Governor Paterson Signs the New York Wage Theft Prevention Act

Currently, NY Labor Law 195(1) requires employers inform all new hires in writing of their rate of pay, payday, and overtime rate. The WTPA requires that additional information be included on the written notice, such as the basis of the wage payment (i.e., by the hour, day, shift, week, salary, or commission) as well as whether any allowances will be claimed as part of the minimum wage (e.g., for tips, meals, or lodging). The notice must also provide any “doing business as” names for the organization.

Employers must provide new employees with the written notice at the time of hiring, and each year employers must provide an additional written notice reiterating the employee’s pay rate and other mandated information (and obtain a signed and dated acknowledgement of receipt from the employee) by February 1. The notice must be provided in both English and the language identified by the employee as his/her primary language, and employers must keep this notice for six years. The WTPA also increases the length of time an employer must maintain payroll records from three to six years.

The WTPA requires employers notify employees at least seven days before any change in the information contained in the notice takes effect unless that change is reflected on the employee’s pay stubs. Pay stubs must now include the following information: dates of work covered by the payment, employer name, address and telephone number, employee name, hours worked, rates paid and basis of the rate (e.g., hour, shift, day, week), gross wages, credits or allowances claimed (e.g., tips, meals), deductions and net wages. The WTPA calls for the Department of Labor to develop dual-language templates to assist employers in complying with the new law’s requirements. We will notify clients and colleagues of the firm once these templates have been posted on the New York State Department of Labor (NYSDOL)’s website.

Finally, the WTPA increases the civil and criminal penalties for violating certain labor law violations:

1. If an employer fails to provide the pre-employment notice (including all the required information) within 10 days of the first day of employment, the employee may recover in a civil action $50 in damages for each workweek the violation occurs or continues to occur, not to exceed $2,500, as well as costs and reasonable attorneys’ fees. Employers who fail to provide the required notices/wage statements to current employees could similarly be subject to a civil action and liable for up to $100 per week, not to exceed $2,500.
2. Where an employer fails to pay an employee the proper amount of wages, the WTPA provides for liquidated damages in the amount of 100% of the wages owed unless the employer can show a “good faith basis” that the method of payment was lawful. This is an increase from the 25% liquidated damages currently allowed under New York Labor Law. The WTPA also provides for an additional assessment of damages for willful or egregious violations, as well as an additional 15% in liquidated damages if the employer defaults on paying a final judgment for more than 90 days.
3. The WTPA expands criminal liability for failure to pay proper wages is also to partnerships and limited liability companies, in addition to corporations and their officers and agents.

Employers should review their wage and hour practices to ensure compliance with the WTPA prior to April 12, 2011.