New York Wage Theft Prevention Act Requirement for Annual Wage Notice Eliminated

Jan 9, 2015 | Blog

On December 29th, 2014 Governor Andrew Cuomo signed a bill amending the New York Wage Theft Prevention Act (“the Act”) which went into effect on January 1, 2012. The Act was designed to prevent employers from failing to pay appropriate employee wages. The recent amendments (available here) have eliminated the requirement for employers to provide annual wage notices before February 1st of each year. However, employers will still be required to provide pay date and pay rates for employees at the time of hire.

There are a few other significant changes to the Act that will go into effect as well. Notably, failure to abide by the Act’s requirement to provide new employees wage notices within 10 days of hire will result in employer penalties of $50 per worker, per workday up to $5,000 maximum (an increase from the previous $50 per worker, per workweek up to a $2,500 maximum). Failure to provide earnings statements will also result in a penalty increase from $100 per week up to a $2,500 maximum to $200 per day up to $5,000 maximum.

The amendments also create a Wage Theft Prevention Enforcement Account which is designed to offset the costs incurred by the Commissioner for the administration and enforcement of the law. This account will be used to fund penalties to be collected by the New York Labor Department for violation of the Act.

Additionally, the successor to an employer that previously violated the Act is now deemed liable for the actions of the predecessor employer. Similarly, if an employer ceases the current business to form a new one with similar operations, it still must pay out all outstanding obligations to the employees of the former business or the successor will also be held liable.

Personal liability of limited liability company (LLC) members will also be affected. Under the new law, 10 members with the largest percentage of ownership in an LLC are now jointly and severally liable for all debts to employees.

The new changes will take effect on February 27, 2015 (60 days after the governor signed the bill into law). Given the immediate enactment of the bill, employers will not be required to provide annual wage notices to New York employees for 2015.

If you have any questions or would like further information on labor and employment law issues, please contact Philip S. Mortensen.