County Wage Theft Ordinance Defeated

By Bill Dries

After weeks of discussion, talks between Shelby County Commissioner Steve Mulroy and leaders of the city’s hospitality industry broke down on Mulroy’s “wage theft” ordinance.


And the measure failed on a 5-7 vote Monday, Jan. 14, with very little debate among Shelby County Commissioners but a just about even split among 23 citizens who spoke on the issue before the commission voted.

Mulroy, who sponsored the measure, had the vote of every Democratic commissioner except Melvin Burgess, who was absent, and James Harvey, who “inexplicably changed position” from his earlier votes in favor of the measure, Mulroy said.

“There’s also a reflexive opposition to anything that remotely resembled regulation, regardless of how innocuous, on the part of my Republican colleagues,” Mulroy said. “They can’t change their nature, so I don’t really blame them.”

Harvey acknowledged the switch.

“It takes the power away from business and hands it over to the labor market,” Harvey said. “There’s a way to make a compromise so that both parties can’t take advantage. If we pass this ordinance, every employee that files constitutes an expense on that business and it’s just really not fair.”

Harvey agreed with Mulroy that the ordinance was largely an attempt to address complaints in the hospitality industry.

“I think most of the infractions are incurred in the hotel and hospitality industry,” Harvey said. “This ordinance, it would affect all other industries. I don’t think it is fair.”

Even with all seven Democratic votes, Mulroy needed two Republican votes to get the nine-vote majority required for passage.

Mulroy couldn’t even muster seven votes to delay the final vote until Burgess was in attendance.

Most of the business leaders who spoke against the ordinance were from the hospitality industry.

“Make no mistake, this is another layer of government,” said Mike Miller, past president of the Memphis Restaurant Association. Miller said he and other association leaders offered compromises that included posted notices about how to file wage theft complaints with state and federal labor investigators.

“It takes the power away from business and hands it over to the labor market.”

–James Harvey
Shelby County Commissioner

Mulroy said he has talked with investigators at both levels and they pursue different kind of wage theft complaints for higher amounts than what he believes the typical complaint would be for.

“There are no new record-keeping requirements in this ordinance,” Mulroy said. “There are no new requirements at all about how employers should treat employees. It relies on existing law.”

Mulroy said he worked with small-business owners in the hospitality industry with amendments that would have deleted any fines or court costs and specified that the burden of proof was on the worker making the complaint.

He said all of those compromises were rejected. They were also voted down Monday.

Business leaders said the local mechanism for complaints by employees about employers who didn’t pay them for work or deducted “fees” that aren’t permitted would create new bureaucracy for small-business owners to deal with.

Just before Monday’s commission meeting, the Greater Memphis Chamber came out against the proposal.

“If passed, the wage theft ordinance will require valuable time and financial resources to even refute meritless claims,” the statement reads. “Additionally, we believe that in the competitive marketplace of recruiting new companies to our area, this type of legislation can give the misimpression that we are over-regulating business and industry.”

Mulroy indicated he will try again.

“I don’t think you’ve heard the last of this issue,” he said. “I think there are a lot of employees out there, especially in the service industry – low-wage employees – who realize this is not a trivial issue. They will be demanding that we act and I think you will probably see it again.”

A similar ordinance that would apply to the city of Memphis is being considered by the Memphis City Council and is tentatively set for a final vote at the first council meeting in February.