The Wage Theft Prevention Act

To our clients and friends;

On April 9, 2011, the New York State legislature modified section 195 of the Labor Law.  It now requires that an employer notify each employee, in writing, of his salary, and how it is paid.  Employers must also state the regular payday, overtime rate and whether the employer claims any allowances as part of the minimum wage (such as tips, meals or lodging).  Employees must sign the form, and the employer must retain the original signed form for six years.

Who is covered by this law?

Any employer with employees in New York is covered by this law.

When do I need to give the employees this information?

Employers are required to give each employee the written notification on initial hire, whenever there is a change in salary, allowances or payday, and yearly, on or before February 1.

What do I need to do?

The employer will need to give each employee the form and receive a signed copy back.  We recommend giving the form to each employee individually and having him sign it on the spot.  Employee copies can then be given at the end of the day.  Alternatively, have each employee sign two copies and keep one.

What are the record-keeping requirements?

The original signed notices that employees receive must be kept for at least six years.  Employers must also keep complete payroll records, showing how many hours each employee worked (if it is tracked), the rate of pay and how it is calculated (for example, by the hour or by the piece), allowances against minimum wage and deductions.  These records must also be kept for six years.  Records do not need to be kept on-site (or in-state) but they do need to be accessible if requested.

When firing an employee

The law states that upon termination of an employee, the employer is required to give the former employee written notice of a) termination date and b) date of cancellation of employee benefits. This notice, in writing, must be given within five working days of termination.

Where can I get the form?

The Department of Labor has made templates available on its website.  The templates are available in English, Spanish, Chinese and Korean.  If you have employees who have indicated that they have a primary language that is not one of the four listed, then they receive the English form.

Our clients can feel free to contact us for a Word version of the form appropriate for a mail merge.

At the moment, non-standard forms may be used if they convey the same information.  However, the Department of Labor has the right to require the use of its forms, and we recommend doing that in order to avoid potential problems.

What happens if I do not comply?

The penalties for non-compliance can be fairly high.  Failure to give notice can result in fines of $50 per employee per workweek (up to $2,500, plus costs, attorney’s fees and injunctive relief) if a claim is brought by the employee.  If an action is brought by the Commissioner of Labor, there is no cap on damages.

If you have any questions, please do not hesitate to contact us.