Cincinnati City Council recently enacted an anti-wage theft and payroll fraud ordinance designed to protect workers and insure that those doing business with the City pay their legal share of taxes and other financial obligations. The Ordinance is also designed to protect law-abiding employers from unfair competition from businesses that are willing to break the law to make a profit.
Cincinnati’s new Ordinance incorporates rules for reporting theft, a wage recovery policy and debarment penalties prohibiting companies found guilty of wage theft from doing future business with the City. As defined in the Ordinance, wage theft means not properly paying workers for all work performed – most commonly by paying less than minimum wage, not paying for all hours worked, or failing to pay overtime, in violation of existing local, state or federal law. Payroll fraud is described as concealing a business’ true tax or financial liability through tax evasion or fraud, misclassification of workers as independent contractors when they are actually employees, unreported or underreported payment of wages, or paying for a business transaction in cash without appropriate records.
Authored by Vice Mayor David Mann, the Ordinance (22-2016) is the first of its kind in Ohio. Similar ordinances have been enacted by cities across the country that determined wage and hour laws were not being adequately enforced by State and Federal governments.