NEW YORK WAGE THEFT PREVENTION ACT

Transcription

1 NEW YORK WAGE THEFT PREVENTION ACT NJCCA September 21, 2012 Christopher J. Joyce, Esq., General Counsel, Aveta, Inc. Andrew M. Moskowitz, Esq., Pashman Stein Maxiel L. Gomez, Esq., Pashman Stein

2 INTRODUCTION The New York Wage Theft Prevention Act ( WTPA ) was a law passed in 2010 and went into effect on April 9, 2011 WTPA amends Section 195 of the New York Labor Law Imposes new notice of wage rate requirements and expands the civil and criminal penalties

3 ENHANCED AUTHORITY The Act gives Commissioner of Labor new powers. Permits Commissioner to: Require employer that defaults to provide accounting of all assets and post bond Institute administrative action (as opposed to civil action) to collect penalties.

4 WHO IS COVERED? All private sector employers in New York including not-for-profit corporations All employees including professionals, executives or administrators Not covered - Employees who work in other states or public entities

5 REQUIREMENTS Yearly pay notices Proper Wage statements Free from retaliation for possible violations of the Labor Law

6 WHEN IS NOTICED REQUIRED? Notices are required at the time of hire and 7 days in advance of any changes in the information provided on the pay notices Notices are to be issued to existing employees yearly no later than February 1 If seasonal business or worker is laid off, as soon as workers returns Notices must be issued yearly even when there is no change in pay

7 NOTICES (Cont.) Notices may be included in offers letters or employment agreements but must be on its own form (i.e., separate page) Notices can be issued electronically (with acknowledgement of receipt) Notice provided at the time of hire must be within 10 business days Records must be preserved for six years

8 CONTENT OF NOTICE The employer s name and any doing business as names used by the employer The physical address of employer s main office and mailing address if different Employer s telephone number The employee s overtime rate of pay, if subject to OT (employer may, but is not required to, inform of applicable exemption)

9 CONTENT OF NOTICE The basis of the employee s rate of pay (i.e., by the hour, shift, day, week, salary, piece, commission or other) Whether the employer will claim any allowances as part of the minimum wage (i.e., tips, meal, lodging) against the minimum wage

10 CONTENT OF NOTICE Employer s regular pay day, designated by frequency of pay requirements as set forth by Section 191 of the New York State Labor Law

11 NOTICE REQUIREMENT Employers are required to retain written acknowledgment of employees receipt of each notice. Must be signed and dated In English and employee s primary language Contain affirmation that employee accurately identified his or her primary language and that the notice was given in that language

12 NOTIFICATION FORMS Sample Notices and Acknowledgment forms can be found on the New York Department of Labor s website,

13 WAGE STATEMENT CONTENT Employer s name, address, and phone number Dates of work covered by that payment of wages Employee s rate of pay and the basis thereof

14 WAGE STATEMENT CONTENT Whether the employee is being paid by hour, shift, day, week, salary, piece, commission, or otherwise Allowances, if any, that the employer claimed as part of the minimum wage Employee s gross wages Deductions from such wages Employee s net wages.

15 WAGE STATEMENT CONTENT Statements for non-exempt employees must also include the employee s overtime pay rate and the number of regular and overtime hours worked

16 WAGE STATEMENT HOW AND WHEN A wage statement must be provided with each payment of wages Can be electronic if worker can access statement on computer and printer provided by the employer

17 WAGE STATEMENT RETENTION Employers required to maintain payroll records for each employee for each week worked with the above information Employers must keep the records on an ongoing basis and may not make up the records retroactively

18 WAGE STATEMENT RETENTION Records must be maintained for six years Increases from the prior three-year requirement

19 PENALTY WAGE STATEMENT $ per week per worker if proper wage statements are not given Damages capped at $2, per worker

20 PAYDAY Manual workers must be paid on a weekly basis Clerical and other workers must be paid not less than semi-monthly Commission salespersons must be paid no less than once a month

21 PAYDAY Employees in bona fide executive, administrative or professional capacity whose earnings are in excess of $900 a week must be paid according to the terms of their employment contract.

22 OVERTIME RATE Most employees must receive overtime pay at 1.5 times their regular rates of pay for all hours worked over 40 in a workweek For the occupations exempt under the FLSA, the NYLL requires the employees be paid at least 1.5 times the minimum hourly rate for their overtime hours

23 PENALTIES - NOTICES Employee may recover $50 for each work week during which the violation occurred Maximum of $2,500 together with attorneys fees and costs. Courts may issue injunctive and declaratory relief.

24 PENALTIES NOTICES Cont. The Dept. of Labor may also bring a civil or administrative action on the employee s behalf. Damages can be assessed at $50 for each work week that violation occurs, as well as other remedies and penalties otherwise available

25 PENALTIES NOTICES (Cont.) Civil penalty not to exceed $1,000 for fist violation, $2,000 for a second violation; $3,000 for the third violation and there is no maximum penalty for subsequent violations. Judgments not satisfied within 90 days of final order will carry 15% penalty. DOL may also require employer to post notice in area visible to all employees

26 AFFIRMATIVE DEFENSES - NOTICE Complete and timely payment of wages due to employees who did not receive proper notice; and Employer reasonably believed in good faith that it was not required to comply with NYLL notice requirements.

27 RETALIATION PROVISION Employee in good faith believes employer violated provision of the NYLL and complains; Actual violation not required; Threats considered retaliation;

28 RETALIATION (Cont.) Includes complaints made to or providing information to DOL, Attorney General or employer. 2 year statute of limitation tolled if employee files complaint with the labor commissioner. Tolls from date complaint is made or investigation commenced, whichever is earlier.

29 RETALIATION (Cont.) Tolling stops on date on which order to comply becomes final or date complainant is notified that the investigation has concluded whichever is later.

30 DAMAGES/PENALTIES Reinstatement, back pay and front pay Employers or their agents can be fined up to $10,000 plus another $10,000 in liquidated damages Potential criminal penalties

31 RETALIATION PENALTIES Misdemeanor criminal liability applies to any other person in addition to employers and their agents, officers and agents of corporations, LLC and partnerships

32 VIOLATIONS FOR UNPAID WAGES All unpaid wages due Interest at rate set by banking law (as high as 16%) Plaintiff s attorneys fees; and Liquidated damages of up to 100% of total wages due, if violation was willful (no good faith or reasonable basis for employer conduct)

33 CASE LAW Ji v. Belle World Beauty, Inc. (N.Y.Sup. Ct. NY Cnty, August 24, 2011) Plaintiffs nail technicians alleging paid fixed wage regardless of hours worked, no breaks or overtime compensation. Terminated after complaining to management. Last worked in 2007, sought to have WTPA apply retroactively. Justice Jane Solomon found WTPA to be a remedial statute and permitted plaintiffs to amend complaint to seek liquidated damages of 100% of unpaid wages prior to April 9, 2011, rather than 25%.

34 CASE LAW Wicaksono v. XYZ 48 Corp., 10 Civ (S.D.N.Y. 2011) Four former servers of a New York City sushi restaurant sued for wage and hour violations under FLSA and NYLL Court held with respect to state law claim, enhanced liquidated damages of WPTA should not be applied retroactively Plaintiff more likely to file claims in state court where claims are applied retroactively Failure to appear and default judgment found to be willful violation

35 CASE LAW Benavidez v. Plaza Mexico Inc., 09 Civ. 5076, 2012 U.S. Dist. LEXIS 19206, 2012 WL (S.D.N.Y. Feb. 15, 2012) Rejected reasoning in Ji v. Belle World Beauty and followed Wicaksono WTPA not applied retroactively.

36 EMPLOYEE MISCLASSIFICATION Heightened government enforcement US DOL 2013 budget US DOL and IRS sign Memo of Understanding Employee Misclassification Prevention Act

37 EMPLOYEE MISCLASSIFICATION Christopher v. Smith Kline Beecham Corp. US Supreme Court on whether pharmaceutical sales representatives are exempt no overtime Wal-Mart violation over Vision Center Managers result in $5 million in penalties, damages and back wages

38 EMPLOYEE MISCLASSIFICATION Pippins, et al. v. KPMG LLP, Case No. 11 Civ (S.D.N.Y.) Class cert granted for Audit Associates NJDOL adopts federal white collar exemptions

39 CORPORATE BEST PRACTICES Examples Self-audit of payroll records Re-examine Exempt v. Non-Exempt Status

40 THANK YOU Pashman Stein, P.C. 21 Main Street, Suite 100 Hackensack, New Jersey