New York employers have another reason to ensure that all employees are properly paid: the risk of criminal prosecution. On September 6, 2023, New York Governor Kathy Hochul signed an amendment to the New York Penal Law which makes wage theft a form of criminal larceny. According to the New York Penal Law, "[a] person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof." N.Y. Penal Law § 155.05(1). The amendment now defines "property" to include "compensation for labor or services" and adds "wage theft" as a means to commit larceny.
The amended law describes the crime of larceny by wage theft as follows: "A person obtains property by wage theft when he or she hires a person to perform services[,] the person performs such services and the person does not pay wages . . . to said person for work performed." While wage theft was already considered conduct subject to criminal penalties under the New York Labor Law, the amended law is aimed at increasing criminal penalties for wage theft. One way in which the amended law achieves this aim is by permitting prosecutors to aggregate an employer's nonpayments or underpayments of wages from a workforce into one prosecution, even if the nonpayments or underpayments occurred in multiple counties.
The amended law represents the latest effort to crack down on New York employers violating the wage and hour laws. In February 2023, Manhattan District Attorney Alvin L. Bragg, Jr., announced the creation of his office's Worker Protection Unit "to investigate and prosecute wage theft and other forms of worker harassment and exploitation across Manhattan's many industries." At that time, District Attorney Bragg also announced his support for amending the criminal law to enable prosecutors to charge wage theft as larceny, which has now come to fruition.
The amended law takes effect immediately. New York employers should review their pay policies and practices in light of the amendment to ensure they are in compliance with their obligations under the wage and hour laws, including by taking the following actions:
- Review wage notice and wage statement requirements to ensure compliance with the Wage Theft Prevention Act;
- Promptly respond to employee requests for wage information;
- Ensure employees (and independent contractors) are properly classified under the Fair Labor Standards Act and New York Labor Law; and
- Audit payroll processes generally.