractors is $14.25 an hour. Investigations indicated that the county’s understaffed regulatory agencies were failing to strictly enforce the laws and that some contracting companies were cheating the law and paying their workers far less than the living-wage level—as little as $8-9.

According to the Washington Post, about 140 other jurisdictions around the US have living wage laws, and Montgomery’s new enforcement provisions were adapted from those in other jurisdictions.

As the enforcement package was discussed during a Council hearing in December, Progressive Maryland staff member Justin Vest testified that “It is not enough to have such a law in place if unscrupulous employers are able to skirt its requirements without penalty. When employers cheat the system and fail to pay their workers what they are due, the consequences to families can be severe.”

As approved, Bill 43-15 accomplishes the following:

• Requires detailed payroll records to be submitted quarterly to the Office of Procurement and requires the County to retain those records for at least five years.
• Establishes strong penalties, such as suspension and debarment, for a Living Wage law violation.
• Requires the County to perform regular and random audits and allows the County to recover costs for performing an audit as a result of an enforcement action.
• Prohibits an employer from making a deduction for any item necessary for an employee to perform the essential job function.
• Allows the County to withhold payment to a contractor found in violation of the Living Wage law.
• Removes the exemption in the Living Wage law for employees subject to collective bargaining agreements.

 
One frequent loophole, as indicated, was that companies would make deductions from workers’ paychecks without their permission or knowledge. Vest and other advocates argued that the county should be able to quickly recover money from lawbreaking contractors by withholding payment so as to compensate workers who had been cheated under the law. It is important, he said, that “the County … have authority and financial means to pay [workers] the wages they are due. Therefore we support this bill’s proposal to allow the County to withhold payment to contractors who have violated the living wage statute for the purpose of paying back wages and recouping damages.”

The Council debated, then approved deleting a “carve-out” that exempted unionized workers from the provisions of the Living Wage law. Vest argued “it should not be the policy of the Council to exclude organized workers from any workplace protections.”

 “As wages stagnate and anti-labor policies become increasingly commonplace nationwide,” Vest testified, “it is crucial for Montgomery county to set itself apart as a progressive community that protects the hard fought victories of working people.”

The co-sponsors of the enforcement package, Council members Nancy Novarro and Marc Elrich, expressed satisfaction with the outcome. “Bill 43-15 provides teeth to ensure the County can enforce [the Living Wage law] appropriately,” Novarro said. “Now, workers and the County will have recourse if an employer is not paying their employees fairly."

Elrich added “It is unfortunate that certain unscrupulous business owners managed to subvert the intent of the law, to the detriment of their employees. As amended today, the law now has clear reporting requirements and distinct penalties for not paying employees on County contracts a living wage.”

Councilmembers George Leventhal and Hans Riemer co-sponsored the bill along with the lead sponsors Novarro and Elrich. County Executive Ike Leggett will have 10 days to approve the bill after he receives it from the Council. The bill will take effect 91 days after it is signed by the county executive.