CLIENT UPDATE

Putney, Twombly, Hall & Hirson LLP
521 Fifth Avenue
New York, NY 10175
Tel: (212) 682-0020

 

November 22, 2011

New York Wage Theft Prevention Act

With the holidays upon us, and the new year just around the corner, we remind employers of their obligations to inform all employees - including exempt employees - in writing of certain information, including, inter alia, pay rate, overtime rate, and designated pay date.  Such written notification must be provided between January 1 and February 1 of each year.

 As we previously advised you, the “Wage Theft Prevention Act” (“the Act”) became effective on April 12, 2011 and expands the notice requirements of the New York Labor Law, increases penalties for wage and hour violations, and expands the enforcement powers of the New York State Department of Labor.  See our Alerts December 16, 2010 and March 24, 2011.   

            Under the New York Labor Law, as modified by the Act, employers must inform new hires in writing of their rate of pay, overtime rate, and designated pay date, and must provide such notice to all employee between January 1 and February 1 of each year.   In addition, the notice must state how the employee’s wages will be paid (i.e., hourly, yearly), any allowances taken against the minimum wage, such as tip, meal, or lodging credits, as well as certain identifying information about the employer.  Notice is required seven (7) days before any change in the requisite information unless the information is set forth in the wage statement which accompanies the payment of wages reflecting the changed circumstances.  Sample notices prepared by the Department of Labor are available at http://labor.ny.gov/formsdocs/wp/ellsformsandpublications.shtm.  These notices are available in English, Spanish, Korean, Haitian Creole, Chinese, Russian and Polish. The notice must be signed by the employee and kept by the employer for at least six (6) years.  A copy of the notice must be provided to the employee.

The Act also amended the Labor Law to require employers to provide additional information with the wage statement that accompanies each paycheck, including the dates for which the payment is issued, the rate of pay, how the paycheck is calculated, and any allowances that are made against the minimum wage.   
 
The Act creates a private right of action for employees to bring a lawsuit for the failure to comply with the amended provisions of the Labor Law, which can result in damages of up to $2,500, plus costs and attorney’s fees.  The Commissioner of Labor may also institute legal action.   

 

Significance for Employers

Employers must be prepared to provide the appropriate written notices to all employees between January 1 and February 1, 2012 (and every subsequent year) and to keep the signed notices for at least six years.  Moreover, to comply with the increased reporting requirements, employers will need to ensure that their new hire notification and their wage statement comply with the Act’s requirements.  Given the addition of a private right of action and the potential for increased penalties for violations of many aspects of the Labor Law, employers will need to remain especially vigilant.

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If you have any questions regarding the Wage Theft Prevention Act, please do not hesitate to contact us.