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Title Slide Place image here in this top corner Size: 2.58” x 2.58” Position: horizontal 0, vertical 0 The Wage Theft Prevention Act: Advice for New York Employers on Wage-Hour Compliance July 13, 2011 Joseph A. Carello Michael A. Hausknecht
2 Wage Theft Prevention Act Governor David Paterson signed the Wage Theft Prevention Act on December 10, 2010 The Act makes several changes to New York’s Labor Law, which took effect April 9, 2011
3 Wage Theft Prevention Act, cont’d Additional Notification Requirements ›Section of the Labor Law was amended to require employers to formally notify employees hired on or after October 26, 2009, with information regarding their exempt status and pay rates ›The Wage Theft Prevention Act further amended Section 195.1, adding a new requirement that employers provide all employees with such notices at the time of hire as well as on or before February 1 of each subsequent year of employment ›First yearly notices are required by between January 1, 2012 and February 1, 2012
4 Wage Theft Prevention Act, cont’d Additional Notification Requirements ›The notices must contain the information previously required by Section 195 (rates of pay, regular pay day, exempt status) as well as new information, including: – the basis of pay rates (hourly, shift, day, week, salary, piece, commission, or other), – any allowances claimed as part of the minimum wage, and – detailed employer address and contact information.
5 Wage Theft Prevention Act, cont’d Additional Notification Requirements ›The notice must be provided both in English and in the employee’s primary language ›Employers must maintain these notices for 6 years ›An employee who does not receive a new hire or annual notice may bring an action against the employer to recover $50 per week not notified, up to $2,500 (plus costs and attorney’s fees Must be maintained for six years
6 Wage Theft Prevention Act, cont’d Information in Wage Statements ›Section 195 was also amended to require employers to provide employees with pay statements each time employees are paid that specify: – applicable dates that the wages cover, – name of the employee, employer name, address and phone number, – the rate or rates of pay and the basis thereof, – gross deductions, – allowances claimed as part of the minimum wage, and – net wages.
7 Wage Theft Prevention Act, cont’d Information in Wage Statements ›Statements for non-exempt employees also must include the following additional information: – the regular hourly rate or rates of pay, – the overtime rate or rates of pay, – the number of regular hours worked, and – the number of overtime hours worked. Wage statements must be maintained for six years. If an employee is not provided with a wage statement, the employee may bring an action against the employer to recover $100 a week, up to $2,500 (plus costs and attorney’s fees).
8 Wage Theft Prevention Act, cont’d Liquidated Damages for Willful Violations ›Section 198 was amended to increase liquidated damages to up to 100% of the total amount of wages due. ›Current law provides for 25% of the total amount of wages due.
9 Wage Theft Prevention Act, cont’d Additional Anti-Retaliation Penalties ›Section 215 was amended to allow the Commissioner of Labor to order additional remedies in retaliation actions ›The remedies include the ability to specifically enjoin conduct and/or order liquidated damages, reinstatement with back pay, or front pay
10 Wage Theft Prevention Act, cont’d Tolling ›The six-year limitations period for actions brought under the Labor Law is tolled from the date of the employee complaint to the Department of Labor or the date of the Commissioner of Labor’s commencement of an investigation, whichever is earlier.
11 Wage Theft Prevention Act (cont'd) Interpretation Issues ›Track exempt employee time? ›No requirement to identify specific exemption on annual notice ›Notice as part of offer letter ›Notification of changes in pay ›Wage statement detail related to commissions
12 Anatomy of a DOL Audit Employee complaint or random audit Investigator arrives at premises unannounced ›Requests inspection of payroll/timekeeping records ›Conducts employee interviews ›Option of self-audit in certain instances Notice of Violation - preliminary finding of liability District Meeting ALJ Hearing Industrial Board of Appeals Appellate Division/Court of Appeals
13 What to do when the DOL comes knocking Establish a point of contact Ask for the investigator’s name, office, and government identification Ask if there are complaints of legal violations Discuss the scope of the investigation and the investigator’s expectations Contact an attorney
14 What to do when the DOL comes knocking Train supervisors and managers on the pertinent issues so they are prepared for questions Consider interviewing employees prior to the DOL interviews to gain accurate and thorough information
15 Increased Enforcement – New York Increased, more aggressive DOL audits Unwillingness to compromise or negotiate on liability determinations ›Back pay for 6 years ›Liquidated damages ›Threat of double damages (NYLL Sec. 218) plus interest if appeal determination to Industrial Board of Appeals
16 Increased Enforcement – Federal More of the same at the federal level? ›New York Commissioner of Labor, Patricia Smith, confirmed as Solicitor for U.S. Department of Labor ›Smith’s initiatives in NY included – Joint Task Force on Misclassification – NYLL Sec. 195 Amendments
17 Increased Enforcement – Federal U.S. Department of Labor – ›Recently announced hiring of 200 additional investigators ›Notice of Proposed Rulemaking on misclassification
18 Increased Enforcement – Federal (cont’d) Notice of Proposed Rulemaking on misclassification ›Requires employers to: – Perform classification analysis of exempt workers – Provide analysis to employee – Maintain analysis for a period of time Employee Misclassification Prevention Act (S. 3254) ›Essentially a statutory codification of proposed rulemaking
19 Increased Enforcement – Federal (cont’d) “Bridge to Justice” Alliance between DOL and the American Bar Association ›Effective December 13, 2010 ›When complainants are informed that the Wage and Hour Division is declining to pursue their complaints, they will be given a toll-free number to contact a newly created ABA-approved Attorney Referral System ›If investigation was conducted, the complainant/attorney will now be provided information about the agency determination regarding violations at issue and back wages owed ›Special process to allow complainant/attorney to obtain certain data and documents from investigation on expedited basis
20 Thank You! Questions? Follow us on Joseph A. Carello Michael A. Hausknecht