Effective February 27, 2015, a number of noteworthy amendments to New York’s Wage Theft Prevention Act (WTPA) go into effect.  By way of background, the WTPA is designed to prevent employers from failing to pay workers’ wages by (1) requiring written statements setting forth employees’ pay rates and pay dates and (2) providing a civil cause of action against employers that fail to properly disclose or pay wages.

Most notably, the amendments eliminate the WTPA's annual wage notice requirement.  They also significantly increase penalties for wage payment violations, expand successor and personal liability for wage payment violations and establish a wage theft prevention enforcement account.  Each of these (and other amendments) are further summarized below.

Significant WTPA amendments

  • Elimination of the annual wage notice requirement.  The New York State Department of Labor (NYSDOL) has stated that it will not enforce the annual wage notice requirement for 2015 and beyond.  Most employers are therefore no longer required to provide their employees with annual wage rate notices on or before February 1 of each year.[1]  However, employers are still required to provide their new employees with the notice within ten  business days of their hire date.
  • Increased penalties for WPTA violations. The amendments  increase the penalty from $50 per week to $50 per day for a violation, and available damages for each failure are increased from a maximum of $2,500 per employee to a maximum of $5,000 per employee.  Further, if the NYSDOL obtains a judgment against an employer, a portion must be paid to the employee(s) at issue; prior to the amendments, such payments were made at the NYSDOL’s discretion.
  • Personal liability for LLC members.  The amendments provide that the 10 members with the largest percentage of ownership in a limited liability company (LLC) are now jointly and severally liable for all debts, wages or salaries due and owing to the LLC’s employees for their services to the LLC.  Employees may also recover liquidated damages, penalties, interest, and attorneys’ fees or costs incurred in successfully pursuing such claims.
  • Successor liability.  The amendments also prevent employers from avoiding their liabilities by forming alter ego companies. Thus, an employer with ownership, employees, products, and customers similar to those of a prior employer may remain liable for its predecessor’s violations of New York labor law (NYLL).
  • Establishment of enforcement account. To help fund the increased regulatory and investigatory burden, a Wage Theft Prevention Enforcement Account has been created.  The account, which will be in the custody of the state comptroller, will be funded by monies collected from employers who violate the WTPA and will be used to offset the costs incurred by the administration and enforcement of the WTPA.
  • Repeat offenders and/or willful or egregious violations. Employers that repeatedly violate the NYLL, or whose violations are found to be willful or egregious by the NYSDOL, will be required to report wage and employee information, which will be posted on the NYSDOL website.  Repeat offenders within the prior six years can also be subjected to enhanced penalties not to exceed $20,000. 

Action steps for New York employers

  • Cease providing annual WTPA notices to current employees, but continue providing WTPA notices to new employees within 10 days of hire.
  • Review wage payment practices to ensure continued compliance with the WTPA.
  • Note that the WTPA's document retention requirements remain unchanged. All previously obtained acknowledgements and notices as well as signed certifications from newly-hired employees must still be kept on file for 6 years.