Governor Cuomo Set to Sign Law Repealing the New York Wage Theft Prevention Act’s Annual Pay Notice Requirement; Law Also Extends Wage Payment Liability to Ten Largest Members of New York LLCs
Written by Michael Arnold
New York is set to end its requirement under the Wage Theft Prevention Act that employers annually distribute notices to employees detailing certain wage payment information. In just the short time it was in effect, this requirement proved an administrative headache for most employers. While the repeal will be welcomed by employers, they should also take note of the law’s other important changes.
Here are the major provisions of this new law, which will go into effect 60 days after Governor Cuomo signs it:
- As previously mentioned, it repeals Labor Law §195’s annual pay notice requirement. But note that it leaves intact the remaining new hire pay notice and earnings statement requirements.
- Increases the potential damage award for failing to provide the new hire pay notice from $50 per week up to a $2,500 maximum to $50 per day up to a $5,000 maximum, and for failing to provide earnings statements from $100 per week up to a $2,500 maximum to $200 per day up to a $5,000 maximum.
- Makes it difficult for an employer to change its ownership structure to avoid wage violation liability by treating the new entity as the old one where they are engaged in substantially the same work and working conditions, under substantially the same supervisors or if they have substantially the same production process, produce substantially the same products and have substantially the same body of customers.
- Clarifies that a Department of Labor investigation will extend across the entire six-year statute of limitations unless the Department otherwise notifies all affected employees.
- Increases the civil penalties the Department of Labor may assess against an employer.
- Contractors and sub-contractors must notify their employees of any findings of a wage violation by the Department of Labor or a court, by attaching a summary of the findings to employee paychecks in a format set forth by the Department or court.
- Amends the NY LLC law to hold the ten members with the largest % of ownership of a NY LLC jointly and severally liable for failures to pay certain types of compensation. This provision substantially mirrors the shareholder liability provision already present in New York’s Business Corporation Law. Plaintiffs are required to notify the members they intend to hold them liable and have a limited window to pursue the members after they fail to collect from the LLC. Members held liable can seek contribution from other members. It only applies to members of a NY LLC.
We’ll let you know if and when Governor Cuomo signs the law.