On June 19, 2014 both the New York State Senate and Assembly passed a bill that would significantly amend the New York Wage Theft Prevention Act (the “Act”) and impose new wage and hour requirements for employers. Most notably, the bill would eliminate the requirement that employers annually distribute wage notices to their employees. The bill also increases the penalties for violations of the Act.

The Act, which became law in 2010, requires employers to provide wage-related information to employees, including the employee’s rate of pay, the basis for the employee’s rate of pay, the employee’s regular pay day, and certain information about the employer. The Act further requires employers to provide notices with this information to employees at the time of hire, annually between January 1 and February 1, and whenever there are changes in the information on the notice. The Act also requires employers to provide employees with wage and pay rate information with each wage payment.

The pending bill would modify the Act in several key ways, including:

  • Eliminating the annual notice distribution requirement to employees, although it would continue to require dissemination of the notice to all new employees at the time of hire;
  • Increasing the penalties for employers who fail to provide the notice to new employees from $50 per work week to $50 per work day, up to a maximum of $5,000;
  • Increasing the amount of damages that employees may recover in a civil action for violations of the Act;
  • Increasing the penalties for employers who fail to provide pay-rate information with each wage payment from $100 per work week to $250 per work day, up to a maximum of $5,000;
  • Requiring employers who commit repeat or willful labor law violations to report certain wage and hour data to the New York State Department of Labor (“NYDOL”), which will be posted on the NYDOL’s website;
  • Imposing successor liability on employers who own and operate a predecessor entity that committed a prior labor law violation;
  • Levying penalties of up to $20,000 on repeat offenders of the Act;
  • Requiring the NYDOL to assign to the employee a portion of the money due for violations of the Act if requested by the employee;
  • Requiring a contractor or subcontractor to notify all of its employees of labor law violations;
  • Imposing joint and several liability on the ten members of a limited liability company (“LLC”) with the largest percentage of ownership interest for any wage and hour violations involving employees of the LLC; and
  • Clarifying that an investigation by the NYDOL into potential violations of the Act would cover a six-year period.

The bill is now before Governor Cuomo, who is expected to sign it. The bill will become effective 60 days after signed into law.