New York State Senate Passes Bill To Amend The State's Wage Theft Law

The New York State Senate passed a bill on June 19 that would amend, if it becomes law, several provisions in the state's landmark 2010 Wage Theft Protection Act. The amendments repeal the annual wage notification employers must provide to employees, and increase the fines for employers for wage payment violations. Supporters of the bill emphasized the paper work reduction benefits for employers.

Specific components of the legislation:

"Section 1 amends Subdivision 1(a) of Section 195 of the Labor Law to strike the annual notice requirement from the Wage Theft Prevention Act when the same information is provided in another manner.

Section 2 amends Subdivisions 1-b and 1-d of Section 198 of the Labor Law to increase penalties for employers' failure to comply with certain sections of the Wage Theft Prevention Act."

So, employers would no longer be required to inform employees each year of pay rates; only new employees. The potential penalties for failing to notify new employees increases from $50 per week with a maximum of $2,000 to $50 per day with a maximum of $5,000, plus costs and attorney's fees. The court may award other payments, too.

The bill also includes provisions for employers that are repeat and/or egregious offenders:

"Section 6 amends Subdivision 1(b) of Section 215 of the Labor Law to authorize the Commissioner to assess a greater civil penalty for those employers who have committed wage theft and had a previous violation within the previous six years...

Section 3 amends Subdivision 1 of Section 218 of the Labor Law if an order directing payment of wages, benefits, wage supplements and liquidated damages is issued to an employer who had previously committed wage theft, or to an employer whose violation is willful or egregious, the employer will be required to report specified employee and wage data to the Commissioner of Labor, which will be published on the Department of Labor's website."

Offenders will often reorganize their business (e.g., declare bankruptcy and shed debt) to avoid paying employees and contractors. So, this section of the bill is important:

"Section 3 also adds a new Subdivision 5 of Section 218 of the Labor Law to provide that an employer similar in operation or ownership to a prior employer who had previously committed wage theft is liable for the acts of the prior employer for the purposes of civil penalties."

The bill would also extend liability to the ten (10) largest owners in limited liability companies (LLCs):

"Section 11 adds new Subdivisions (c) and (d) to the Limited Liability Company Law requiring that the ten members with the largest percentage ownership in a limited liability company be personally liable for all debts, wages, or salaries due and owing to any of its laborers, servants or employees, for services performed by them for such limited liability company... An action to enforce such liability shall be commenced within ninety days after the return of an execution unsatisfied against the limited liability company upon a judgment recovered against it for such services. The bill allows for any member who has paid more than his or her pro rata share to be entitled to contribution pro rata from the other members liable under this section with respect to the excess so paid, over and above his or her pro rata share, and may sue them jointly or severally or any number of them to recover the amount due from them..."

This component appeals since it holds owners accountable, and encourages them not to ignore the actions of the company's executives.

The bill now moves to the Assembly for a vote and/or changes. The law would go into effect 60 days after it is signed by Governor Andrew Cuomo. Learn more about Senate Bill A08106C.