NEW YORK ENACTS NEW WAGE PAYMENT

NOTIFICATION & RECORDKEEPING REQUIREMENTS

Shortly prior to the end of his term as Governor, David Paterson signed into law the New York
State Wage Theft Prevention Act (“WTPA”). The WTPA, which is effective April 12, 2011, imposes
on employers new administrative and recordkeeping requirements related to the payment of wages and
sharply increases penalties for failure to comply with the New York Labor Law.

New Hire & Yearly Wage Notification Requirements

New York Labor Law Section 195(1) currently requires employers to notify all new hires in
writing of their pay rate(s), regular pay day, and overtime pay rate. The WTPA expands the scope of
information that must be included in these notifications, which must now also be given to all
employees on a yearly basis.

As amended by the WTPA, Section 195 will require employers to provide employees, both at
the time of hire and on or before February 1 of each year after the effective date (April 12, 2011),
written notification (in English and in the language identified by each employee as his or her primary
language, provided the New York State Department of Labor (“NY DOL”) has prepared a template
notice in such language) which must include:

¾ rate(s) of pay;
¾ whether paid by hour, shift, day, week, salary, piece, commission, or other;
¾ allowances, if any, claimed as part of the minimum wage, including tip, meal, or
lodging allowances;
¾ regular pay day designated by the employer;
¾ name of the employer and any “doing business” names used by the employer;
¾ physical address of the employer’s main office or principal place of business, and a
mailing address if different;
¾ telephone number of the employer; and
¾ for non-exempt employees, their regular and overtime rates of pay (the NY DOL has
taken the position that employers must also provide exempt employees with the specific
basis for their exemption).

The WTPA instructs the Commissioner of Labor to prepare templates that comply with these
requirements for employers to use. Although the templates are not currently available, we anticipate
that they will be posted on the NY DOL’s website when ready.

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This Employment Note, which may constitute attorney advertising, is for educational purposes only and should not be
construed as legal advice in any jurisdiction.
© 2011 Tannenbaum Helpern Syracuse & Hirschtritt LLP
 If any of the required wage information in the notice changes, written notice of such change
must be provided at least seven days prior to the time of such change (unless the changes are reflected
on the wage statement furnished, as described below). Among other things, the WTPA also provides
that each time such a notice is provided to an employee the employer will be required to obtain from
the employee a signed and dated acknowledgement in English and in the primary language of the
employee of receipt of the notice, which the employer must preserve and maintain for six years. Of
course, employers should take care to not single out or discriminate against any particular protected
class of employees when inquiring about their primary language.

Potential Waivers for Staffing Firms

Because implementation of certain aspects of the WTPA will be particularly burdensome for
employers in the staffing industry, the WTPA grants the Commissioner of Labor the discretion to
waiver or alter the wage notification requirements for temporary help firms. The NY DOL has not yet
provided any guidance concerning the scope of any such waivers or exemptions. We anticipate
providing an additional update for staffing firms.

Detailed Wage Statements

The WTPA also increases the volume of information employers must provide to employees on
paycheck stubs. Specifically, the WTPA requires that employers furnish a statement with every
payment of wages listing: the dates of work covered by that payment; the names of the employee and
employer; the address and phone number of the employer; the rate(s) of pay and the basis thereof, i.e.,
whether paid by the hour, shift, day, week, salary, piece, commission, or other; gross wages;
deductions; allowances, if any, claimed as part of the minimum wage; net wages; for non-exempt
employees, the regular hourly rate(s) of pay, overtime rate(s) of pay, the number of regular hours
worked, and the number of overtime hours worked; and for piece-rate workers, the applicable piece
rate(s) and number of pieces completed at each rate.

New Recordkeeping Requirements

Section 195 has also been amended to provide that employers maintain the required detailed
wage payment records for six years, which is consistent with existing NY DOL regulations.

Increased Penalties

The WTPA adds and increases penalties for failing to comply with the Labor Law, including the
new wage notification requirements. Among other things, the WTPA amends the Labor Law to
provide for the following:

¾ Liquidated damages to each employee of up to 100% of wages due for failing to pay wages,
unless the employer can prove that it possessed a good faith basis that its payment of wages
was in compliance with the law. Formerly liquidated damages were capped at 25%.
Attorneys’ fees and interest are also available.

¾ New penalties for failing to give the required wage payment notices. For instance, if any
employee is not provided the notice within ten business days of his or her first day of

© 2011 Tannenbaum Helpern Syracuse & Hirschtritt LLP

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 employment, he or she may recover $50 for each work week that the violations occurred or
continue to occur, up to $2,500, together with costs and attorneys’ fees.

¾ Damages to each employee of $100 for each work week that an employer fails to provide the
proper wage statements, up to $2,500, together with costs and reasonable attorneys’ fees.

¾ Criminal liability under certain circumstances for officers and agents of a corporation,
partnership, or limited liability company for failing to pay wages or keep records in accordance
with the law or for engaging in unlawful retaliation (formerly, only the officers and agents of
corporations were covered).

¾ Sharply increased penalties for and broadened protections against retaliation of employees who
make good faith wage complaints.

¾ Where an employer is found to have violated certain provisions of the Labor Law, such as the
payment of wages, the employer will be required to post a workplace notice, for up to a year,
summarizing the violations and other pertinent information (other public posting requirements
apply to willful violations).

Conclusion

The WTPA raises the stakes for employers who are noncompliant with, or ignorant about, their
obligations under the Labor Law. As a result – and considering the recent wave of wage and hour
lawsuits – now may be an appropriate time for all employers to conduct a review of their wage
payment and recordkeeping policies.

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If you have any questions concerning the Wage Theft Prevention Act or other issues of
employment law, please contact any of the following attorneys in our Employment Law Group, or
other attorney at THSH with whom you work:

Joel A. Klarreich Andrew W. Singer Stacey A. Usiak Jason B. Klimpl

(212) 508-6747 (212) 508-6723 (212) 702-3158 (212) 508-7529
jak@thsh.com singer@thsh.com usiak@thsh.com klimpl@thsh.com

February 2011

© 2011 Tannenbaum Helpern Syracuse & Hirschtritt LLP

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