Congress strengthens wage-theft penalties to 5 years prison, funds enforcement

What it does

This bill adds a new federal right to full compensation under the Fair Labor Standards Act, requiring employers to pay employees at least the greater of their contractual wage or the applicable federal/state minimum wage. It increases criminal penalties for wage theft to up to 5 years imprisonment for violations over $1,000 and up to 1 year for violations of $1,000 or less, and strengthens civil penalties. Criminal fines collected are directed to the Department of Labor's Wage and Hour Division to fund enforcement.

Why we flagged it

The bill's core mechanism is establishing a statutory right to full compensation and dramatically increasing penalties for wage theft. This is straightforward labor-protection legislation with no hidden riders or narrow beneficiaries.

What the text implies

• The new section 8 right applies only to employees 'engaged in commerce' — a jurisdictional limit tied to the FLSA's existing commerce clause. Workers in purely intrastate, non-commercial employment may fall outside the new protection, though they may still be covered under state wage laws.
• Criminal penalties hinge on 'willful' violation — a scienter requirement that may limit prosecution of negligent or reckless wage theft, requiring DOL to prove intent rather than mere violation.
• The bill repeals section 10 of the FLSA (a conforming amendment) without restating its content; the civic effect depends on what section 10 currently says. If section 10 contained a safe harbor or exemption, its repeal may expand liability.
• Fines collected under the new criminal penalties are earmarked for DOL enforcement, creating a revenue stream that incentivizes prosecution but also ties enforcement capacity to conviction rates rather than appropriations.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Workers gain an explicit federal statutory right to full compensation and employers face significantly increased criminal and civil penalties for wage theft, creating stronger deterrence and enforcement. The redirection of fines to DOL enforcement amplifies the agency's capacity to pursue violations, benefiting workers broadly.

Named in the bill

Department of Labor, Wage and Hour Division, Fair Labor Standards Act of 1938, Secretary of Labor

Where it stands

• Sep 14, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• Sep 14, 2026 — Referred to Senate Committee on Health, Education, Labor, and Pensions · Congress.gov: “Read twice and referred to the Committee on Health, Education, Labor, and Pensions”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.