A bill that would amend New York’s Wage Theft Prevention Act (the “Act”) awaits Gov. Andrew Cuomo’s signature. The changes offer both good news and bad news for New York employers.
Originally enacted into law in 2011, the Act aims to protect low-wage workers from unscrupulous employers who may attempt to pilfer their pay by mandating the provision of certain wage-related information to employees, including the employee’s rate of pay, how the employee’s pay is calculated, and the employee’s regular pay day. However, critics maintain that it overly burdens upstanding New York businesses.
Under the proposed amendment passed by both houses of the New York State Legislature in June, employers will no longer be required to give written notice of wage rates to all employees by February 1 of each year. However, the notification requirement will still apply to new hires, and the current Act’s document retention requirements remain in place.
The amendment also significantly increases the penalties for wage violations. Below are some of the proposed changes:
Higher monetary fines: Employers that fail to provide wage notices to new employees face fines of $50 per work day (increased from $50 per work week), up to a maximum of $5,000. Employers that fail to provide pay-rate earning statements with each wage payment face penalties of $250 per work day (increased from $100 per work week), up to a maximum of $5,000.
Stiffer penalties for repeat offenders: The maximum penalty for employers with a previous wage violation within the past six-year period will increase to $20,000 (versus $10,000 under the current law).
Increased liability: The bill imposes successor liability on employers that share similar ownership, operations, customers, or employees with another entity that has committed a labor law violation. The bill also amends the New York Limited Liability Company Law to impose joint and several liability for wage violations on the ten members of a limited liability company with the largest percentage of ownership interest.
Violation notification: The amendment requires contractors or subcontractors to disclose wage violations to all employees.
The bill will take effect 60 days after Governor Cuomo’s expected signature. Please check back for updates on this legislation as well as other proposals impacting New York and New Jersey employers.
If you have questions about the Wage Theft Prevention Act or want to ensure that your business is in compliance, please contact me, Bob Marisco, or the Scarinci Hollenbeck Labor and Employment attorney with whom you work.
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