Effective April 12, 2011, the recently enacted New York State Wage Theft Prevention Act (“WTPA”) (S8380) will require employers to comply with additional notice and record keeping obligations and will substantially expand the penalties that can be imposed for failing to properly pay employees.

New Notice and Record Keeping Requirements

New York Labor Law Section 195 currently requires employers to advise all new hires in writing of their rate of pay, regular pay day and overtime rate (if applicable), and to obtain a written acknowledgement of receipt of the notice from the employees (“Notice”). For more information, please see our previous advisories on Section 195 requirements and paperwork.

The WTPA will require employers to expand the Notice to include the following additional information:  (a) the basis of the wage payment (i.e., by the hour, shift, day, week, piece, commission, etc.), (b) the employer's intent to claim any allowances (such as tip or meal allowances) as part of the minimum wage, and (c) general information about the employer, including any “doing business as” names, the address of the employer’s main office or principal place of business, the employer’s mailing address (if different) and the employer’s telephone number.

Additionally, the WTPA will require employers to:

  • Provide the Notice upon hire and by February 1 of each year thereafter.
  • Provide the Notice to the employee both in English and in the language the employee identifies as his or her primary language.
  • Have the employee sign an acknowledgement of receipt both in English and the language the employee identifies as his or her primary language.
  • Include, in the acknowledgement form, a statement whereby the employee affirms that he or she accurately identified his or her primary language and that the Notice was provided in that language.
  • Inform employees of any change in the Notice at least seven days before it takes effect, unless the change is reflected on the employees' pay stubs.
  • Maintain the Notices, the signed acknowledgements and other payroll records for six years.
  • Furnish, with each payment of wages to employees who are eligible for overtime pay, a statement that includes the dates of work covered by that payment, the employer’s name, address and telephone number, the allowances, if any, claimed as part of the minimum wage, the regular and overtime pay rates, and the number of regular and overtime hours worked.

The WTPA will require the Commissioner of Labor to develop templates that employers can use to satisfy the foregoing obligations.

Civil and Criminal Penalties

The WTPA will increase the penalties for failing to comply with the foregoing notice obligations and for other violations of New York’s wage and hour laws:

  • If an employer fails to provide a compliant Notice within ten days of the first day of employment, the employee will have a private right of action in which the employee can recover $50 for each workweek the violation occurs (not to exceed $2,500), plus costs and reasonable attorneys’ fees. Moreover, if the Commissioner of Labor brings an action on behalf of the employees, the Commissioner can recover an additional $100 for each week the violation occurred.
  • If an employer fails to pay the proper amount of wages then (a) the liquidated damages the employee can recover if the employer fails to prove a good faith basis to believe that the underpayment was in compliance with the law will increase from 25% to 100% of the amount due, (b) the employee will be entitled to recover prejudgment interest and (c) if the employer fails to pay any final judgment within 90 days, the award will automatically increase by 15%.

In addition to these civil penalties, the WTPA will enhance the criminal penalties by extending criminal liability to partnerships and limited liability companies and their officers and agents who knowingly permit the non-payment of wages.

Anti-Retaliation Provisions

The WTPA will penalize those who retaliate against employees for asserting their rights with respect to wages by:

  • Authorizing claims against “persons” (in addition to employers and their agents and officers) who retaliate against the employee because the employee, reasonably and in good faith, engaged in protected conduct.
  • Providing for liquidated damages not to exceed $10,000 (in addition to compensatory damages).
  • Authorizing injunctive relief, such as ordering the employer to reinstate the employee to the same or an equivalent position or ordering the employer to pay front pay in lieu of reinstatement.
  • Tolling of the two-year statute of limitations for a court action if the employee files a complaint with the Commissioner of Labor.

Enhanced Governmental Authority

The WTPA will make it easier for the Commissioner of Labor to collect damages from employers that violate wage and hour laws. Specifically, under the WTPA, the Commissioner can require an employer that defaults on an administrative order compelling it to pay wages to provide an accounting of all of its assets, to post a bond, and to pay a civil penalty of up to $10,000. 

Conclusion

The WTPA will provide employers with a strong incentive to ensure they timely deliver accurate Notices to their employees, collect the signed acknowledgement forms, properly classify their employees and pay all wages due in a timely fashion.