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Dear Friends,
On December 13, 2010, former New York Governor David
Paterson signed into law the Wage Theft Prevention Act (the
"Act"), which imposes new notification and record keeping
requirements on employers, significantly expands the Department of
Labor's enforcement powers, and increases employers' potential
liability for violations of the Labor Law. The Act goes into effect
on April 9, 2011.
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Written Notice Requirements
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The
Labor Law has long required employers to provide employees with
certain information about their pay, but the Act expands the scope of
this requirement. Under the Act, each employee must be given - at
time of hire and annually on or before February 1 of each year -
written notice of the employee's wage rate, regular pay dates,
overtime rate (if applicable), the basis of the employee's wage rate
(per shift, per hour, salary, etc.), the existence of any minimum
wage allowances (e.g., tip, meal or lodging), the employer's name
(and any d/b/a name), telephone number, and physical and mailing
address. Importantly, the statutory language gives the Agency
significant latitude to add further requirements to the written
notice. The Commissioner of Labor is authorized under the Act to
require an employer to provide any other information that the Agency
deems "material and necessary." At this point, the Agency
has not issued any regulations imposing additional requirements. In
addition, a new written notice must be provided to an employee at
least seven days in advance of any change by an employer, unless the
change is reflected on the employee's paystub. The written notice
must be provided in English "and in the employee's primary
language."
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Wage Statements
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The Labor Law currently requires employers to provide
each employee with a pay stub that includes information relating to
gross wages, deductions, and net wages. The new law requires detailed
information about how the wages were calculated, including any allowances,
the rate and basis of the pay, and the dates of work covered by the
payment. For employees who are eligible for overtime, additional
information must be included on each pay stub, including a statement
of the regular and overtime rate of pay, and the number of hours
worked at each rate. Piece rate workers must be notified on the pay
stub of the applicable piece rate and the number of pieces completed
at the applicable rate.
Please know that Payroll Dynamics has implemented the
necessary changes and your employees' pay stubs reflect this
additional information.
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Expanded Remedies
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There is a significant increase in potential liability
for Labor Law violations under the Act. Employees have the right
under the Act to bring a civil action in court for violations of the
requirements to provide an employee with written notice of wages and
with a compliant pay stub. An employee may recover statutory damages,
attorney's fees and costs in connection with such a claim.
Additionally, the Department of Labor is authorized to bring a civil
or administrative action against an employer and assess penalties of
either $50 or $100 per week (depending on the violation) with no cap
on the penalty amount that may be assessed. Employers and certain
"officers and agents" may additionally face criminal
liability for failing to maintain payroll records. This criminal
liability is extended by the new law to include LLCs and
partnerships. The new law also greatly expands the remedies
available where an employer fails to pay wages and benefits to
employees. Previously, an employee who prevailed in a court action
alleging a failure to pay wages received the total amount of the
underpayment, costs, attorney's fees, and, in some instances,
liquidated damages equal to 25% of the underpayment. Under the new
law, an employee can recover, in addition to the foregoing, prejudgment
interest and liquidated damages equal to the 100% of the total wages
owed.
The Act also permits the Department of Labor to
require an employer who has been found to have violated the law to
post in the workplace (on 8 ½ x 11 inch paper) a notice of the
various violations committed by the employer. Such a posting must be
affixed for up to one year in an area visible to employees.
Additionally, where the Agency determines that an employer willfully
failed to pay wages to an employee, the employer may be required to
post a notice "visible to the general public" regarding the
violations.
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Anti-Retaliation Protection
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Several key changes to the Labor Law's
anti-retaliation protections have been made, such as requiring
"any person" found to have engaged in unlawful retaliation
to pay liquidated damages of up to $10,000, along with costs and
attorney's fees. Additional forms of damages may now be awarded,
including front pay in lieu of reinstatement to employment. An
employee can also pursue a civil action in court to assert unlawful
retaliation. Retaliation is now listed as a class B misdemeanor.
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Compliance
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Payroll Dynamics is working on a service to keep our
clients compliant with the Written Notice Requirements and Written
Acknowledgement aspects of The Act. Currently, NY has not released
its templates for these requirements, but we are monitoring closely in
anticipation of their release. As soon as these templates are
available, we will provide additional information.
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Forms
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The NYDOL prepared six different forms designed
to address the differing wage payment requirements that apply to:
- Hourly rate employees (Form LS 54)
- Multiple
hourly rate employees (Form LS 55)
- Employees
paid a weekly rate or salary
for a
fixed number of hours (Form LS 56)
- Employees
paid a salary for varying hours, day rate, piece rate, flat
rate
or other non-hourly pay (Form LS 57)
- Employees
who receive prevailing wages (Form LS 58)
- Exempt
employees (Form LS 59)
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Message from
the President:
Payroll
Dynamics will continue to monitor these and other Labor
Law changes to provide you with important information that
may affect your business. Our Payroll Specialists are
available to answer any questions that you may have regarding
"The Act" in general; or more specifically, in regard to
calculating rates of pay, overtime rates of pay, or reporting
requirements as amended under Section 195;
Simply
call (631) 435-8700 or email support@payrolldynamics.com.
Michael Tintweiss
Payroll Dynamics, Inc
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