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dECEMBER 21‚ 2010
Recent Amendments to the New York Labor Law
Enhance Employer Wage Notice Requirements and Impose Steeper Penalties for
Failure to Pay Wages
By Michael S. Arnold
Last week, with his term nearing a close, Governor Patterson
signed the New York Wage Theft Prevention Act into law. This law, which
becomes effective on April 9, 2011, amends the New York Labor Law by
increasing its employee notification and recordkeeping requirements and by
strengthening sanctions against employers who fail to pay their employees
properly. This alert summarizes the key amendments.
Enhanced Notice
and Recordkeeping Requirements
Before the amendments, Section 195 of the Labor Law required
employers to provide each new employee with a written notice of his or her
rate of pay, regular pay day, and, if overtime-eligible, the regular hourly
rate of pay and overtime rate of pay. As a result of the amendments,
Section 195 now requires employers to provide written notices not only to
employees upon hire, but also to all existing employees no later than
February 1, 2012 and each subsequent year thereafter. Each notice must be
written in English and in the language identified by the employee as his or
her primary language. In addition, each notice now must list substantially
more information, including:
1. rate
of pay; and, to the extent overtime-eligible, the hourly rate of pay and
overtime rate of pay;
2. the
basis for the rate of pay (whether the employer pays the employee by the
hour, shift, day, or week, or by salary, piece, commission, or another
method);
3. the
existence of any allowances claimed as part of the minimum wage, including
tip, meal, or lodging allowances;
4. the
regular pay day;
5. the
employer’s name and any “doing business as” names the employer uses;
6. the
physical address of the employer’s main office or principal place of
business, and a mailing address if different from the physical address; and
7. the
employer’s telephone number.
Any time the employer changes this information, the
amendments require the employer to notify the employee at least seven
calendar days before the change or notify the employee on his or her next
earnings statement.
The Labor Law still requires employers to obtain a written
acknowledgement of receipt of these notices for new hires, and employers
must now also obtain acknowledgements from existing employees each time
after they issue a new notice. Each acknowledgment must also be in English
and in the primary language of the employee, contain certain language as
specified in Section 195(1)(a), and be maintained for six years.
In addition to the enhanced wage notice requirements, the
amendments now require employers to provide additional information on
employee earnings statements. Before the amendments, employers were
required simply to list gross wages, deductions, and net wages on each
earnings statement. Now, each earnings statement must include the dates of
work covered by the pay period; the employee’s name; the employer’s name,
address, and phone number; the rate or rates of pay and basis thereof,
whether paid by the hour, shift, day, week, salary, piece, commission, or
other method; gross wages; deductions; allowances, if any, claimed as part
of the minimum wage; and net wages. Further, to the extent the employee is
overtime-eligible, each earnings statement must also list the hourly rate
of pay and the overtime rate of pay, the number of regular hours worked, and
the number of overtime hours worked, and to the extent the employer pays
the employee on a piece rate, the earnings statement must include the
applicable piece rate or rates of pay and number of pieces completed at
each piece rate. Finally, employers are now required to maintain these
payroll records for a period of six years rather than the three years
required previously.
Increased
Penalties
Perhaps the biggest change in the Labor Law is a provision
allowing employees to recover liquidated damage awards equal to 100% of
unpaid wage amounts—a significant increase from the maximum of 25%
previously permitted. In addition, employees now have the right to sue the
employer for failing to comply with notice and recordkeeping requirements.
While the maximum recovery in these civil actions is only $2,500,
attorneys’ fees and costs are available, and the judgment amount will
increase by 15% if the employer does not pay it within 90 days after the
judgment or 90 days after expiration of the time to appeal and no appeal is
pending, whichever is later.
The Labor Law was also amended to provide for new civil
penalties for failure to comply with notice and recordkeeping requirements,
and to extend potential liability not only to officers and agents of a
corporation, but also to officers and agents of a partnership or limited
liability company as well. The Labor Commission is also empowered to post
notices of Labor Law violations at the offender’s worksite, or, for willful
offenders, before the general public.
Retaliation
Lastly, the amendments extend the Labor Law’s
anti-retaliation provision to reach any person who retaliates
against another employee complaining about a Labor Law violation. It
subjects that person to a liquidated damages penalty of up to $10,000 and
carries a class B misdemeanor criminal penalty.
* * *
Action
Steps
Employers should seek the advice of employment counsel for
assistance with the Wage Theft Prevention Act. Employers should also:
·
Review existing document retention policies and procedures to ensure
compliance with the Act’s six-year document retention requirements;
·
Revise existing Section 195 new hire wage notices and create new
Section 195 existing employee wage notices to comply with the new
information requirements;
·
Review policies and procedures designed to properly notify employees
of changes to information identified in Section 195;
·
Review existing payroll practices to ensure that earnings statements
identify all information outlined in Section 195; and
·
Train employees to refrain from retaliating against any individual
complaining of a Labor Law violation.
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