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WHAT NEW YORK EMPLOYERS NEED TO KNOW ABOUT THE WAGE THEFT PREVENTION ACT
Stricter Notice Requirements and Penalties are
Just Around the Corner
Effective April 12, 2011, the newly enacted Wage Theft Prevention Act ("WTPA") amends the existing New York Labor Law to, among other things:
- Impose heightened wage and hour notice and record-keeping requirements on employers
- Increase civil and criminal penalties for non-compliance
Employers should ensure that they are implementing necessary changes to their current business practices in order to comply with the law. If you have any questions regarding how this new legislation will affect your business or would like assistance in becoming compliant with the new mandates, please contact Diane E. Sugrue, Director of Compliance for Nukk-Freeman & Cerra, P.C. at 973-564-9100 or DSugrue@nfclegal.com.
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Key Changes Under The New York State
Wage Theft Prevention Act
New Notice Requirements
New Record-Keeping Requirements and Penalties for Non-Compliance
Enhanced Protections for Employees Against Retaliation
Expanded Penalties for Wage Violations
Amplified Police Powers
 New Notice Requirements
New York law currently requires employers to inform new hires, at the time of hire, of their regular rate of pay, regular pay day and, if applicable, their regular rate of overtime. Employers must also obtain a written, signed acknowledgement of that notice from the employee. The WTPA significantly broadens these requirements by expanding not only the type of information that must be conveyed, but the frequency with which it is given.
Annual Notice
Now, at the time of hire and on or before February 1st for each anniversary year of employment, the WTPA requires employers to provide each employee with:
- Regular pay day
- Rate(s) of pay and the basis thereof e.g. whether they are being paid by the hour, shift, day, week, salary, piece, commission or otherwise
- Allowances claimed as part of the minimum wage e.g. tip, meal or lodging credits
- Employer's name, including any relevant "doing business as" names
- Employer's mailing address and the address of the employer's main office or principal place of business and telephone number and
- A catchall category of any "such other information as the Commissioner of Labor deems material and necessary"
The notice must be given in English and any other language which the employee indicates as his or her primary language. The law also requires each employee to sign and date a written acknowledgement of receipt of the notice each time such notice is given. The acknowledgement must contain an affirmation that the employee accurately identified his or her primary language to the employer and that the notice was provided in the language identified. Likewise, the acknowledgement must be in English and in the employee's primary language. These records must be maintained and preserved by the employer for at least 6 years.
Notice By Pay Period
In addition to the yearly notice requirement, employers must also provide their employees with a detailed notice statement accompanying each payment of wages. The statement must include:
- All dates the employee worked during the relevant payment period
- Employee's name
- Employer's name
- Employer's address and phone number
- Rate/s of pay and their basis e.g. whether the employee is being paid by the hour, shift, day, week, salary, piece, commission or otherwise
- Gross wages
- Deductions
- Allowances claimed as part of the minimum wage e.g. tip, meal or lodging credits
- Net wages
- For non-exempt employees, the regular hourly rate/s of pay and rate of overtime and the number of regular and overtime hours worked
- For employees paid a piece rate, the applicable piece rate or rates of pay and the number of pieces completed
Failure to provide the mandatory annual notice within 10 days of hire may result in a fine of $50 for each week of non-compliance, while violations of the payroll notice will cost an employer $100 dollars for every pay period of non-compliance. While both fines are capped at $2,500, an employer is also exposed to costs and attorney fees.
New Record-Keeping Requirements and
Penalties for Non-Compliance
The WTPA mandates that each employer maintain detailed and contemporaneously kept weekly payroll records of each employee for at least 6 years. Failure to comply with these new record-keeping requirements will expose the employer to enhanced fines and criminal penalties. First offenders are now subject to a $500 to $5,000 fine or up to one year in prison. Second and subsequent offenders shall be subject to a $500 to $20,000 fine and/or up to one year plus one day in prison. Each day in violation constitutes a separate offense.
Enhanced Protections for Employees Against Retaliation
The WTPA expands an employee's protection against wrongful retaliation. The employee is now protected against retaliation that results not only from his or her actual complaint that the employer is not in compliance with the labor laws, but also from retaliation arising from an employer's belief that the employee has made, or is about to make, a complaint against the employer. Penalties may include reinstatement, lost compensation, front pay and liquidated damages up to $10,000. In a civil action, the court may award reinstatement, costs and attorney fees to the employee in addition to damages and liquidated damages. A violation of the retaliation provision is a class B misdemeanor.
Expanded Penalties for Wage Violations
Upon a finding of a wage violation under the New York Labor Law, the WTPA directs the Commissioner of Labor to seek the entire amount of the underpayment and liquidated damages. The amount of liquidated damages is increased from 25% to 100% of the full amount of underpayment and, in most instances, is deemed mandatory. Upon a finding of willful or egregious misconduct, damages may be doubled and accompanied by mandatory liquidated damages. If an employer fails to comply with an order to pay within 90 days, an automatic 15% may be added to the bill.
The WTPA calls for enhanced criminal penalties for employers who fail to pay less than the required minimum wages under the law. A first offense shall be deemed a misdemeanor and shall carry a penalty of $500 to $20,000 or up to one year in prison. A second or subsequent offense, occurring within 6 years of the previous conviction, shall be deemed a felony and shall carry a fine of $500 to $20,000 and up to one year plus one day in prison or both. Each week of non-compliance constitutes a separate offense.
Amplified Police Powers
The WTPA also increases the power of the Commissioner of Labor. For example, in accordance with the employer's obligation to keep its records transparent, the Commissioner of Labor is now expressly entitled to private and uninterrupted interviews with employees during any investigation. The Commissioner of Labor also has the authority to post an employer's violations in a visible area of the employer's workplace for up to one year. If the violation is found to be willful, the posting may be in an area visible to the general public for up to 90 days.
NFC Can Help You Become Compliant with These New Mandates
Under this new law, New York employers are clearly held to a standard higher than ever before through the imposition of significant responsibilities and exposure to stiff penalties for non-compliance. If you have any questions regarding how this new legislation will affect your business or would like assistance in becoming compliant with the new mandates, please contact Diane E. Sugrue, Director of Compliance for Nukk-Freeman & Cerra at 973-564-9100 DSugrue@nfclegal.com.
Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.
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