The New York Wage Theft Prevention Act goes into effect on April 9, 2011.
The WTPA amends several sections of the New York Labor Law to require employers to give increased written notice of various aspects of compensation to all employees (including those exempt from the state minimum wage and overtime laws). The law also provides employees with several new causes of action against their employers. Secondary literature from plaintiffs’ and defense firms alike forecast the need for employers (including law firms themselves) to prepare for the new requirements and possible litigation.
The WTPA requires: (1) employers to provide written notice to all employees of sixteen aspects of compensation on regular wage statements accompanying each pay stub starting April 9, 2011; (2) employers to provide written notice to all new hires of eleven aspects of compensation hired after April 9, 2011; (3) employers to provide annual written notice to all employees of eleven aspects of compensation on or before February 1st of each year starting in 2012; (4) employers to provide any current employees with written notice where there is "a change in the terms and conditions of employment related to the various statutory elements…e.g. a change in rate of pay, allowances, pay date," seven days before such change; (5) that employees acknowledge in writing that they received the new hire and/or annual notification in their primary language and/or English; (6) that employers post information regarding leave time, vacation policies, and hours; and (7) that employers keep all records for six years. The law also expands anti-retaliation provisions and greatly increases civil and criminal penalties for employers in breach.
Although compliance with the new law may seem daunting and the increased penalties draconian, the WTPA is the product of the increasing instances of wage and hour disputes in New York courts. There is an entire legal practice area dedicated to wage and hour issues where all parties would save much time and expense if better records were kept by employers and employees alike. Some defense firms in recent postings have insinuated that the law taxes honest employers while not doing enough to prevent dishonest employers from illegally paying or withholding wages from employees. Appropriately, some plaintiffs’ firms have noted that although the law itself expands the Commissioner of Labor’s authority in the field, authority without enforcement may ring hollow.
I predict that the protections of the WTPA will empower employees to approach their employers more often with concerns regarding their pay. In turn, honest and earnest employers will be able to develop productive dialogue with their employees concerning the terms and conditions of their employment. The thrust of the law is to increase disclosure and as the old adage attests: sunlight is the best disinfectant. This increased dialogue between employees and employers may also reduce the likelihood that disgruntled employees will turn to lawyers and lawsuits all-too-quickly to resolve conflict.
We live in a moment when employers scrutinize transaction costs and employment rosters of businesses more so than ever before. Counterbalancing these concerns is the possibility that even the lowliest entry-level employee has a loudspeaker to the world via social media regarding every last grievance of their job and life. The WTPA stands for the proposition that there is an imperative for the lines of communication between employers and employees to be kept open and used often. Although the law itself will require employers to spend more time and money in the preparation and organization of wage information and to exert more effort responding to employees’ concerns, there will be increased productivity by employees and increased savings by employers in the long-run.
The attached memo describes the law's content and effects.
The New York Department of Labor has issued model forms and an FAQ to assist with compliance and can be found at http://www.labor.ny.gov/workerprotection/laborstandards/workprot/lshmpg.shtm
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