Recently the governor signed Senate Bill S2766C into law. This bill amends the labor law and the general business law to amend existing wage theft laws, and only applies to the construction industry.
Still, it’s an excellent prompt to go over what New York’s stance on wage theft is, and what you as a business owner need to be aware of and responsible for.
Existing Wage Theft Laws
Employers must give each employee a wage statement or pay stub each payday that lists the payment and the dates covered by the payment. Employees must also be provided with a written explanation of how wages were computed upon request. Employers that don’t give wage statements have to pay damages of up to $250 per day per employee unless they paid employees all wages required by law.
Employers must also keep payroll records for six years, with information on hours worked, rates of pay, how the employee is paid, the employee’s gross and net wages, itemized deductions, and itemized allowances and credits claimed by the employers.
Employers must give employees written notice of their wage rates at the time of hire. If any data in the notice changes, the employer must tell employees at least a week before it happens unless they issue a new paystub that carries the notice. Failing to give notice means paying damages of up to $50 per day, per employee, unless you paid your employee all wages required by law.
Being found guilty of wage theft carries significant penalties. The New York State Department of Labor may post a summary of violations in a place where the public can see it for up to 90 days. Failing to pay means being on the hook for damages of up to 100% of the unpaid wages, along with civil penalties. The Labor Commissioner can issue an Order to Comply to see wages paid, and the Department of Labor may add 15% in damages to a judgment if the employer fails to pay in full.
There are also penalties against employers who are found to have retaliated against an employee who commits wage theft.
According to the new law if subcontractors in the construction industry don’t pay their employee’s wages then the primary contractor will be responsible for doing so. Primary contractors may seek to recover those wages from subcontractors when they pay them on the subcontractor’s behalf.
Remedies for failures to pay wages are civil or administrative, not criminal, and contractor liability is limited to three years from the date of the claim. The subcontractor has a 6-year limitation period.
If you are working in the construction industry then we recommend getting certified payroll records from any subcontractors you work with, as a condition of working with them. You might wish to add the provision of these records into your contracts.
It might also be wise to update your insurance policies to account for these new risks.
The law applies to all new, renewed, modified, and amended contracts, and the liability cannot be waived except through a bona fide collective bargaining agreement that specifically references NYLL §198-e.
What to Do if Your Company is Accused of Wage Theft
Your only smart move is to go to an NYC Business Litigation Lawyer. Reach out to our office so we can begin doing damage control right away. It is possible to defend a wage theft suit, but only if you take the right steps from nearly the moment you are accused.
Submit this form to have your case reviewed by our attorney.
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SCOTT B. RICHMAN, ESQ.
Mr. Richman is the Managing Member and Founder of Richman Law Firm PLLC. In his role as Managing Member, Mr. Richman oversees the day-to-day operations of the firm and handles the litigation of the most complex legal matters across a vast array of practice areas and disciplines.