On December 13, 2010, New York Governor David A. Paterson signed the Wage Theft Prevention Act (“Act”). The New York Labor Law currently requires employers to notify employees in writing, at the time of hiring, of their rate of pay, pay date, and overtime rate (if applicable). The Act amends the law to significantly increase the penalties for wage payment violations, particularly for repeat offenders, and now requires employers to provide additional information regarding the payment of wages to employees. All New York employers must revise their pay practices by the Act’s effective date, April 12, 2011.

Increased Notice Requirements

  • Notice Obligation Now Continuous
    • Employer must issue new employees notices at the time of hiring describing their rate of pay, pay date, and overtime rate (if applicable).
    • Employer must issue all employees noticeswith the same type of information by February 1 of every subsequent year after hiring.
  • More Content Required in Notices
    • Notices must now include detailed wage statements specifying the applicable dates the wages cover, regular and overtime hours worked (if applicable), the rate(s) of pay (regular and overtime, if applicable), and other data, including:
      • The basis of the wage payment (e.g., whether the employee will be paid by the hour, shift, day, week, salary, piece, or commission, or on another basis)
      • The employer’s intent to claim allowances (e.g., tip or meal allowances) as part of the minimum wage
      • The employer’s main address and phone number
      • Additional information about the employer, including any d/b/a names
  • Timing of Notices
    • Employers must notify employees of any changes to the foregoing information seven days before the changes take effect, unless the employer reflects the changes in the information to be required with every wage payment.
  • Notices Must Be Signed
    • Notices must be signed and acknowledged by the employee each time they are received, in English or in the employee’s language.
  • Recordkeeping Requirement
    • Employers must now maintain payroll records for at least six years.  

Increased Penalties for Wage Payment Violations and Retaliation

  • Significantly Increased Damages
    • An employer’s failure to provide the notice within 10 business days of an employee’s hire date subjects the employer to an action for damages of $50 per work week, to a maximum of $2,500, plus costs, attorneys’ fees and injunctive relief.
    • Strong penalties are also imposed on employers who fail to provide employees with the wage information in each payroll statement, which includes damages of $100 per work week, to a maximum of $2,500, plus costs, attorneys’ fees and injunctive relief.
    • Increased penalties may be levied against employers for retaliation against an employee who complains about conduct the employee reasonably and in good faith believes is a violation of the wage payment laws. In addition to reinstatement, back pay, and front pay, retaliation victims can collect liquidated damages of up to $10,000.
    • While an employer can avoid these penalties if it made complete and timely payment of all wages to the employees in question, or if the employer reasonably believed in good faith it was not required to provide the notice, employees aware of violations, by allowing damages to grow each week, may have the incentive to not report notice violations until months after the fact.
    • Furthermore, the New York Commissioner of Labor can now seek attorneys’ fees and liquidated damages of 100 percent of the total unpaid wages due (up from 25 percent). Whereas the Commissioner of Labor previously had discretion to seek liquidated damages, s/he now must seek liquidated damages and must seek recovery of the full amount of underpayment.
    • Repeat offenders and employers whose violations are found to be “willful or egregious” are now subject to treble damages: double the wages due, plus liquidated damages of 100 percent.
  • Other Penalties
    • Violations of the New York wage payment law now may now result in the offending employer being required to post a notice of the violation in the workplace and, if the violation was willful, the notice must be posted in an area visible to the general public for up to 90 days.
    • New York’s Commissioner of Labor may now require an accounting of assets by the employer if it fails to comply with an order.
  • Criminal Fines and Imprisonment
    • Officers and agents of corporations, partnerships or LLCs who knowingly allow wage payment violations to occur may now be held criminally liable and are subject to fines of up to $20,000 and/or imprisonment of up to one year and one day.