HR-7701-117
Placed on the Union Calendar, Calendar No. 388.
Sponsored by Rosa DeLauro (D-CT)
What it does
This bill would require employers to give workers written notice of their pay terms at hiring and when terms change, provide regular pay stubs, and pay any outstanding wages within 14 days of an employee's termination. It would increase civil and criminal penalties for violations of minimum wage and overtime laws, allow unpaid wages to be recovered through civil lawsuits, and direct the Department of Labor's Wage and Hour Division to issue grants to nonprofits and educational institutions that work to reduce wage and hour violations.
Who benefits
Low-wage workers in industries with historically high rates of wage violations, such as food service, agriculture, domestic work, construction, and retail. Workers in hourly and tipped positions. Employees covered by collective bargaining agreements who are paid below the contracted rate. Workers who have been terminated and are owed final wages. Nonprofit organizations and educational institutions that would receive federal grants to conduct outreach and enforcement support. Workers who have faced retaliation for reporting wage violations.
Who is hurt
Employers — particularly small businesses — who would face new administrative costs to comply with disclosure, record-keeping, and pay stub requirements. Businesses in labor-intensive industries (e.g., restaurants, agriculture, construction, home care) that would face higher financial exposure under increased civil and criminal penalties. Employers who currently rely on flexible or informal pay arrangements that may not meet the new documentation standards. Taxpayers who would fund the grant program administered by the Wage and Hour Division.
Supporters argue
Supporters argue that wage theft — the failure to pay workers what they are legally owed — is widespread and costs workers billions of dollars each year, disproportionately harming low-income and minority workers who have the fewest resources to pursue legal remedies on their own. They contend that existing penalties under the Fair Labor Standards Act are too weak to deter violations, and that without stronger enforcement tools, bad-actor employers gain an unfair competitive advantage over law-abiding businesses. Supporters say that requiring clear written disclosures and timely final pay protects workers from confusion and delay, while civil enforcement rights give workers a practical path to recover what they are owed without depending solely on understaffed government agencies. They also argue that grants to community organizations extend the reach of enforcement into communities where workers are least likely to file formal complaints.
Opponents argue
Opponents argue that the bill imposes significant new compliance burdens — including mandatory disclosures, detailed record-keeping, and strict 14-day final-pay deadlines — that would be especially difficult for small businesses with limited administrative capacity. They contend that increased criminal referrals and higher civil penalties could expose employers to severe consequences for unintentional payroll errors or good-faith disputes over hours worked, rather than deliberate wrongdoing. Opponents also argue that existing federal and state wage enforcement mechanisms, including the Department of Labor's Wage and Hour Division, already provide adequate remedies, and that expanding civil litigation rights could lead to a surge in costly lawsuits that harm businesses without proportionate benefit to workers. They further contend that federal grant funding for advocacy-oriented nonprofits raises questions about whether taxpayer dollars would be used for activities that go beyond neutral education into policy advocacy.
Constitutional context
The bill rests primarily on Congress's Commerce Clause authority (Art. I, §8, cl. 3) to regulate employment relationships in interstate commerce, the same foundation as the Fair Labor Standards Act upheld broadly under Wickard v. Filburn (1942). The expanded criminal penalty and DOJ referral provisions implicate the Necessary and Proper Clause (Art. I, §8, cl. 18). Post-Loper Bright v. Raimondo (2024), courts would independently review any agency rules the Wage and Hour Division issues to implement the grant program or disclosure requirements, rather than deferring to the agency's interpretation. Under West Virginia v. EPA (2022), if the Wage and Hour Division were to issue rules of major economic significance beyond what the bill's text clearly authorizes, those rules could face major-questions challenges. The Tenth Amendment may be implicated to the extent the bill's requirements interact with or preempt state wage laws, though federal minimum labor standards have historically survived anti-commandeering challenges.
Checks and balances
The bill would expand executive branch authority by directing the Department of Labor's Wage and Hour Division to administer a new grant program and pursue criminal referrals to the Department of Justice, giving the executive branch broader enforcement discretion over wage violations. The judiciary would gain a larger role through expanded civil enforcement rights, allowing private parties to bring wage recovery lawsuits independent of agency action. Congress would retain authority through the statutory penalty caps and grant eligibility criteria it sets in the bill's text. Post-Loper Bright, courts — not the agency — would have final say on how ambiguous provisions of the bill are interpreted.
Historical precedent
The Fair Labor Standards Act of 1938 (FLSA) established federal minimum wage, overtime, and record-keeping requirements and is the primary predecessor. The Wage Theft Prevention Act of 2011 in New York State served as a state-level model for written disclosure and pay stub requirements. The Employee Free Choice Act (proposed, not enacted) similarly sought to strengthen enforcement of labor agreements including wage provisions.