NY Wage Theft Protection Act—Legislative Update

On December 29, 2014, New York Governor Andrew Cuomo signed into law S05885 (the Amendment), a bill amending the Wage Theft Protection Act, the comprehensive labor legislation originally enacted in 2011. The New York State Assembly and Senate passed the Amendment June 19, 2014. Most significantly, and representing a relief for employers, the Amendment eliminates the requirement that employers provide employees with an annual written notice of their rates of pay and certain pay-related information. Employers, however, are still required to provide this disclosure to all new hires and to existing employees upon implementing any changes to the information provided in the disclosure, unless the change is noted in the employee’s wage statement.

In addition to striking the annual notice obligation, the Amendment increases the penalties for violation of the Act. Failure to provide the proper notice within 10 business days of an employer’s hire date results in damages of $50 for each workday that the violation occurs, up to a maximum of $5,000 (up from $50 to $2,500 for each workweek). Failure to provide the proper wage statements results in damages of $250 for each workday that the violation occurs up to a maximum of $5,000 (up from $100 to $2,500 for each workweek).

The Amendment also includes the following changes:

• A provision requiring that employers that have previously violated the Act, or that have committed a willful or egregious violation, report specified employee and wage data to the Commissioner of Labor to be published on the Department of Labor’s website;
• A provision clarifying successor liability, as an employer that engages in similar operations and ownership to a prior employer that had previously committed a violation is liable for the acts of the prior employer for purposes of civil penalties;
• A provision requiring the Commissioner to assign a portion of any collected civil penalties to the aggrieved employee;
• A provision requiring a contractor or sub-contractor to notify all of its employees of any wage violations;
• A provision mandating that the 10 members with the largest ownership percentage of a limited liability company (LLC) be personally liable for all debts, wages, or salaries owed to employees of the LLC; and
• A provision establishing the Wage Theft Prevention Enforcement Account, a fund consisting of money collected from violations.

According to the Governor’s approval memo accompanying the Amendment, the effective date of the notification rule changes will be accelerated so as to remove the notice requirement on employers for the 2015 calendar year. Therefore, the New York State Department of Labor will not require annual statements in 2015. The Amendment’s remaining provisions will take effect February 27, 2015.

The full text of the Amendment can be found here. For more details relating to the 2011 Act see our previous briefing here.