The New York Wage Theft Prevention Act (the Act), which takes effect on April 12, 2011, will be costly for employers who pay less than minimum wage, misclassify workers, fail to pay overtime compensation, or do not provide required notices to employees. The relevant provisions of the Act may be summarized as follows:

Required Notice to Employees
When they are hired and annually thereafter, employees must be notified in English and in their primary language of:

• The rate and the basis of pay, e.g., hour, week, salary, commission;
• Any allowances claimed as part of the minimum wage, e.g., tips, meals, or lodging;
• Regular scheduled pay day;
• Employer’s official name;
• Employer’s main office, principal place of business, and mailing addresses;
• Employer’s telephone number;
• Notice of any changes to information required 7 days before changes take effect.

When wages are paid, paystubs must provide employees the following information:

• Name of employee/name of employer;
• Dates of work covered by wages;
• Rate of pay, basis of pay, e.g., hour, shift, salary;
• Allowances, if any, claimed as part of the minimum wage;
• For non-exempt employees: overtime rate, regular hours and overtime hours worked.

Required Record-keeping
Employers must retain for six years payroll records showing required information, including employees’ acknowledgement that notices received were in employees’ primary language.

Penalties
Liquidated damages may be assessed up to 100 percent of wages due, with an additional 15 percent for further delay in compliance. Each employee who does not receive the required notice may recover $50 for each week in which violations continue, and employees who do not receive required pay stubs may recover $100 per week. Penalties may accrue up to $2,500, plus attorneys fees and costs.

Failure to pay minimum wages or overtime compensation may also result in a misdemeanor conviction, with a minimum fine of $500 and a maximum of $20,000.00, or imprisonment up to one year. A second violation within six years may be prosecuted as a felony.

To read a more detailed discussion of the New York Wage Theft Prevention Act and its provisions, please click here.

If you have any questions about the implications of this new legislation for your workplace, please contact: