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Topics Wage/Hour

Amendments to New York's Wage Theft Prevention Act: A Double-Edged Sword for Employers

Date   Jan 23, 2015

On December 29, 2014, Governor Andrew Cuomo signed a bill into law that amends the New York Wage Theft Prevention Act (the "Act"). 

Executive Summary: On December 29, 2014, Governor Andrew Cuomo signed a bill into law that amends the New York Wage Theft Prevention Act (the "Act"). While the amendments relieve New York employers from some administrative burdens, that is where the good news ends for employers. 

The amendments eliminate the annual wage notice requirement imposed on New York employers, with the exception of employees in the hospitality industry, effective immediately for the 2015 calendar year.  The New York Department of Labor provides a notice on its website confirming that it "will not require annual notice statements in 2015" for existing employees.  Employers should be reminded, however, that they are still required under the Act to provide wage notices to new employees within ten business days of their first day of employment, employees in the hospitality industry, and employees affected by a change to the information contained in their prior wage notices, excluding increases in pay rates if such increases are properly reflected in employees' wage statements.

While employers welcome the elimination of the annual notice requirement, they should be aware of increased penalties, potential successor liability and personal liability for certain LLC members, as well as heightened contractor and subcontractor accountability under the Act, all of which are effective as of February 27, 2015 – 60 days after the Act was signed into law on December 29, 2014.  Employers who fail to provide required wage notices are subject to increased civil penalties in the amount of $50 per work day that the notice is not provided, not to exceed $5,000.  (Previously, the penalty was assessed at $50 per work week, not to exceed $2,500.)  Employees can also commence private actions for damages against their employers in the amount of $50 per work day that the notice is not provided, not to exceed $5,000.  Repeat offenders within the prior six years can also be subjected to enhanced penalties not to exceed $20,000.  The amendments go so far as to impose liability on successor entities for violations caused by predecessor companies as well as personal liability for the ten limited liability company ("LLC") members with the largest ownership share of the LLC.  The amendments also require contractors and sub-contractors found to be in violation of the Act to provide written notice to all employees regarding such violations.

To avoid any penalties, New York employers must fully understand the amendments to the Act, and review their practices to ensure compliance.  For more detailed information regarding the amendments to New York's Wage Theft Prevention Act and to ensure compliance for the 2015 calendar year, please contact the author of this Alert, Eric Su, esu@fordharrison.com, who is an attorney in FordHarrison's New York City office. You may also contact the FordHarrison attorney with whom you usually work.