Houston is Poised to Pass Precedent-Setting Wage Theft Ordinance

Update: Due to an error on the Houston City Secretary's website, this agenda item was erroneously listed as passed, but is instead tabled until next week. We regret the error but continue to support its passage. The article has been modified to correct the current status of this ordinance.

Three months ago, TexasGOPVote reported that the City of Houston was looking at passing an ordinance to crack down on city contractors who engage in the unethical and illegal practice of wage theft from their workers. City Council is poised to pass an ordinance that is being called "precedent-setting" by supporters of the effort to stop wage theft. Houston would be the first Texas city to pass such an ordinance.  

The ordinance brings real teeth to enforcing the law on companies that are found guilty of wage theft. Contractors for the city and people who have an occupational license issued by the city who are found guilty of this offense will be entered into a city database for a period of five years and will not be able to enter into new contracts with the city. Occupational licenses for offenders will not be renewed under this ordinance.

Often times, wage theft is a side effect of worker misclassification. This is where companies will violate the law by classifying workers as independent contractors rather than employees as required by law. Companies will then work these contractors over 40 hours per week and not pay any overtime. Many times they will simply pay them for fewer hours than they actually work, or may not pay them at all.

According to a statement from HoustonWorkers.org's Jessica Alvarenga, "Despite Houston’s overall economic strength and growth, many working families struggle to make ends meet. More than 100 wage and hour violations occur each week, affecting workers employed across multiple industries. A recent report estimates that more than $753 million in wages are illegally withheld from low-wage workers in the Houston area each year and nationally studies found that 68% of low-wage workers experienced wage violations each week."

Michael Kubosh, a Houston business owner and candidate for Houston City Council, At Large Position 3, took exception to the practice of wage theft. "I support this measure,"The companies that are guilty of this practice should not be able to advance their business by stealing from their employees. Theft is wrong and the city should do its part by not licensing or otherwise doing business with the guilty parties."

Failure to pay an employees hard earned wages is not only illegal, it is unethical and immoral. It causes many people to have to resort to welfare to survive because of being cheated out of their labor. Employees are protected by the Texas Workforce Commission under the Texas Payday Law. But companies skirt that by misclassifying workers as independent contractors. There are no real consequences in state law for misclassification. This is an issue we continue to try and address in the state legislature.

Houston has taken a bold step in passing this ordinance. Wage theft and employee misclassification affects us all and is something we need to take action to prevent and to punish when it occurs.