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New York Wage Theft Protection Act

October 25, 2011

The New York Wage Theft Prevention Act (the “Act”), in effect April 12, 2011, amends the New York Labor Law to provide greater protections for employees in New York. The Act also imposes tougher penalties for employers who fail to pay their employees overtime or minimum wage.

Increased Employee Notice Requirements

The current Labor Law in New York requires that employers notify all newly hired employees, in writing, of their regular rate of pay, regular pay day, and overtime rate of pay if they are eligible for overtime. The New York Wage Theft Prevention Act (the “Act”) imposes additional notice requirements whereby employers must also include information about how the employee will be paid (e.g., by the hour, salary, commission, etc.) and about the employer’s intent to claim allowances (e.g., tip or meal allowances) as part of the minimum wage.

The required notice to newly hired employees must be provided that the time the employees are hired.  The Act allows employees to recover damages in court against employers who fail to provide such notice within 10 business days of an employee’s first day of work.  Employees may recover $50 for each workweek that the violation occurred or continues to occur (not to exceed a total of $2,500). Employees may also recover litigation costs and reasonable attorneys’ fees.

Employers must also obtain a written acknowledgement of the notice, signed and dated by the employee, and must maintain the employee’s acknowledgment(s) of the notice for 6 years.

The notice must also be updated and revised/updated notices must be provided to employees at least 7 calendar days prior to any changes made to the employee’s pay or other terms contained in the notice (unless such changes are reflected in the employee’s wage statement).

Pay Statements

The Act also requires that employers provide pay statements that specify the rates of pay, basis of pay, and the applicable dates that the wages cover. For employees who are eligible to receive overtime, pay statements must also include the overtime and regular pay rates, as well as the number of overtime and regular hours worked. Employers must also maintain payroll records and pay statements for 6 years under the Act; the current Labor Law requires that these records be maintained for only 3 years.

Employers who fail to provide the required pay statements may be subject to penalties under the Act.  Employees may recover $100 for each workweek that the violation occurred or continues to occur (not to exceed a total of $2,500), plus costs and reasonable attorneys’ fees.

Anti-Retaliation Provisions

The Act also provides greater anti-retaliation protection than the current New York Labor Law.  In the event of unlawful retaliation, the Act allows the Commissioner to order additional remedies, including liquidated damages (not to exceed $10,000), reinstatement with back pay, front pay where reinstatement does not occur, and injunctive relief designed to stop the retaliatory misconduct.

Civil and Criminal Penalties

The Act permits a recovery for liquidated damages of up to 100% of the total amount of wages due. This means that employees can recover twice the amount they are owed in overtime or wages.  The current New York Labor Law permits liquidated damages of only 25% of the overtime or wages due.  Employees may recover liquidated damages where the employer is shown to have violated the law and the employer fails to prove a good-faith basis for believing it was acting in compliance with the law.

The Act also provides for the recovery of prejudgment interest and attorneys’ fees in any civil action to recover unpaid wages brought by an employee.  Employees may also recover an additional 15% of the judgment owed, as well as attorneys’ fees and costs for enforcing the judgment, where employers have lost in court and still failed to pay overtime or wages due within 90 days.

The Act also imposes criminal penalties against employers that fail to pay overtime or minimum wage. Employers who violate the law may be found guilty of a misdemeanor and fined between $500 (minimum) and $20,000 (maximum) or imprisoned for up to 1 year.  If a second violation occurs within 6 years of the first conviction, the employer may be guilty of a felony.

Employers who fail to maintain appropriate overtime and wage records may also be found guilty of a misdemeanor and fined between $500 and $5,000 or imprisoned for up to 1 year.  A subsequent violation and conviction within 6 years will result in either a fine of $500 to $20,000 or imprisonment for a period not to exceed 1 year and a day, or both.

If you feel you are not being paid the overtime or wages you are entitled to, Contact our office as soon as possible.

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