Brooklyn, NY – State Senator Andrew Gounardes and Assemblymember Jo Anne Simon announced yesterday that Governor Andrew Cuomo has signed S858/A1893 the “No Wage Theft Loophole Act”, a bill which closes a judicially-created loophole in the Labor Law that often denies New Yorkers vital protections, making it easier for the victims of wage theft to pursue justice in the courts.
Many courts have interpreted Labor Law Section 193, which prohibits “any” unauthorized deduction from an employee’s wages as allowing employers to dodge liability if they keep all of an employee’s earned wages, instead of withholding only a portion of an employee’s wages. Courts have also interpreted Section 193 to only apply to unauthorized written wage deductions, rather than other, equally damaging forms of wage theft. The “No Wage Theft Loophole Act” clarifies that any form of unauthorized wage deduction, regardless of the amount, qualifies as wage theft, without exception.
For example, in 2015, a court found that a contractor for a healthcare communications company wasn’t owed contractual salary, damages, or attorneys fees because he couldn’t show a specific instance of a pay deduction, just a total withholding of wages when he was unjustly fired. This extremely narrow reading of the law interprets the ban on any deduction in Labor Law 193 to mean that the plaintiff has to show a specific example of wage theft, while the contractor suffered "merely the total withholding of wages,” as if keeping someone’s total pay is somehow less harmful than keeping part of it. The “No Wage Theft Loophole Act” makes clear that liability for wage theft applies regardless of whether an employee’s total or partial wages are illegally withheld.
“New Yorkers should be protected from having their wages stolen, plain and simple,” said Senator Andrew Gounardes. “This bill closes loopholes that allow unscrupulous employers to steal from their employees. Low-wage workers and women of color, who are disproportionately victims of wage theft, deserve better than watching their bosses escape liability through an obscure, judge-created loophole in the Labor Law. This bill holds employers to account for what they’ve promised their employers: a full day’s pay for a full day's work. I am thankful to the employment law attorneys who have exposed this loophole, and thank the Governor for signing this important measure into law.”
"I am thrilled that New York State has taken a big step forward to protect workers by enshrining the ‘No Wage Theft Loophole Act’ into state law,” said Assemblymember Jo Anne Simon, who sponsored the bill in the Assembly. “Too often, hard-working New Yorkers are denied some or all the wages that they have rightly earned through a judge-made loophole and misinterpretation of the state Labor Law. Our new law clarifies that any form of wage theft is indeed prohibited and that there are no exceptions to liability for failure to pay wages. It ensures that workers - particularly lower wage workers, people of color, and women - receive the wages they have rightly earned. I am thankful to Senator Gounardes for his steadfast leadership on this issue, and to the National Employment Lawyers Association for their advocacy for workers."
“The legislation closes a significant loophole in the Labor Law and will make it more difficult for employers to claim that they can legally refuse to pay their workers”, said Marjorie Mesidor, President of NELA/NY.
The groups celebrating the passage of the “No Wage Theft Loophole Act” include:
Building and Construction Trades Council of Greater New York
Women’s Center for Education and Career Advancement
Government Accountability Project
Center for Popular Democracy
National Employment Law Project
Gender Equality Law Center
New York Legal Assistance Group
Catholic Migration Services
The Legal Aid Society