HB 1126: It Says Everything That Is Wrong With This General Assembly

The short session of the Indiana General Assembly is turning into a real train wreck for the people of this state. On so many levels there is legislation being considered and moving through the process that is bad for one segment of the population or another, often based on the worst of motives. Unfortunately, many of these other issues are getting crowded out and slipping through the process with very little public input because of the totally unnecessary and mean-spirited debate over whether a law should be placed in the Indiana Constitution that is already written into state statute to expressly discriminate against persons who desire to enter into same-sex marriages or unions.

One such proposed law is HB 1126, authored by State Rep. David Ober (R-Albion), which seeks to gut Indiana's Unpaid Wage Payment Law, virtually the only pro-employee law remaining on the books in the state of Indiana. This is a very straight forward law that's been on the books for at least 80 years and has somehow managed to survive attack from a very conservative leaning state legislature regardless of which political party has been in control. The Unpaid Wage Payment Law provides a civil remedy for employees when an employer refuses to pay wages the employee has earned. This remedy permits an employee deprived of payment of wages due him the right to sue the employer for the amount of unpaid wages. If the employee proves the employer owes unpaid wages, the employee is entitled to recover as damages a penalty of 10% of the amount of unpaid wages for each day the wages remain unpaid up to a maximum of double the amount owed to the employee, plus the reasonable attorney's fees the employee incurred in pursuing the civil remedy.

For example, you walk into work today and your employer tells you that this is your last day of work and gives you your last paycheck, or even worse, refuses to pay you your last paycheck. You ask about the $2,000 you are owed for two weeks of paid time off you have accrued under the company's employment policy or your last week's wages and he tells you to go to hell. The Wage Payment Law allows you to sue the employer and recover not only the $2,000 but also up to $4,000 in damages, plus your attorney's fees.

HB 1126 guts the civil remedies provided under the Unpaid Wage Payment Law by providing that the employee can only recover damages and his attorney's fees if he proves the employer acted in bad faith and the total amount of his damages, including attorney's fees, does not exceed double the amount owed to the employee in unpaid wages.

So at yesterday's hearing in the Senate on HB 1126, Rep. Ober tells the committee that his legislation is needed "to protect employees from predatory attorneys who advertise on bus benches." Well, speaking as an attorney who doesn't advertise on bus benches but who has represented a number of employees who have been beaten out of wages due to them by their former employers, I can assure you that nothing about what I do on behalf of my clients is predatory.

The example I gave above is very similar to what happened to an employee right here in Indianapolis who tried for months unsuccessfully on his own to convince his former employer for whom he worked, a very well-known staffing company that operates nationally, who remained unemployed for many months, to recover two weeks of pay owed to him. When I filed a lawsuit against his former employer, the company's corporate lawyer called me up, explained that there had been a mix-up in their employment records and agreed to settle the claim through one phone call by paying the unpaid wages, double that amount as damages, plus $500 for attorney's fees, to avoid incurring additional attorney's fees by unnecessarily litigating a claim both he, my client and I all knew that the company was legally obliged to pay him, more than a year after he had left his job.

The refusal of employers to pay wages due to employees happens far more frequently than you might suspect. Because the employee is often unemployed at the time he or she seeks legal assistance, they don't have money to spare to pay an attorney to help recover unpaid wages they are owed. Presumably, lawmakers many years ago recognized this predicament and enacted the Unpaid Wage Payment Law to encourage attorneys to take on these cases with legal certainty that attorney's fees his client can't afford to pay can be recovered from the employer if the attorney can prove the employer failed to pay wages legally owed to the employee. HB 1126 removes that certainty and leaves it to the discretion of a judge to award damages and attorney's fees, only if the judge is convinced the employer acted in bad faith, and lops attorney's fees in with the maximum damage award the employee can recover. In many cases, the attorney's fees alone will often exceed double the amount of unpaid wages owed to the employee. The practical impact of this legislation actually is to incentivize employers not to pay employees wages owed to them, gambling on the unlikelihood that the employee will find an attorney to take on the case, knowing that the employee won't recover any damages after paying attorney's fees even if the employee does sue to recover the unpaid wages.

That's just the first part of the bill. A second part of the bill allows an employer to require an employee to agree to an assignment of wages as a condition of employment up to $2,500 per year to recover for the cost of uniforms, reimbursement for education or employment skills training and advances for payroll or vacation pay. Guess what? Unscrupulous employers will always find a way of claiming that the unpaid wages the employee claims he or she is owed is not owed to the employee because of the wage assignment the employer compelled the employee to sign as a condition of his employment.

Let me explain to you how a particular staffing company operates right here in Indianapolis. The staffing company pretty much only hires foreign workers under the H-1B visa program for highly-skilled workers that is supposed to pay good wages to fill jobs for which there are supposedly a shortage of available American workers. This staffing company requires these foreign workers to sign a promissory note agreeing to pay the employer $20,000 if the employee does not remain employed for a minimum of two years for the training, education and administrative expenses it claims it incurs to employ the worker as an H-1B employee. In order to get the H-1B visa approved, this staffing company attests under penalties of perjury that the employee will be employed in a full-time, 40-hour a week job earning the prevailing wage rate set by the government.

Guess what? The employees often arrive in the U.S. only to learn that the job promised to them doesn't actually exist. They are often benched without pay for weeks and months, or forced to work jobs that pay them less than a 40-hour work week. Those are all violations of the federal H-1B rules for which there are penalties, but the U.S. Department of Labor, particularly under the Obama administration, allows complaints filed by foreign workers against their employers to languish for years without taking any action. Many of these employees grow frustrated and quit. The staffing company sues them in Marion County, at least 80 lawsuits by my last count, seeking to recover $20,000 for breach of employment contract. Many of them are residing in other states scattered throughout the country so the forum for hearing their case is not convenient for them but determined by their contract. In cases where I've represented these employees, I rely on Indiana's Unpaid Wage Payment Law to pursue counter-claims for unpaid wages. Thanks to this law, my clients didn't have to pay a dime to this unscrupulous employer. As I read this proposed legislation, HB 1126 is written to aid and abet this unscrupulous staffing company in flooding the U.S. market with foreign workers it treats as indentured servants.

It is shocking and disturbing that we have lawmakers that are so hostile to the rights of workers in this state to even contemplate the passage of a law intended to incentivize employers in this state not to pay wages rightfully owed to their employees. One of the members of the Senate Labor Committee who will decide on the fate of HB 1126 is State Sen. Brent Waltz (R-Greenwood). Waltz founded a company several years ago, Indianapolis Diversified Machining, which operated out of the former United Airlines maintenance hub at the Indianapolis International Airport. When the company closed down and the 50 or so employees who worked for the company filed for unemployment benefits, they learned from the Department of Workforce Development that they were not allowed to collect unemployment benefits because their employer never paid unemployment taxes as it was required by law to pay for its employees. Sen. Waltz gave this reaction to WRTV's Raphael Sanchez to the plight of his company's former employees as he explained he wasn't responsible for running the day-to-day operations of his business: "I am absolutely appalled that the company did not pay these employees," Waltz said. "I am doing everything I can to make sure people get paid the money they deserve." I'm sure he had a good laugh over drinks at the Columbia Club later on with his pompous friends over the plight faced by his former employees. This is one of the many reasons I have absolutely no confidence in the people we've elected to the state legislature to do the right thing. HB 1126 flew through the House on a 91-3 vote. Why would I expect the Senate's members to be any wiser, let alone give a damn how much harm they are inflicting on the hard working men and women of this state?

I'm sick and tired of hearing our political leaders preach about all they are doing to make Indiana a favorable place to conduct business and how we must do better at attracting highly-skilled, younger professional workers. I would discourage any highly-skilled worker from taking a job in Indiana when there are so many other states where they can find a job where the state's labor laws treat them with some sense of decency and fairness. We live in a state where laws are written by lobbyists for selfish business owners who could care less about the well-being of their employees. Don't believe a bit of the bullshit you hear from our state's Indiana Economic Development Corporation. Take a look at any construction job site in Indianapolis funded with tax dollars. How in the hell can a work site be populated with undocumented workers from Mexico earning low wages when the state's law mandates the payment of prevailing wage rates? Because construction companies padding the wallets of the politicians lie on the forms they file about the wages they pay their employees and everybody within the government responsible for enforcing the law looks the other way. And the big labor bosses who are supposed to be looking out for the workers but are actually in bed with the business owners pretend it's not happening as they thrive on their high-paid salaries and spend half the year vacationing at their second homes in Florida. This is a hostile state for workers. Period. Don't let anyone tell you otherwise.