June 20, 2014

Silver, Heastie Announce Passage of Bill to
Strengthen Wage Theft Prevention Act

Measure Provides Additional Protections to Employees Against
Employers Who Refuse to Pay Wages Owed to Workers

Assembly Speaker Sheldon Silver and Labor Committee Chair Carl E. Heastie announced the Assembly approved legislation this week to help employees recover wages that have been withheld by unscrupulous employers. The bill (A.8106-C) would hold employers more accountable for wages owed to their workers through increased penalties and greater enforcement by the state Labor Department.

"My Assembly colleagues and I find it very unsettling that in this day and age some workers are still vulnerable to wage theft," said Silver. "There is nothing more basic than the principle of being paid for your work and our House will not allow this golden rule to be diluted in any way, shape or form. Working men and women are entitled to be paid for their labors. This bill enhances the ability of employees to recover the money they are owed and penalizes employers for stealing the hard earned wages of their workers."

"This legislation makes sure employer's who steal an employee's wages will be held accountable with stiff financial penalties," said Heastie, the bill's sponsor. "This measure is aimed at dishonest employers. It holds them accountable in a way that ensures they cannot avoid penalties and walk off with their worker's hard earned wages. It also helps employees, with the assistance of the state Labor Department, receive the wages they deserve."

The legislation would strengthen the Wage Theft Prevention Act of 2010 by repealing the current law's required Employee Annual Notice requirement, which proved to be a very cumbersome burden to businesses operating in the state, and replaces it with enhanced employee protections and assistance from DOL.

The bill also would increase penalties on employers who fail to provide proper notice of wages and payment to their employees. Under the bill, individuals who violate the act would face fines of $50 to $250 a day for up to $5,000.

The measure also authorizes the Department of Labor (DOL) to impose a greater civil penalty on employers who are repeat offenders and have committed certain violations within the previous six years. It also would mandate that contractors or sub-contractors who committed wage theft to notify all of their employees of the violation to ensure the other workers are on notice that they should be more vigilant about their employer's payment of wages.

Employee protections are enhanced by the bill with the requirement that DOL conduct investigations into employee claims of wages not paid for the full six years of the statute of limitations.

Under the penalty provisions of the legislation, companies that are found to have retaliated against an employee for reporting theft of wages could face penalties of up to $20,000, when the retaliation is a second violation.

The bill addresses the wage evasion tactic of unscrupulous employers who dissolve their companies and then reopen them under a different name. This measure would hold these reconstituted companies fully liable for the same wages owed by the previous company.

To ensure employees are able to recover wages stolen by businesses operating under the Limited Liability Company Law, the bill requires that a company's 10 members, who have the largest percentage of ownership, be personally held liable for all debts, wages or salaries owed to employees.

Another protection in the bill to prevent wage theft would require employers to provide information concerning the number of employees, full or part-time status and work hours to DOL so the agency can track trends and improve oversight of problematic employers. It also directs DOL to establish the Wage Enforcement Account, with the penalty collections from employers who are found in violation of the law, to fund future enforcement activities.