Law Increases Penalties Against Employers In New York Which Don’t Pay Overtime Pay, Minimum Wage, Or Other Wages

On December 14, 2010, New York State Governor David Paterson signed into law the Wage Theft Protection Act, A. 11726/S. 8380 (the "Act").   The Act substantially increases civil and criminal penalties against employers which break New York's overtime pay laws, minimum wage laws, or other wage payment laws.

This author's March 2010 post on the (then-pending) Wage Theft Prevention Act is linked here.  The Act takes effect on April 12, 2011.

The Wage Theft Prevention Act, as passed by the New York State Senate, is linked here.   For the New York State Assembly's identical version of the Act, see here.

Among other changes to current law, the Wage Theft Protection Act raises the monetary damages recoverable in particular types of lawsuits by employees or by the New York State Commissioner of Labor (the "Commissioner of Labor" or the "Commissioner") against firms which violate New York State's overtime pay laws, minimum wage laws, or other wage payment laws.  Moreover, the Act increases criminal punishments for violations by employers of New York's minimum wage statutes for which, to date, the courts have imposed less severe criminal penalties.

With respect to civil lawsuits against employers, the Wage Theft Protection Act amends the New York Labor Law by, among other revisions:

  • In any successful action by an employee against his employer for failing to pay overtime compensation or other wages, increasing, from 25% of the total underpayment of wages to 100% of the total underpayment of wages, the liquidated damages to be awarded to the employee unless the employer proves a good faith basis for believing that its underpayment of wages was in compliance with the law;
  • Rendering individually liable a company's representatives who fire, threaten, penalize, or otherwise discriminate against a worker  in retaliation for the worker complaining that the company broke overtime pay laws, minimum wage laws, or other wage payment laws, even if the company's representatives are neither officers nor agents of the company.  This expansion of individual liability encompasses, for example, a company's low-level managers who retaliate against a complaining employee.
  • Specifying that, to give rise to a civil claim by a worker against his employer for discharge in retaliation for the worker complaining that the employer broke overtime pay laws, minimum wage laws, or other wage payment laws, the worker need not complain to the employer about an actual violation of wage payment laws.  Rather, the employee need only complain to the employer about conduct that the employee "reasonably and in good faith[] believes" violates wage payment laws.  So no company can fire an employee for complaining to the company about what he or she reasonably believed to be a violation of overtime pay statutes, minimum wage statutes, or other wage payment statutes, even if the employee's belief turns out to be wrong.
  • Specifying that, for an employee's complaint (about the employer's failure to pay wages) to be conduct protected by the New York Labor Law's anti-retaliation provision, the employee need not cite the section of the Labor Law that the employer broke; and
  • Requiring the Commissioner of Labor, whenever the Commissioner determines after an investigation that an employer did not pay a worker the minimum wage, the requisite amount of overtime compensation, or other wages, to assess against the employer the full amount of the underpayment and liquidated damages equal to 100% of the amount of the underpayment.

As to criminal cases against employers or against employers' officers or agents, the Wage Theft Protection Act amends the New York Labor Law by, among other changes,

  • Providing that an employer which, or an officer or agent of a company who, is convicted of the class B misdemeanor of paying or agreeing to pay an employee less than the minimum wage will be punished either by a criminal fine of $500 to $20,000 or by a jail term of up to one year; and
  • Within six years after the offender has been convicted of "a prior offense," rendering it a felony, punishable by a criminal fine of $500 to $20,000, by imprisonment for up to one year and one day, or by both such fine and imprisonment, for an employer to, or for a company's officer or agent to, pay or agree to pay an employee less than the minimum wage.

New York is one of several states or counties which, in 2010, established or increased penalties against employers which fail to pay overtime pay, minimum wage, or other wages.  Among the other jurisdictions which enacted such laws this year are Illinois; Maryland; Nebraska; Washington State; and Miami-Dade County, Florida.

Call the Law Offices of David S. Rich, LLC at (212) 209-3972 to consult with a knowledgeable labor and employment attorney about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime lawyer to defend your company in overtime pay lawsuits or other wage and hour litigation.

For additional insights about Business Litigation, Employment and Securities Related Legal Issues in New York visit David S. Rich’s New York Business Litigation and Employment Attorneys Blog.