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New York's Wage & Hour Laws to be Amended by Legislature

In a previous post, we discussed whether employees can sue for not receiving "Wage Notices" required under New York's Wage & Hour Laws. Under the current law, employers must provide wage notices to employees upon hire and prior to February 1 of each subsequent year.

New York is now set to amend the Wage Theft Prevention Act, one of New York's Wage & Hour Laws, the law putting the above-described requirements in place, with the result being a somewhat mixed bag in terms of employee's rights. (The full text of the new bill, which has been passed by the Legislature and awaits Governor Cuomo's expected signature, can be found here.)

The primary changes with regard to the Wage Notice requirements are as follows:

  • There is no longer an annual notice requirement. Employees are now entitled to detailed wage notices only at the time of hiring (or in the hospitality industry, whenever the employee's pay information changes).
  • The penalties for non-compliance with the Wage Notice requirement increase from $50 dollars per week up to a maximum of $2,500, to $50 per day up to a maximum of $5,000.

The new law also changes New York's wage laws in other ways:

  • The penalties for non-compliance with the requirement to provide employees with a paystub increases from $100 a week up to a maximum of $2,500 to $200 per day up to a maximum of $5,000.

New York prohibits retaliation against employees who complain about not receiving proper pay and permits the employee or the Commissioner of the New York Department of Labor to bring a lawsuit. The new law makes the following changes:

  • Previously the Commissioner had the power to assess penalties that are called "liquidated damages" against an employer in violation of the Act: a payment by the employer to the employee no to exceed $10,000. The new law expands the Commissioner's discretion - he may now levy damages up to $20,000.
  • The new law also raises the maximum amount of liquidated damages when the employee brings his own suit from $10,000 to $20,000.
  • The statute of limitations for the Commissioner's investigation is now six years.

The new law also closes a potential loophole allowing employers to avoid past liability by simply re-incorporating under a new name and/or ownership structure: if these employers continue to produce "substantially the same products" with "substantially the same production process" and "body of customers," they will be considered under the law to be the same employer as previous.

Similarly, the new law amends the Limited Liability Company Law to hold the ten members with largest percentage ownership interests personally liable for any unpaid wages. The new provision largely mirrors Business Corporation Law, which holds the ten largest shareholders of a private corporation liable.

We will continue to follow these developments and will advise you when Governor Cuomo signs the law.

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