2021 -- S 0143

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LC001277

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS --MINIMUM WAGES

     Introduced By: Senator Frank A. Ciccone

     Date Introduced: January 26, 2021

     Referred To: Senate Labor

     It is enacted by the General Assembly as follows:

     SECTION 1. Legislative findings:

     (1) Promoting the welfare of the citizens of Rhode Island, its most important asset, and

those who work within the State’s borders is of the foremost importance to the General Assembly;

and

     (2) After years of inaction by the United States Congress, it is time for States to lift families

out of poverty and stimulate the economy by raising the minimum wage; and

     (3) The cost of living in Rhode Island has increased, it currently costs a Rhode Island

resident between two to three times the Federal Poverty just to meet their basic needs; and

     (4) The minimum wage does not provide a living wage for Rhode Island families. The

Economic Progress Institute in its 2018 Standard of Need publication has calculated that full-time

minimum wage workers in Rhode Island are unable to meet their basic needs; and

     (5) An estimated 20,200 workers in the State of Rhode Island work for minimum wage and

close to 1 in 4 minimum wage workers are parents; and

     (6) Phasing in the wage increase over time will allow businesses to adjust and result in

reasonable annual increases in expenses.

     SECTION 2. Sections 28-12-2, 28-12-3 and 28-12-5 of the General Laws in Chapter 28-

12 entitled "Minimum Wages" are hereby amended to read as follows:

     28-12-2. Definitions.

     As used in this chapter:

     (1) "Advisory board" means a board created as provided in § 28-12-6;

     (2) "Commissioner" means the minimum-wage commissioner appointed by the director of

labor and training as chief of the division of labor standards;

     (3) "Director" means the director of labor and training, or his or her duly authorized

representative;

     (4) "Employ" means to suffer or to permit to work;

     (5) "Employee" means any person who performs work for an employer for monetary

compensation within the State, to include persons who perform work for an employer on a full-

time, part-time, seasonal or temporary basis includes any individual suffered or permitted to work

by an employer;

     (6) "Employee" shall not include:

     (i) Any individual employed in domestic service or in or about a private home;

     (ii) Any individual employed by the United States;

     (iii) Any individual engaged in the activities of an educational, charitable, religious, or

nonprofit organization where the employer-employee relationship does not, in fact, exist, or where

the services rendered to the organizations are on a voluntary basis;

     (iv) Newspaper deliverers on home delivery, shoe shiners in shoe shine establishments,

caddies on golf courses, pin persons in bowling alleys, ushers in theatres;

     (v) Traveling salespersons or outside salespersons;

     (vi) Service performed by an individual in the employ of his or her son, daughter, or spouse

and service performed by a child under the age of twenty-one (21) in the employ of his or her father

or mother;

     (vii) Any individual employed between May 1 and October 1 in a resort establishment that

regularly serves meals to the general public and that is open for business not more than six (6)

months a year;

     (viii) Any individual employed by an organized camp that does not operate for more than

seven (7) months in any calendar year. However, this exemption does not apply to individuals

employed by the camp on an annual, full-time basis. "Organized camp" means any camp, except a

trailer camp, having a structured program including, but not limited to, recreation, education, and

religious, or any combination of these.

     (7) "Employer" includes any individual, partnership, association, corporation, business

trust, or any person, or group of persons, acting directly, or indirectly, in the interest of an employer,

in relation to an employee and shall include the State of Rhode Island;

     (8) "Occupation" means any occupation, service, trade, business, industry, or branch or

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group of industries or employment or class of employment in which individuals are gainfully

employed;

     (9) "Wage" means compensation due to an employee by reason of his or her employment;

     (10) “Consumer Price Index – All Urban Consumers” (“CPI-U”) means the national,

annual average of the Consumer Price Index for all urban consumers as reported by the United

States Bureau of Labor Statistics, with the Series identification number of CUUR0000SA0.

     28-12-3. Minimum wages.

     (a) Every employer shall pay to each of his or her employees: commencing July 1, 1999,

at least the minimum wage of five dollars and sixty-five cents ($5.65) per hour. Commencing

September 1, 2000, the minimum wage is six dollars and fifteen cents ($6.15) per hour.

     (b) Commencing January 1, 2004, the minimum wage is six dollars and seventy-five cents

($6.75) per hour.

     (c) Commencing March 1, 2006, the minimum wage is seven dollars and ten cents ($7.10)

per hour.

     (d) Commencing January 1, 2007, the minimum wage is seven dollars and forty cents

($7.40) per hour.

     (e) Commencing January 1, 2013, the minimum wage is seven dollars and seventy-five

cents ($7.75) per hour.

     (f) Commencing January 1, 2014, the minimum wage is eight dollars ($8.00) per hour.

     (g) Commencing January 1, 2015, the minimum wage is nine dollars ($9.00) per hour.

     (h) Commencing January 1, 2016, the minimum wage is nine dollars and sixty cents ($9.60)

per hour.

     (i) Commencing January 1, 2018, the minimum wage is ten dollars and ten cents ($10.10)

per hour.

     (j) Commencing January 1, 2019, the minimum wage is ten dollars and fifty cents ($10.50)

per hour.

     (k) Commencing October 1, 2020, the minimum wage is eleven dollars and fifty cents

($11.50) per hour.

     (l) Commencing July 1, 2021, the minimum wage is thirteen dollars ($13.00) per hour.

     (m) Commencing July 1, 2022, the minimum wage is fourteen dollars ($14.00) per hour.

     (n) Commencing July 1, 2023, the minimum wage is fifteen dollars ($15.00) per hour.

     (o) Commencing July 1, 2024 and each July 1st thereafter, the minimum wage then in

effect shall be increased by the increase, if any, in the cost of living. The increase in the cost of

living shall be measured by the percentage increase, if any, as of August of the previous year over

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the level as of August of the year preceding that year in the Consumer Price Index for All Urban

Consumers, CPI-U, for the Northeast Region, or its successor index, as published by the United

States Department of Labor, Bureau of Labor Statistics or its successor agency, with the amount of

the minimum wage increase rounded to the nearest multiple of 5 cents.

     28-12-5. Employees receiving gratuities.

     (a) Every employer shall pay to each of his or her employees who are engaged in any work

or employment in which gratuities have customarily and usually constituted a part of his or her

weekly income, the rate as provided by §§ 28-12-3 and 28-12-3.1.

     (b) Allowance for gratuities as part of the hourly wage rate for restaurants, hotels, and other

industries, except taxicabs and limited public motor vehicles, shall be an amount equal to the

applicable minimum rates as provided by §§ 28-12-3 and 28-12-3.1 less two dollars and eighty-

nine cents ($2.89) per hour. "Gratuities" means voluntary monetary compensation received directly

or indirectly by the employee for services rendered.

     (c) Each employer desiring to deduct for gratuities as part of the minimum rates as provided

in §§ 28-12-3 and 28-12-3.1 wages paid to an employee shall provide substantial evidence that the

amount shall be set out in the formula in subsection (b) of this section; however, the cash wage

shall not be less than two dollars and eighty-nine cents ($2.89) per hour; provided, however, that

commencing January 1, 2016, the cash wage shall increase by fifty cents ($.50) to an amount not

less than three dollars and thirty-nine cents ($3.39) per hour; provided further, that commencing

January 1, 2017, the cash wage shall increase by fifty cents ($.50) to an amount not less than three

dollars and eighty-nine cents ($3.89) per hour; provided further that as of July 1, 2021 the cash

wage shall no less than half the minimum wage established by §§ 28-12-3 and 28-12-3.1.

     (d) The director of labor and training shall notify employers concerning what type of proof

shall be accepted as substantial evidence for the purpose of this subsection. Employees involved

shall be entitled to a hearing on the question of the amount of deduction if they so desire.

     (e) In cases where wages are figured by the employer on an incentive basis in such a manner

that an employee of reasonable average ability earns at least the minimum wage established by §§

28-12-3 and 28-12-3.1, it shall be taken that the employer has complied with this statute. It shall be

of no concern to the director of labor and training how the employer arrives at its wage scale so

long as it is not unreasonable in its demands on the employee.

     (f) Where, in the case of the employment of a full-time student who has not attained his or

her nineteenth (19th) birthday engaged in the activities of a nonprofit association or corporation,

whose aims and objectives are religious, educational, librarial, or community service in nature, the

employer-employee relationship does exist, the employer shall pay to each such employee wages

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at a rate of not less than ninety percent (90%) of the minimum wage as specified in § 28-12-3. In

case of any conflict between provisions of this section and those of § 28-12-3.1, the provisions of

§ 28-12-3.1 shall govern.

     SECTION 3. Chapter 28-12 of the General Laws entitled "Minimum Wages" is hereby

amended by adding thereto the following section:

     28-12-26. Effect of declaration of state of emergency.

     (a)For work performed during a declared state of emergency, the effective minimum wage

established by this Act shall be calculated at 1.5 times the regular minimum wage rate under § 28-

12-3.

     (b) The provisions of this section shall not apply to work performed under a teleworking

arrangement allowing the Employee to work from home.

     (c) This shall take effect July 1, 2022.

     SECTION 4. Sections 28-14-19 and 28-14-19.2 of the General Laws in Chapter 28-14

entitled "Payment of Wages" are hereby amended to read as follows:

     28-14-19. Enforcement powers and duties of director of labor and training.

     (a) It shall be the duty of the director to insure ensure compliance with the provisions of

this chapter and chapter 12 of this title. The director or his or her designee may investigate any

violations thereof, institute or cause to be instituted actions for the collection of wages and institute

action for penalties or other relief as provided for within and pursuant to those chapters. The

director or his or her authorized representatives are empowered to hold hearings and he or she shall

cooperate with any employee in the enforcement of a claim against his or her employer in any case

whenever, in his or her opinion, the claim is just and valid.

     (b) Upon receipt of a complaint or conducting an inspection under applicable law, the

director or his or her appropriate departmental designee is authorized to investigate to determine

compliance with chapter 12 of this title and/or this chapter.

     (c) With respect to all complaints deemed just and valid, the director or his or her designee

shall within fifteen (15) business days of receipt of the complaint order a hearing thereon at a time

and place to be specified, and shall give notice thereof, together with a copy of the complaint or the

purpose thereof, or a statement of the facts disclosed upon investigation, which notice shall be

served personally or by mail on any person, business, corporation, or entity of any kind affected

thereby. The hearing shall be scheduled within thirty (30) days of service of a formal complaint as

provided herein. The person, business, corporation, or entity shall have an opportunity to be heard

in respect to the matters complained of at the time and place specified in the notice. The hearing

shall be conducted by the director or his or her designee. The hearing officer in the hearing shall be

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deemed to be acting in a judicial capacity, and shall have the right to issue subpoenas, administer

oaths, and examine witnesses. The enforcement of a subpoena issued under this section shall be

regulated by Rhode Island civil practice law and rules. The hearing shall be expeditiously

conducted and upon such hearing the hearing officer shall determine the issues raised thereon and

shall make a determination and enter an order within thirty (30) days of the close of the hearing,

and forthwith serve a copy of the order, with a notice of the filing thereof, upon the parties to the

proceeding, personally or by mail. The order shall dismiss the complaint or direct payment of any

wages and/or benefits found to be due and/or award such other appropriate relief or penalties

authorized under chapter 12 of this title and/or this chapter, and the order may direct payment of

reasonable attorney's fees and costs to the complaining party. Interest at the rate of twelve percent

(12%) per annum shall be awarded in the order from the date of the nonpayment to the date of

payment.

     (d) The order shall also require payment of a further sum as a civil penalty in an amount

up to two (2) times the total wages and/or benefits found to be due, or for violations of the minimum

wage provisions of this chapter a civil penalty of one hundred dollars ($100) per day for each day

that a violation occurred, exclusive of interest, which shall be shared equally between the

department and the aggrieved party. In determining the amount of any penalty to impose, the

director or his or her designee shall consider the size of the employer's business, the good faith of

the employer, the gravity of the violation, the previous violations and whether or not the violation

was an innocent mistake or willful.

     (e) The director may institute any action to recover unpaid wages or other compensation or

obtain relief as provided under this section with or without the consent of the employee or

employees affected.

     (f) No agreement between the employee and employer to work for less than the applicable

wage and/or benefit rate or to otherwise work under and/or conditions in violation of applicable

law is a defense to an action brought pursuant to this section.

     (g) The director shall notify the contractors' registration board of any order issued or any

determination hereunder that an employer has violated chapter 12 of this title, this chapter and/or

chapter 13 of title 37. The director shall notify the tax administrator of any determination hereunder

that may affect liability for an employer's payment of wages and/or payroll taxes.

     (h) Commencing December 31, 2021, the director shall provide a bi-annual report to the

Senate Finance Committee Chair and the House Finance Committee chair a complete list of all

complaints filed for alleged violations of the Minimum Wage provisions of this chapter which

details the status of each complaint and any other enforcement action pursued by the director or his

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or her designee.

     28-14-19.2. Private right of action to collect wages or benefits and for equitable relief.

     (a) Any employee or former employee, or any organization representing such an employee

or former employee aggrieved by the failure to pay wages and/or benefits or misclassification in

violation of chapter 12 of this title and/or this chapter may file a civil action in any court of

competent jurisdiction to obtain relief. An aggrieved party shall be entitled to recover any unpaid

wages and/or benefits, compensatory damages, and liquidated damages in an amount up to two (2)

times the amount of unpaid wages and/or benefits owed, as well as an award of appropriate

equitable relief, including reinstatement of employment, fringe benefits and seniority rights, and

reasonable attorney's fees and costs, and/or such other appropriate relief or penalties authorized

under chapter 12 of this title and/or this chapter. Any judgment rendered in favor of the employee

shall include an award of all costs associated with the filing the civil action including, but not

limited to, reasonable attorney’s fees and costs. In determining the amount of any penalty imposed

under this section, consideration shall be given to the size of the employer's business, the good faith

of the employer, the gravity of the violation, the history of previous violations, and whether or not

the violation was an innocent mistake or willful. Any unpaid fringe benefit contributions owed

pursuant to this section in any form shall be paid to the appropriate benefit fund: however, in the

absence of an appropriate fund, the benefit shall be paid directly to the aggrieved employee.

     (b) An action instituted pursuant to this section may be brought by one or more employees

or former employees individually and/or on behalf of other employees similarly situated.

     (c) No agreement between the employee and employer to work for less than the applicable

wage and/or benefit rate or to otherwise work under terms and/or conditions in violation of

applicable law is a defense to an action brought pursuant to this section.

     (d) An employer's responsibility and liability hereunder is solely to the employer's own

employees.

     (e) A civil action filed under this section may be instituted instead of, but not in addition

to, the director of labor and training enforcement procedures authorized by the above referenced

chapters, provided the civil action is filed prior to the date the director of labor and training issues

notice of an administrative hearing.

     (f) The filing of a civil action under this section shall not preclude the director of labor and

training from investigating the matter and/or referring the matter to the attorney general,

contractors' registration board and/or the tax administrator.

     (g) Any claim hereunder shall be forever barred unless commenced within three (3) years

after the cause of action accrued.

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     SECTION 5. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO LABOR AND LABOR RELATIONS --MINIMUM WAGES

***

     This act would provide for an increase in the minimum wage commencing July 1, 2021, to

$13.00 per hour with a $1.00 increase to that amount on July 1, 2022, and on July 1, 2023. The act

would further provide for an annual increase thereafter commencing July 1, 2024, to an amount

calculated to be equal to an increase in the cost of living using the Consumer Price Index for All

Urban Consumers Northeast Region. The act also provides for a temporary increase to the

minimum wage for in person work performed during a declared emergency and would provide for

civil penalties of $100 per day for each violation of the minimum wage provisions.

     This act would take effect upon passage.

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