NY Government: Going to California...

We sent out an email blast to our clients with known NY Operations, but I'm reposting it here in case I missed anyone... If you don't care about NY wage and hour law, stop reading.  And I mean it.

The NY Legislature took a big step towards full employment for wage and hour lawyers with the passage of the Wage Theft Protection Act. This new law, signed by outgoing NY Governor David Patterson on December 13, 2010, will become effective on April 12, 2011. Employers should start preparing now.

To summarize, this new law requires employers to provide additional information regarding wage payments, and imposes stiff penalties for employers who fail to comply with their wage payment obligations.

Highlights of the New Legislation

Ø Enhanced Notice Requirements: New York wage law already requires employers to give new employees written notice of their rate(s) of pay, overtime rate (if applicable) and regularly scheduled paydays. Employers must also state whether the employee is paid by the hour, shift, day, week, piece, commission, etc., and any intent to claim allowances (e.g., tip, meal or lodging allowances) as part of the minimum wage. Additionally, the notice must include the employer's name, any "doing business as" name, and the employer's physical address, mailing address (if different) and telephone number.

The Act requires employers to give employees notice not only at the time of hire, but also annually, on or before February 1 of each year. Notice must be given in both English and the employee's native language, and employees must acknowledge receipt in writing. Also, employers must provide at least seven calendar days' notice of any changes to the information required to be disclosed, unless the changes are reflected in new wage statements accompanying employees' pay.

Employers must maintain employee notice and acknowledgment records for a period of six years. If notice is not provided to employees within 10 days of initial employment, employers will be subject to penalties of $50 per employee, per week (up to $2,500), in addition to costs and reasonable attorney's fees. The Act permits the New York Labor Commissioner to bring an enforcement action and to seek additional penalties for noncompliance with this requirement.

Ø Employee Wage Statements: The Act requires employers to provide wage statements to their employees with each paycheck specifying the: (1) dates of the applicable pay period; (2) employee's name; (3) employer's name, address and telephone number; (4) rate and basis of pay; and (5) allowances, if any, claimed as part of the minimum wage. For non-exempt employees, the statement must also include the applicable regular and overtime pay rates, in addition to the number of regular and overtime hours worked during the pay period. Payroll records containing this information must be maintained for six years (up from three years). Violations can result in civil damages of $100 for each workweek that the violation occurred (not exceeding $2,500), in addition to costs and reasonable attorney's fees. Additional penalties may be sought and awarded in actions for noncompliance brought by the New York Labor Commissioner on an employee's behalf.

Ø Increased Civil/Criminal Penalties: The Act provides for increasingly strict penalties against employers who fail to pay their employees properly. First, the Act permits liquidated damages against an employer of up to 100% of the total amount of wages found to be due (up from 25% under existing law), unless an employer can prove it had a good faith basis for believing that it was in compliance with the law. Additionally, employers found liable who fail to pay the amount owed pursuant to a final judgment within 90 days will now be assessed an additional 15% in damages. The Act provides for the employee's recovery of prejudgment interest and reasonable attorney's fees in any civil action to recover unpaid wages.

The Act also imposes more stringent criminal penalties for failure to pay minimum wage or overtime wages due. It provides that an employer (including the officers or agents of any corporation, partnership or limited liability company)found not to have paid an employee's wages is guilty of a misdemeanor and will be fined between $500 and $20,000 or be imprisoned for less than one year for each offense. The Act treats each failure to pay employee wages within any workweek as a separately actionable offense. Repeat offenses may result in felony charges, more fines, and up to one year in jail. The Act threatens similar criminal penalties against employers who fail to maintain adequate employee wage records. Initial violations will be deemed misdemeanors, with fines between $500 and $5,000, or up to one year of imprisonment. For subsequent record violations, employers may face felony fines of between $5,000 and $20,000, imprisonment for a period of not more than a year and one day, or both.

Ø Posting Requirement: Employers found liable under the Act may be ordered by the Labor Commissioner to conspicuously post documentation explaining the violation(s) for up to one year.

Ø Whistleblower Protections: The Act also strengthens protections for whistleblowers in cases involving wage violations. Significantly, the Act protects employees from unlawful reprisal (including threats of retaliation) who raise a complaint based upon a "reasonable" and "good faith" belief that their employer has violated the law--even if no violation actually occurred. It also protects employees who assist in the investigation of another employee's complaint, or who have otherwise exercised rights protected by the Act. Upon a finding of retaliation, the Labor Commissioner may award compensatory and liquidated damages (not to exceed $10,000), enjoin acts of retaliation, and order injunctive relief, which may include employee reinstatement. Employees also may make claims of retaliation in court, with similar remedies awarded. Retaliation claims must be made within two years of the alleged retaliatory act, although the two-year statute of limitation is tolled by the filing of an administrative charge with the Labor Department.

To ensure compliance, and avoid the significant penalties for violations, employers with New York operations should carefully review the full text of the New York Wage Theft Prevention Act, which can be found here: . Employers must also review and revise their pay practices by the Act's April 12, 2011, effective date.

Thanks to my pal and competitor Tony Rao for pointing this out and thanks to Alex Sperry of our Sacramento office for drafting the analysis.