New York Wage Theft Prevention Act Annual Notice Requirement Eliminated

January 02, 2015

BY EMILY R. PIDOT, STEPHEN P. SONNENBERG & SARA B. TOMEZSKO

On December 29, Governor Andrew Cuomo signed a bill passed by the legislature in June, 2014 amending the New York Wage Theft Prevention Act. Notably, the amendments eliminate the requirement that all New York employers notify and receive written acknowledgement from every worker regarding their rate of pay, allowances, pay day, etc. every year prior to February 1. Technically, the bill does not go into effect for 60 days, which would make this relief meaningless for 2015. However, according to the Governor’s signing statement, the legislature has agreed to an amendment as soon as it reconvenes in January to make the repeal effective immediately. In light of this, the NY DOL has posted on its website a notice that it will not enforce the requirement for 2015. Thus, employers can safely assume that they no longer have any obligation to provide the annual notice under New York law. The notice still must be provided for new hires.

We discuss all of the amendments to the Wage Theft Prevention Act more fully below.

I. Annual Wage Notice Requirements for Employers Repealed, But New Hire Wage Notices, Earnings Statements and Recordkeeping Requirements Still in Place

As stated above, the amendments repeal the requirement in New York Labor Law Section 195(1) that employers provide annual notices to each employee between January 1 and February 1 of each year. Given the announcement on the NY DOL’s website, employers will no longer be required to provide annual notices in 2015 and all subsequent years.

While annual notices will no longer be required, the WTPA still mandates that employers provide wage rate notices to employees within ten business days of their first day of employment with all of the same information as previously required. (For a complete list of required items in new hire notices, see here.) The amended WTPA also left unchanged the requirement that employers issue earnings statements with each wage payment listing the employer’s name, address and telephone number, gross wages, deductions, net wages and the dates of work covered by the payment of wages (DOL guidance defines “dates of work” to mean the “beginning and ending date of the dates covered by that payment”). Employers must continue to maintain records of wage notices (along with employees’ written acknowledgment of receipt of the wage notices) and earnings statement information for six years.

II. New and Increased Damages for Violations; More Stringent Enforcement Mechanisms

Increased Damages

The bill also increases potential damages awarded for wage and hour violations:

Damages for failure to provide new hire wage notices are increased from $50 per work week to $50 per work day that the violations continue to occur, capped at $5,000;
Damages for earnings statement violations are increased from $100 per work week to $250 per work day that the violations continue to occur, capped at $5,000; and
Employers who commit repeat violations within six years of their first violation also may be required to pay a newly-created civil penalty of $1,000 to $20,000 at the Commissioner of Labor’s discretion. Repeat offenders and those whose violations are willful or egregious may also be directed to report employee data to the Department of Labor for publication on the Department’s website.

Joint and Several Liability for LLC Members

The bill also amends the New York Limited Liability Company (“LLC”) Law to impose joint and several personal liability on the ten members of every LLC with the largest percentage ownership for all debts, wages, or salaries due and owing to any of its laborers, servants or employees for all services performed by them for the LLC. Calculation of the ownership stake will be determined as of the beginning of the period of the wage violation. The amendments require that before any employee may bring a charge against an LLC member, the member must be given 180 days’ advance written notice. LLC members are entitled to pro rata contribution from other liable LLC members.

Employers May Not Reorganize To Evade Repeat Wage Violation Liability

The bill prohibits employers from changing their ownership structure to avoid repeat wage violation liability. A new employer similar in operation and ownership to a prior employer charged with violating the wage payment laws shall be deemed the same employer for the purposes of being charged with repeat violations. “New” employers reorganized to avoid the Act’s reporting requirements will be responsible for a prior employer’s violations if:

the new employer’s employees are engaged in substantially the same work in substantially the same working conditions under substantially the same supervisors; or
the new employer has substantially the same production process, produces substantially the same products and has substantially the same body of customers.

Contractor Accountability

The bill also amends the New York Construction Industry Fair Play Act to require contractors and subcontractors that commit wage violations to notify all employees at all worksites of the nature of the violations.

Additional Enforcement Mechanisms

Investigations by the Commissioner instituted under the amended WTPA will be subject to a six-year statute of limitations, except in limited circumstances. The amendments also mandate, rather than permit, the Commissioner to assign money that constitutes wages, wage supplements, interest on wages or wage supplements, or liquidated damages to an aggrieved employee for certain violations of the Act.

Please feel free to contact us if you have further questions about compliance with the amended WTPA.

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