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Are You Prepared for February 1, 2012? What Employers Need to Know

by Felicia Ennis

Wage Theft Prevention Act- Notice Requirements

Earlier this year, we published an alert concerning the passage of New York’s Wage Theft Prevention Act (the “Act”), which became effective on April 9, 2011.  The Act imposes penalties against employers for among other things, an employer’s failure to comply with written wage notice requirements, the underpayment of wages and retaliation against an employee who complains about an employer’s wage violations. 

When the Act first became effective, employers were required to issue a written Notice of Pay Rate to all new hires at the time of hire.  Now, employers must issue a written Notice of Pay Rate to new employees at the time of hire and to all other existing employees by February 1 of each year.  An employer’s obligation to provide written notices to existing employees is now first coming into effect as of February 1, 2012 and employers should ensure compliance with the Act’s requirements to avoid unnecessary civil penalties of up to twenty-five hundred dollars.   The written notice must be provided in English or the primary language of the employee and a receipt of this notice must be maintained by the employer for six years.   

The New York State Commissioner of Labor has provided notice templates in English and other languages.  You must select the correct template for each employee, depending upon such factors including whether they are a salaried or hourly employee, or whether they work a fixed or fluctuating workweek.  Employers must also include the employee’s overtime rate on the notice, which is usually calculated at 1 ½ times the worker’s regular rate of pay.  Employers should be aware that state and federal overtime requirements apply to most workers with few exceptions.  Non-exempt workers who are paid a salary are still entitled to receive overtime. 

Penalties for Wage Payment Violations

Both civil and criminal penalties may be imposed against an employer who fails to pay wages in accordance with the requirements of the Act.  Employers, including the officers and agents of any corporation, partnership or limited liability company, who knowingly fail to pay employees in accordance with the Act can be guilty of a misdemeanor for first time offenders and if convicted, can face fines of up to twenty thousand dollars or imprisoned for up to one year.  A second offense occurring within six years of the first is a felony, and if convicted, the violator is subject to fines of up to twenty thousand dollars or imprisoned for up to one year and one day, or both, for each offense.

To avoid non-compliance with the Act as well as other applicable federal and state wage requirements, employers should carefully review their existing wage policies and procedures.

Leave Policies and Termination of Employment

The Act also requires employers to notify employees in writing or by publicly posting the employer’s policy on sick leave, vacation, personal leave, holidays and hours if applicable.  Terminated employees must be notified in writing within five working days of their termination, of the exact date of their termination and the cancellation of any employee benefits with such termination. 

While most employers include written leave policies in their employee handbooks, now is a good time to review and update your handbook to ensure compliance with the Act’s requirements, as well as compliance with other applicable laws.      

New York employers should familiarize themselves with the Act’s requirements to ensure compliance by February 1, 2012.  Employers should review existing hiring, payroll and recordkeeping practices to avoid the significant penalties that can result from non-compliance.  As always, please feel free to contact Robinson Brog’s Labor and Employment Group with any questions.