New York’s Wage Theft Prevention Act (the “Act”) takes effect on April 12, 2011. Many new obligations are imposed upon employers, and the penalties for noncompliance are considerable.

Additional Required Information for Inclusion in Notice to Employees

The existing requirement that all newly hired employees be provided with written information (Notice) of their pay date, pay rate and overtime rate of pay, if any, and job status (e.g., exempt/non-exempt) has been modified to add the basis of pay rates (e.g., hourly, weekly, shift, commission, salary, piece, other, etc.) as well as any allowance claimed by employers against the minimum wage (e.g., meals, tips, etc.).

The Notice must also set forth identifying information about the employer, including official name, d/b/a names, if any, the address of the headquarters or principal place of business, and the mailing address and telephone number. Changes to any of the information contained in the Notice must be updated no fewer than seven days in advance of any changes, unless such changes are reflected on the employee’s wage statement (part of an additional new requirement discussed below).

The Act now requires the Notice be distributed not only to all newly hired employees but, again, to all employees on or before February 1 in each following year of employment. Also, the employer is required to obtain from each employee a signed and dated written acknowledgment of receipt of the Notice, in both English as well as in that employee’s primary language. The Notice must be provided in English and the employee’s primary language, as identified by the employee.

Required Information for Inclusion in Wage Payment Statement to Employees

All wage payments must be accompanied by identifying and explanatory information (Statement) indicating the dates of work covered by the payment; the name of the employee; the name, address and telephone number of the employer; the rate of pay; the basis for the rate of pay; allowances claimed by the employer against the minimum wage; the regular rate; the overtime rate, if applicable; and the number of regular and overtime hours. This information is in addition to what is already required to be included in every wage payment to employees under the Labor Law’s Section 195 (i.e., gross wages, deductions and net wages, and, upon the specific request by an employee, an explanation of how such wages were computed).

Additional and Longer Recordkeeping Requirements for Notice and Payroll Records

Employers will now be required to maintain and preserve the acknowledgements of employees’ receipt of the Notice for six years. Also, the Act requires employers to preserve and maintain true and accurate payroll records for six years, double the current three-year requirement.

Increased Civil Penalties for Employers Failing to Comply with the Labor Law

Significantly increased monetary penalties are provided for noncompliant employers. Among them:

  • For failing to provide the Notice within 10 business days of the date of a newly hired employee’s commencement of employment, employers will be subject to the possibility of a civil action by an employee for damages in the amount of $50 for each week in which such violation occurred or continues to occur, up to a maximum of $2,500, plus costs and reasonable attorneys’ fees.
  • For failing to provide the information required on the Statement, employers will face potential damages in the amount of $100 for every week of the violation, up to a maximum of $2,500, plus costs and attorneys’ fees.
  • Alternatively, the Commissioner of Labor (the Commissioner) is authorized to bring an action against the employer on behalf of employees for either of the above-detailed employer failings.
  • For violation of the Labor Law, including failing to properly pay an employee the correct amount of earned wages, the liquidated damages that the Commissioner is authorized to impose has been increased from 25 percent to 100 percent of the amount of delinquent wages owed to an employee. Further, whereas liquidated damages were previously discretionary, the Act now appears to mandate that the Commissioner seek liquidated damages and recover the full amount of the wages owed to an employee. Lastly, an additional 15 percent of liquidated damages will be charged to any employer that has failed to comply with a final judgment within 90 days.

Increased Exposure to Criminal Penalties

The Labor Law now includes both partnerships and limited liability companies among those types of employers that would face potential criminal prosecution for failing to properly pay employee wages. Prior to the amendments, only corporations and the officers and agents of any corporation were subject to criminal penalties. In addition, substantial penalties, including both significant fines and imprisonment, are available under the Act against those employers who violate minimum wage and overtime requirements, including the failure to maintain related business records.

Enhanced Remedies and Relaxed Procedures for Employee Retaliation Complaints

Those employers who retaliate against employees and who have made good faith complaints concerning violations of the Labor Law or any order issued by the Commissioner will now be liable not only for compensatory damages but will also be subject to injunctive relief (e.g., prohibition of the unlawful conduct, rehiring, reinstatement of employee, etc.) and liquidated damages up to $10,000.

Also, with respect to retaliation by an employer and the six-year statute of limitations for an employee to commence a court action against the employer, the Act now tolls the deadline from the earlier of either an employee’s filing a complaint with the Commissioner or the Commissioner’s initiation of an investigation, until the later of either date on which the Commissioner either informs the employee that the investigation has concluded or the date on which the Commissioner’s Order demanding compliance by the employer becomes final. Also, the Act makes clear that any investigation by the Commissioner shall not be a prerequisite to or a bar against a person bringing a civil action for retaliation.