The New York Wage Theft Protection Act, effective April 9, 2011, (the “Act”) amends Section 195 of the New York Labor Law.  It grants greater rights to New York employees and exposes New York employers to increased notification and record keeping requirements and stiffer sanctions for non-compliance for wage and hour violations. The Act requires employers to provide employees with detailed information in a written Notice at the date of hire (and periodically thereafter) regarding the manner in which they are to be paid by the employer for their work, to provide such Notices in English and in each employee’s native language if English is not his or her native language and to obtain a written Acknowledgement of receipt signed and dated by the employee each time such Notice is given.  The Act also expands the information that must be reported on wage statements and in the payroll records that must be maintained by employers, extends the timeframe for which payroll records must be maintained by employers (from three years to six years), expressly includes anti-retaliation provisions, grants enforcement rights not only to the Labor Commissioner, but directly to employees in certain circumstances and provides for recovery of court costs and attorney’s fees by the employees, in addition to other damages.

I. New Employee Notice and Acknowledgement Requirements regarding Hours and Wages as of the Date of Hire.

Section 195 of the New York Labor Law currently requires that employers notify all newly hired employees in writing of their regular rate of pay, their pay day and their overtime rate of pay (if classified as a non-exempt employee eligible for overtime pay) and to obtain a written acknowledgement from each employee of receipt of such notice. 
Effective April 9, 2011, Section 195 of the New York Labor Law, as amended by the Act, now also requires employers to provide to each employee in writing, when hired, a written Notice containing the following information:

(1) The rate or rates of pay;
(2) If the employee is a non-exempt employee (i.e., a non-salaried hourly employee entitled to receive overtime pay), the regular hourly rate of pay and the overtime rate of pay;
(3) If an exempt employee, the applicable exemptions (as set forth in the Commissioner’s “Guidelines for Written Notice of Pay Rates and Regular Payday” and instructions, which still apply);
(4) The basis of the rate of pay, i.e., whether paid by the hour, shift, day, week, salary, piece, commission or other;
(5) Allowances, if any, claimed by the employer as part of the minimum wage, including tip, meal and lodging allowances;
(6) The regular pay day designated by the employer;
(7) The name of the employer and any “doing business” names of the employer;
(8) The physical address of the employer’s main office or principal place of business;
(9) The employer’s mailing address, if different from the main office or principal place of business;
(10) The employer’s telephone number;
(11) Together with such other information as the Commissioner deems material and necessary from time to time.

Effective April 9, 2011, this same Notice thereafter also must be given, as to all employees regardless of the date of hire, on or before February 1st of each subsequent year during the period of employment and at any time thereafter that there is a change in any of the above enumerated information, unless in the latter case, such information is contained in the employee’s wage statement provided at the time of payment of wages as discussed further in Section II below.
The Act requires such notice to be given to the employee in English and if English is not the primary language of the employee, then also in the employee’s primary language.

The Act also requires the employer to obtain, at the time that the initial Notice is given and each time it is subsequently updated or a new Notice is given, a written Acknowledgement from the employee of his or her receipt of the Notice. 
The employee’s Acknowledgement (obtained from the employee upon each receipt of the mandatory Notice) must be provided in English and if English is not the employee’s primary language, then also in the employee’s primary language.  The Acknowledgement must be signed and dated by the employee, affirming that the employee correctly identified his or her primary language to the employer, and if English is not the employee’s primary language, further affirming that the Notice was provided by the employer to the employee in such primary language, or in the event that the Commissioner of Labor has not provided a dual-language Notice and Acknowledgement template in the employee’s primary language (as discussed further below), that it was provided in English and otherwise complied with the requirements of the Act.

Under the Act, the Commissioner of the Department of Labor is required to provide templates for use by employers to comply with the dual language Notice and Acknowledgement requirements for employees for whom English is not their primary language.  Each such template must include English and one other language, as determined by the Commissioner in his sole discretion, based upon the size of the New York State population that speaks that particular language and any other factor that the Commissioner deems relevant.

In the event that no template has been provided by the Commissioner in the particular language that an employee has designated to the employer as his or her primary language, then the employer can provide the Notice and Acknowledgement in English and will be deemed to have complied with the requirements of the amended law.  In this situation (where the Commissioner has not provided a template in the employee’s primary language) it is recommended that the Acknowledgement include an affirmation by the employee that the Commissioner has not provided a template for use by the employer in the employee’s primary language and that the Notice and Acknowledgement were provided in English as required by the Act. 

 The templates can be found on the Department of Labor’s website at:
 www.labor.ny.gov/workerprotection/laborstandards/workprot/lshmpg.shtm.

The Act specifically states that an employer shall not be penalized for errors or omissions in the non-English portions of any such notice or acknowledgement. 
 
If an employer fails to provide the requisite Notice within ten (10) business days of the employee’s first day of work, the employee can commence a civil action to recover damages in an amount equal to $50.00 for each work-week that the violation occurred or continues to occur, up to a statutory cap of $2,500, plus court costs and reasonable attorneys’ fees and any appropriate declaratory and/or injunctive relief.
In addition, the Commissioner may commence legal action on behalf of an employee who is not provided the requisite Notice (including the date of hire or the annual Notices), including commencing an administrative action that permits recovery of costs, attorneys fees and declaratory and/or injunctive relief together with $50 for each work-week of noncompliance, without limitation.

Employers are also required under the Act to notify employees either in writing or by posting publicly the employer’s policy regarding sick leave, vacation, personal leave, holidays and hours.  Employers are also required to notify any terminated employee, in writing, of the exact date of such termination as well as the exact date of cancellation of employee benefits, not later than five (5) working days after the termination date. Failure to notify an employee of cancellation of accident or health insurance will subject the employer to an additional penalty under Section 217 of the Labor Law. 

Likewise, unless any subsequent changes to the employee’s pay that differ from the terms and conditions stated in the Notice given at the date of hire are reflected in a proper, employee’s Wage Statement that complies with the new statutory requirements as discussed in Section II below, before the employer can make any changes to the employee’s pay or other terms contained in the original Notice given at the date of hire, the employer must provide the employee with a written Notice specifying any such changes at least seven (7) calendar days prior to the effective date of any such change.

II. Wage Statement Requirements.

Under the Act, employers must provide to each employee with every payment of wages, a Wage Statement that lists the following information:

(1) The dates of work covered by that payment of wages;
(2) The name of the employee
(3) The name of the employer;
(4) The address and phone number of the employer;
(5) The rate or rates of pay and the basis thereof (i.e., whether paid by the hour, shift, day, week, salary, piece, commission or other);
(6) The gross wages;
(7) All deductions;
(8) Allowances, if any claimed as part of the minimum wage;
(9) Net wages;
(10) For non-exempt employees entitled to overtime payments, the overtime rate or rates of pay, the number of regular hours worked and the number of overtime hours worked;
(11) For all employees paid a piece rate, the applicable piece rate or rates of pay and the number of pieces completed at each piece rate;

Upon request of the employee, the employer is now also required to furnish an explanation in writing of how such wages were computed.

If the employer does not provide a Wage Statement with the required detail, the employee may bring a civil action in court against the employer and recover $100 in damages for each work-week that the violation occurred or continues to occur up to a statutory cap of $2,500, plus court costs and reasonable attorney’s fees.  However, in this situation, the employer can defend the claim by demonstrating that it actually paid to the employee all wages that were due and owing.

III. New Requirements for Retention of Payroll Records.

Effective April 9, 2011, payroll records, including the Notices and Acknowledgements and Wage Statements required under the Act, now must be preserved by the employer for a period of six (6) years from the date of creation rather than three (3) years.

IV. Additional Damages and Penalties for NY Labor Law Violations.

In addition to the penalties described above, the Act generally stiffens the penalties available for violations of the NY Labor Law. The Act permits employees to recover the full amount of any underpayment of wages and prejudgment interest in addition to attorney’s fees in any civil legal action commenced in a court of competent jurisdiction.  Likewise, the amount of liquidated damages available in court actions and in administrative proceedings has increased significantly, from twenty-five percent (25%) to one hundred percent (100%).  There are now also additional penalties if the employer fails to comply with administrative orders or pay judgments on a timely basis.

Similarly, the criminal sanctions have been increased.  Previously, the Labor Law provided criminal penalties based on an employer’s failure to keep records or pay wages. Under the Act, criminal penalties are also provided for an employer’s failure to pay minimum wages and overtime compensation and for employer retaliation.  Under the Act, criminal penalties also can be obtained against not only corporations, but also the officers and members of partnerships and limited liability companies.

V. Retaliation.

Employers are prohibited under the Act from retaliating against or threatening to retaliate against any employees engaging in protected activities, for example, making a complaint in good faith that the employer has engaged in conduct that violates the Labor Law or any order issued by the Commissioner.  Employees are also protected against retaliation for providing information and testifying, in addition to filing complaints.

The Act also grants to the Commissioner new, broad powers to investigate wage and hour complaints without interference from the employer.  Under the Act, the employer is now required to permit the Commissioner (and his agents) to question employees about the terms and conditions of their employment without interference, in a private setting at the place of employment, during working hours.  The Act also grants the Commissioner authority to post notices of wage violations at the work site in a prominent location visible to employees for up to a year.  For willful violations, such notices may be required to be posted by the Commissioner in a location visible to the public for up to ninety (90) days.

Under the Act, the sanctions against employers who retaliate against employees engaging in a protected activity are strengthened.  The new law makes clear that “threatening” such an employee will constitute prohibited retaliation.  Similarly, the Act states that the two (2) year statute of limitations on retaliation claims runs from the date of such retaliation, not the employee’s date of hire.

Employers who retaliate against an employee engaging in a protected activity will be required to pay damages in an amount up to $10,000 for every aggrieved employee.  The Act also authorizes the Commissioner to redress retaliation by all appropriate relief, including awarding damages, reinstatement of employment and awarding front pay and issuing injunctions, in addition to awarding costs and reasonable attorney’s fees.

VI. Recommendations.

(1) Review and utilize the forms available at the Department of Labor website. 
(2) Review and revise all new-hiring procedures and use the new Notice and Acknowledgement forms for all new hires.
(3) Check the Commissioner templates and follow the rules regarding dual-language Notices. 
(4) Review and revise existing policies to require that all employees receive the requisite annual written Notice and that they provide to you as the employer the requisite Acknowledgement beginning on February 1st of 2012.
(5) Make certain all Wage Statements comply with the requirements of the Act and contain all legally mandated information.
(6) Train all executive staff and all managers and supervisors with respect to the new rules, particularly as they relate to retaliation and the associated penalties and the Commissioner’s new investigative powers and that permit recovery of attorneys fees and in some cases individual criminal sanctions against management as well as against the corporation, partnership or limited liability company for violations.
(7) Keep all payroll records for at least six (6) years.
(8) Seek assistance from your employment legal counsel as needed.

For further information contact:
Carol S. Maue, Esq., Partner
Corporate Department
Boylan Code, Code, Vigdor & Wilson, LLP
(585) 232-5300
cmaue@boylanbrown.com