Employment Law Alert : Gibbons P.C.: Labor Relations, Employment Contracts, Employee Benefits, & Wrongful Discharge Lawyers & Attorneys

Employers have the discretion whether to offer or allow for one of the newly permissible deductions. If employers choose to do so, they must provide employees with written notice of the terms and conditions as well as an explanation as to how the deduction will be made. In turn, employees must affirm and authorize in writing the specific deduction, which employers must keep on file for six years. Except for deductions authorized by a collective bargaining agreement, the employee may revoke authorization for a particular deduction at “any time” and the deductions must cease “as soon as practicable.”

Given this development, now is a good time for employers with operations in New York to communicate with experienced wage and hour counsel regarding strategies to avoid wage and hour litigation. If you have any questions, please feel free to contact any of the attorneys in the Gibbons Employment & Labor Law Department.

Peter J. Dugan is an Associate in the Gibbons Employment & Labor Law Department.

The above disclosures must be given in English as well as the employees native language (if the NYDOL has provided a notice template in the employee’s primary language, with Spanish, Chinese, Korean, Creole, Polish, and Russian versions supposedly being made available soon on the NYDOL's website). Moreover, the WTPA requires that employers get signed acknowledgments from employees that verify the above disclosures.

To assist New York employers with compliance, the NYDOL has issued the following materials:

• Frequently Asked Questions (“FAQs”) about the Wage Theft Prevention Act
• Guidelines for Written Notice of Pay Rates and Regular Pay Day
• Instructions: Model Notice of Rates of Pay and Pay Days
• Model Pay Notice for Hourly Rate Employees
• Model Pay Notice for Multiple Hourly Rates
• Model Pay Notice for Employees Paid a Weekly Rate or Salary for a fixed number of hours (40 or fewer in a week)
• Model Pay Notice for Employees Paid a Salary for Varying Hours, Day Rate, Piece Rate, Flat Rate or Other Non-Hourly Pay
• Model Pay Notice for Prevailing Rate and Other Jobs
• Model Pay Notice for Exempt Employees

Based on the information released by the NYDOL, we wanted to bring the following WTPA-related items to your attention:

• Employers are not required to use the above-linked template forms. Employers can develop their own pay notices so long as they comply with the WTPA. Moreover, the NYDOL has specified that the notice obligations can be included in a letter and/or employment agreement; however, it must be on its own form. In other words, the NYDOL seems to be directing that the notice obligations appear on a separate page or pages from the rest of the agreement, such as in an appendix.
• The pay notice can be distributed electronically, but there must be a system in place where the employee can acknowledge the receipt of the notice as well as print copies.
• The NYDOL has specified that: (i) new-hire notices must be provided to employees hired on or after April 9, 2011 before they perform any work; and (ii) annual notices must be provided to all employees between January 1 and February 1 beginning in 2012. The WTPA’s annual notice requirement will not be satisfied if notice is given at any other time.
• Under the WTPA, employers are required to keep copies of the notices and acknowledgments for six years and must be able to provide them to the NYDOL upon request.
• If an employee refuses to acknowledge the notice, the NYDOL has instructed employers to still provide the notice and to note the employee’s refusal to sign.

In addition to the above notice requirements, the WTPA requires employers to provide certain information in writing along with each payment of wages. Specifically, the dates of work covered, the employer’s name, address and phone number, the employee’s rates of pay and basis thereof (e.g., hour, shift, day, week, salary, piece, commission, etc.), gross wages, deductions, net wages, and allowances claimed against the minimum wage (e.g., tip, meal, lodging), overtime rates, and the number of regular and overtime hours worked.

The NYDOL has indicated that employers can provide these pay statements electronically if the employee can access the statements on a computer provided by the employer and print a copy for their records. The NYDOL has indicated that it will at some point issue a sample pay statement that demonstrates the necessary entries.

Given that the WTPA became effective last month, now is a good time for employers to communicate with experienced wage and hour counsel regarding compliance strategies. If you have any questions, please feel free to contact any of the attorneys in the Gibbons Employment Law Department.

Peter J. Dugan is an Associate in the Gibbons Employment Law Department.

Employers must provide this information at the time of hire as well as on or before February 1 in each year thereafter. The above disclosures must be in English as well as the employee’s self-identified primary language. Moreover, employers are required by the WTPA to obtain signed acknowledgments from employees, verifying that the notifications were made. Employers who fail to comply may face legal actions and be subject to monetary damages, injunctive relief, as well as paying reasonable attorneys’ fees and costs.

Pay Statement Obligations

Under the WTPA, New York employers must now provide written statements along with each payment of wages. The statements must include the dates of work covered, the employer’s name, address, phone number, rates of pay and basis thereof (e.g., hour, shift, day, week, salary, piece, commission, etc.), gross wages, deductions, net wages, and allowances claimed against the minimum wage (e.g., tip, meal, or lodging allowances). For nonexempt employees, the statement must also include the regular hourly rates of pay, overtime rates of pay, and the number of regular and overtime hours worked. In addition, upon the request of an employee, the employer must now furnish an explanation in writing as to how specific wages were computed. These compliance obligations extend beyond the recordkeeping requirements imposed on employers under federal law. New York employers who fail to comply with these new obligations may face legal actions and may be subject to monetary damages, injunctive relief, as well as paying reasonable attorneys’ fees and costs.

Recordkeeping Obligations

Under the WTPA, employers are now required to keep wage-related records for 6 years. For each week, employers must maintain contemporaneous, true, and accurate payroll records showing hours worked, rates of pay and basis thereof (e.g., hourly, salary, shift, day, piece, commission, etc.), gross wages, deductions, net wages, and allowances claimed against the minimum wage (e.g., tip, meal, lodging allowances) for each employee. The records for nonexempt employees must also indicate regular hourly rate of pay and overtime rate of pay as well as the total number of regular and overtime hours worked.

Expanded Remedies

The WTPA increases the scope of available remedies for wage and hour violations.

• Liquidated Damages: Unless they can prove a good faith basis for believing they were in compliance, New York employers who fail to pay wages (e.g., minimum wages, overtime wages) are liable for the total amount of unpaid wages, costs, attorneys’ fees and liquidated damages. Liquidated damages presently are calculated to equal 25% of the total amount of wages due. The WTPA quadruples the amount to equal 100% of the wages due. On its face, this increase appears to mirror the liquidated damages available under the federal Fair Labor Standards Act (“FLSA”). However, employers should be mindful that the statute of limitations for violations of the New York Labor Law is 6 years (currently the longest of any state wage law), whereas the FLSA statute of limitations is at most three years. Additionally, employers must be mindful that at least some courts have found that liquidated damages under the FLSA and the New York Labor Law do not offset one another and may be recovered simultaneously.
• Workplace Postings: The WTPA empowers the Commissioner of Labor to post a notice (for up to 1 year) in an area visible to employees and which summarizes the employer’s violation. If the violation is willful, the Commissioner may post the notice (for up to 90 days) in an area that is visible to the public.
• Criminal Penalties: Under the New York Labor Law, employers that fail to pay the minimum wage or overtime compensation may be found guilty of a misdemeanor, and therefore fined up to $20,000 dollars or imprisoned for up to one year. If a second violation and conviction occurs within 6 years, the employer will be guilty of a felony. The WTPA expands these criminal penalties to partnerships and limited liability companies.
• Attorneys’ Fees: The WTPA eliminates the potential for judicial discretion by directing the courts to award “all” reasonable attorneys’ fees as well a prejudgment interest in cases involving the underpayment of wages.

Anti-Retaliation

The WTPA grants anti-retaliation protection to employees who “reasonably and in good faith believe” that a violation of the Labor Law or Order of the Commissioner has occurred. Accordingly, we foresee this vague standard leading to an uptick in employees alleging retaliation claims. If successful, these employees will entitled to injunctive relief, liquidated damages of up to $10,000, back pay, and reinstatement. The WTPA also provides for an award of front pay in lieu of reinstatement. Unlawful retaliation is now deemed a class B misdemeanor.

Conclusion

In sum, the WTPA changes the way New York employers, large and small, will need to conduct business and keep records. The myriad of wage and hour laws was already complicated and is becoming more so. The cost to employers of non-compliance — regardless of whether from ignorance, misunderstanding, or willfulness — is getting even costlier. Accordingly, now is a good time for employers to communicate with experienced wage and hour counsel regarding compliance strategies.

Peter J. Dugan is an Associate in the Gibbons Employment Law Department.