Commentary

Another tool for local governments to combat wage theft

Our neighbors in the Midwest Money Exchangehad a big victory earlier this year when Cincinnati passed an innovative ordinance aimed at reducing wage theft. Recognizing the devastating impact of this common problem on workers and the local economy, Cincinnati is setting expectations for companies that do business with the city or that receive incentives. These companies must disclose prior labor law violations as part of the bidding process and report to the city any wage or payroll fraud complaints received from employees (including employees of subcontractors) during the performance of the contract. In turn, the city will refer complaints to appropriate agencies and, if an adverse determination is issued, will take steps such as termination of the contract, reduction of the incentives payment, and/or debarment from future contracts.

In 2013, the NC General Assembly clamped down on local governments’ ability to take some of these steps in our state. In its expansion of the public policy known as “preemption,” the state now prohibits cities and counties from placing certain requirements on their contractors. Local governments in North Carolina do have the ability to take some measures to improve worker wellbeing in their communities, as explained in our brief The power of wage policies: how raising public sector wages can promote living incomes and boost the economy  – but legislative action is required to enable North Carolina communities to follow Cincinnati’s lead and put other proactive measures into place to protect workers’ wages.

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