New York Enacts the Wage Theft Prevention Act

On December 13, 2010, New York State passed the Wage Theft Prevention Act (the “Act”), which requires employers to provide additional information to employees regarding the payment of wages and increases the penalties for wage payment violations. The Act becomes effective April 9, 2011 and employers are strongly encouraged to revise their pay practices by then.

Since 2009, New York required employers to inform new employees, in writing, of their designated pay date, rate of pay, and overtime rate, if applicable. The Act expanded the employers’ obligations and now requires that employers provide the following information in writing to employees upon hire and by February 1 of each year: (1) the employee’s rate of pay and how it is paid (i.e., hourly, shift, daily, weekly, salary, piece, commission, etc); (2) the overtime rate (if applicable);  (3) allowances claimed against minimum wage; (4) the employee’s regular pay day; (5) the employer’s name and any “doing business as” names; (6) the address of the employer’s main office or principal place of business and mailing address, if different; and (7) the employer’s telephone number. 

The Act requires that employees sign and acknowledge this notice each time they receive it. The notice must be provided in English and in the employee’s primary language if it is not English, and must include an affirmation that the notice was provided in the employee’s primary language.  The Act directs the Labor Commissioner to prepare template notices in English and other languages.  If the Commissioner does not prepare a notice in an employee’s non-English, primary language, an employer is deemed in compliance if it provides the employee an English notice.  If any of the information in the notice changes, the employer must notify the employee, in writing, at least seven (7) days prior to the change, unless the changes are reflected on an employee’s wage statement.

In addition, employers must provide the following information with every wage payment: (1) dates of work covered; (2) employer’s name, address and telephone number; (3) the rate of pay and the manner in which it is paid (hourly, salary, commission, etc.); (4) gross wages; (5) net wages; (6) deductions; (7) allowances against minimum wage; and (8) for non-exempt employees, the regular rate, overtime rate, and the number of regular and overtime hours worked in the pay period.  For piece rate employees, employers also must provide the applicable rate of pay and the number of pieces completed at each piece rate. Employers must retain both the written acknowledgement and the wage statements for six years.

Practice Pointer:  The Act provides significant penalties for violations and empowers the Commissioner to file claims directly against employers.  Therefore, prior to the law’s effective date, employers should review their payroll practices to identify what additional information they will need to provide employees.  Employers who use an outside payroll administrator should check that the administrator is prepared to implement the upcoming notice provisions.  

For additional information on this topic, please contact Douglas S. Zucker at dsz@zuckerhatfield.com, or Kathryn V. Hatfield at kvh@zuckerhatfield.com.