Are You Violating the Wage Theft Protection Act?

The Wage Theft Protection Act (WTPA), which became effective on April 9, 2011, aims to protect workers in New York State from underpayment by changing how they are notified of pay rates and salary statements.  The Act also augments civil and criminal penalties for employers who violate these new stipulations.

Give Notice to Your Employees, It’s Good for You

WTPA amends Section 195 of New York Labor Law by requiring that all private sector and public employers, other than government agencies, provide their employees with information as to their rate of pay, rate of overtime pay, whether the employee will be paid hourly, shift, commission, etc., all future allowances the employer intends to claim as part of minimum wage including tips, meals, and lodging, the pay date, all of the employer’s “doing business as” names, the employer’s physical address and or mailing address, and the employer’s phone number.  These facts have to be supplied at the time of the employees’ hiring, before work is performed, and on or before February 1 of each year or within 7 days of a change where the change is not subsequently noted on the employee’s next pay stub.  Additionally, the notice is required to be issued in both English and the primary language of the employee.  Templates of the notices are available on the Department of Labor’s website for the following languages: English, Spanish, Chinese, Korean, Creole, Polish and Russian.  However, employers can develop their own notices in so far as they incorporate all the necessary data.

Get Their Signature

Once the notice is issued, the employee must sign a statement acknowledging a receipt of the English and or foreign language version of it. The employee must also acknowledge that he or she has accurately identified their primary language to their employer.  Employers are to keep to these signed and dated acknowledgements on file for six years as well as provide a copy to the new hire.

Not only will workers be informed of when and how they are paid in the notice, but WTPA will also mandate payment statements detail the break down of employees’ wages into dates of work covered by each pay period, the rate of pay and the basis for it, whether the employee is being paid by the hour, shift, day, week, salary, piece, commission or otherwise, any allowances claimed as part of the minimum wage, the employee’s gross wages, deductions from such wages; and  the employee’s net wages.  If the employee is non-exempt, the statements must include the employee’s overtime pay rate and the number of regular and overtime hours the he or she worked. Payroll records with this information must be maintained for every employee for each week worked for six years.

What Happens if You Don’t Comply

The ramifications of non-compliance with the WTPA’s regulations can be quite severe.  For example, if an employer does not give a new employee a notice within ten business days of his or her first day of employment, then the worker may be able to recover $50 a week for each week which the violation occurred or continues to occur up to a maximum of $2,500, along with attorneys’ fees.  Likewise, if an employer is found to be in violation of any section of the WTPA pertaining to incorrect pay statements, the employee can recover $100 for each work week during which the violation occurred or continues to occur up to a maximum of $2,500, together with attorneys’ fees and costs.

Furthermore, if an employer violates New York’s wage payment laws, the employer may be ordered to post a notice of the violation in an area visible to employees for up to one year. The embarrassment and detrimental effects of this punishment increase if the violation is determined to have been willful. The employer would then post the notice in an area that is visible to the general public for up to ninety days. 

Finally, the WTPA imposes stricter criminal punishments on employers who fail to pay employees minimum wage or overtime compensation by determining that they will be guilty of a class B misdemeanor for this offense. If the employer is convicted, he or she can be fined between $500 and $20,000 or imprisoned for up to one year. If an employer is convicted of a second offense within six years of the prior offense, then the employer will be charged with a felony, and upon conviction shall be fined between $500 and $20,000 or imprisoned for up to one year and one day.

Be Proactive

While The Wage Theft Protection Act has enhanced the meaning of “Employers” to include partnerships and limited liability corporations, all companies operating in New York should be aware of its new employee regulations.  Setting up a simple checklist of what needs to be included in employee notices and pay statements can help prevent the costly and adverse economical consequences of a labor violation.