The New York State Legislature recently amended the Wage Theft Protection Act (WTPA) of 2010 in several important ways that will affect both employers and employees. For one, these changes affect the employer's obligations and how and when they must notify employees of their wages. Likewise, the amended version of the WTPA also affects an employee's legal rights when an employer fails to comply with the WTPA.
Annual Wage Notice Requirement is Eliminated Starting this Year
While employers were originally required under the law to provide their employees with an annual wage notice no later than February 1st of each year, the new amendments to the WTPA do away with that requirement. In fact, this change has already taken effect and employers need not provide current employees with annual wage notices for 2015. However, employers still must provide all newly hired employees with a wage notice in English and, if applicable, the primary language of the employee as identified by the employee, within ten (10) days of hiring.
This wage notice for newly hired employees must include all of the following:
· the employee's rate of pay;
· the basis of the employee's pay (i.e. hour, shift, day, week, salary, commission, etc.);
· any allowances claimed as part of minimum wage (i.e. tip, meal, lodging allowances, etc.);
· the employer's regular payday;
· the name of the employer; any other "doing business as" names of the employer;
· the physical address of the employer's business;
· a mailing address (if different from the business' physical address); and
· the employer's telephone number.
Newly hired employees must also be asked to sign and date a written acknowledgment that they received a wage notice from the employer, which the employer must keep in its records for six years, just as originally required in the WTPA of 2010.
Form notices and acknowledgements are available from the New York State Department of Labor in English and several other languages.
Penalties Against Employers for Failure to Provide Proper Wage Notices and Statements Have Been Increased to Encourage Compliance
The new WTPA amendment also increases the amount that an employer may be required to pay newly hired employees (or the commissioner of the Department of Labor, on behalf of the employee) if it fails to provide the wage notice to new employees within ten days of the his or her first day of employment. Previously, employees not provided with such notice within ten days of their first day of employment could bring a civil lawsuit against the employer, but could only expect to receive $50 per work week in which the violation occurred or continued, and a maximum of $2,500 (in addition to costs and reasonable attorney fees). The recent amendment, however, allows employees to recover $50 per day, or up to $5,000 (in addition to costs and reasonable attorney fees).
In addition, the amendment increases the penalties faced by employers for failing to provide current employees with wage statements to accompany each paycheck. A civil lawsuit against an employer for failure to provide these wage notices may be brought by either the employee or the commissioner of the Department of Labor (on behalf of the employee), and could result in a judgment against the employer for up to $250 per workday (per employee) in which the violation occurs or continues, up to $5,000 (in addition to costs and reasonable attorney fees). This is up from $100 per workday and up to $2,500 in the original WTPA.
Employer Defenses Against the Penalties are Preserved
It is important that both employers and employees understand that the amendment to the WTPA still allows employers to defend allegations of failing to provide either a proper wage notice to newly hired employees, or wage statements to employees with their paychecks. Under both of these sections, an employer may still shield themselves from liability if it made complete and timely payments of all wages due to the employee, making those employers who fail to make proper wage payments the primary target of these portions of the statute. The WTPA also allows an employer to avoid liability if it can show that it reasonably believed in good faith that it was not required to provide the employee with the a wage notice or statement discussed in the law.
The Powers and Responsibilities of the Commissioner of the Department of Labor Are Altered in Several Important Ways
The new WTPA amendment strengthens the powers of the New York State Department of Labor Commission. The Commissioner is now empowered to issue WTPA compliance orders to companies that have violated the requirements of certain labor laws: employee wage payments; the minimum wage act; minimum wage standards and protective labor practices for farm workers; day of rest laws; or meal periods. Employers that receive a compliance order under this provision will be monitored and subject to onerous reporting mandates by the Department of Labor.
Also, now when the Commissioner investigates WTPA complaints, the investigation must now cover the entire six-year statute of limitations period or notify all affected employees otherwise. The Commissioner may no longer limit its investigation to the most recent years, then, without notifying all employees that could potentially have the right to pursue action against the employer in court for any years excluded from the investigation. Civil penalties to be assessed by the Commissioner have also increased under the amendment, although the Commissioner still yields great discretion in this regard, including the ability to award an additional 15% of damages on top of any monies actually owed to an employee.
Further, the New York Legislature also alters the Commissioner's discretion when filing a civil penalty against an employer after the statute of limitations on an employee's claim has expired in the amended WTPA. In this situation, the amendment has removed the Commissioner's discretion in choosing whether to give a portion of the penalty against the employer to the employee. The amendment now requires the Commissioner to assign a portion (the amount of the employee's wage/salary claim) of the penalty to the employee if they request for those monies due.
The Definition of "Same Employer" Has Been Expanded
The definition of "same employer" is expanded in the amended WTPA, allowing the court or the Commissioner to treat an employer similar in operation and ownership to another employer that has previously found in violation of wage payment regulations, the minimum wage act, or minimum wage standards and protective labor practices for farm workers, as the "same employer" for purposes of enforcement of the Act. This expanded definition of a "same employer" only applies if the new employer meets all of the following criteria: 1) it engaged in substantially the same work as the other employer; 2) the working conditions are substantially the same; and 3) the supervisors are substantially the same or, if the new employer uses substantially the same production process, it produces substantially the same products, and has substantially the same customers. This change makes it easier for employees and the Commissioner to enforce the law against employers that attempt to evade past labor law obligations.
Individual LLC Members Who Fail to Pay Debts, Wages, and Salaries to Their Employees Are No Longer Shielded
The top ten members of a Limited Liability Company (LLC) can now be liable for all unpaid debts, wages, or salaries due to employees. There are substantial procedural requirements for seeking recovery from LLC members, but this provides employees with another layer of protection against employers who fail to pay proper wages.
Contractors and Sub-Contractors Must Now Notify Employees When Found to Have Violated Minimum Wage Laws
Finally, the new amendment to the WTPA imposes a new notice requirement on Contractors and Sub-Contractors that have been found to have failed to pay all employee wages or to comply with the minimum wage standards. In that case, the Contractors and/or Sub-Contractors must notify all their employees of the violations. This notification must be provided to employees by an attachment to their paycheck and in accordance with any compliance order from the Commissioner. This amendment increases the transparency of employers who are Contractors or Sub-Contractors and who have violated labor law, and ensures that their employees are made aware of any such violations.
Both employers and employees will be affected by these new amendments in potentially substantial ways. Employers should ensure that they are in full compliance with wage laws and regulations. For help reviewing current practices or to respond to an inquiry by the Commissioner on any of these issues, our attorneys are available to work with employers. Employees who believe they are not being properly paid by their employers can contact one of our attorneys to discuss what options they may have under this and other laws and regulations.
Erin Lloyd, Esq. is an employment and business lawyer and partner at Lloyd Patel LLP, a general practice law firm. Ms. Lloyd works closely with each client to develop a personalized strategy based on his or her individual needs and concerns. She can be reached at email@example.com or (212) 729-4266. For more information on Lloyd Patel LLP, visit their website at www.lloydpatel.com.
Samuel Gaultier is a second year law student at City University of New York School of Law focusing on criminal and administrative law, and an intern at Lloyd Patel LLP. Mr. Gaultier expects to graduate with his J.D. in May 2016.