December 22, 2011

New York State Department of Labor Wage Theft Prevention Act

New York State Department of Labor Wage Theft Prevention Act Tax & Business

Reminder: Action to be Taken in 2012

On April 9, 2011, the Wage Theft Prevention Act (“WTPA”) went into effect requiring New York employers to provide a written notice to new hires which is to include pay rate, pay day, and basis of wage payment. New hires must receive the notice at the time of hire. The Act also requires annual notice to be given to all other existing employees on or before February 1st of each year. The new law applies to all private employers and there is no minimum employee threshold. The goal of this new law is intended to protect employees from wage theft by their employers. Examples of wage theft may include: paying employees less than minimum wage, misclassifying employees, failure to pay overtime when earned and forcing employees to work off the clock.

While the law has been in existence since April 2011, Marcum is including this article again as a reminder to all employers to issue the annual notice by February 1, 2012 as indicated above. The law includes an annual employer obligation to inform employees in writing of certain information detailed below.

The notices that are provided to employees must contain the following information:

  • The rate or rates of pay and the basis for the rate (hourly, etc.).
  • Any allowances claimed as part of minimum wage, including tip, meal, or lodging allowances.
  • The regular pay day.
  • The name of the employer and any d.b.a. names.
  • The physical address of the main office or primary place of business of the employer.
  • The mailing address, if different than the physical address.
  • Employer telephone number.

Specifics of the notice requirements are as follows:

  • Must be written (not verbal) and in a separate document.
  • Must be written in English and in the employee’s primary language.
  • Must be provided to the employee in duplicate so that the employee can keep a copy.
  • The employer must retain an original signed acknowledgement of the notice and retain the signed acknowledgement for six years. An email reply is insufficient.

The written acknowledgement must contain the following information:

  • The employee must acknowledge receipt of the notice.
  • The employee must affirm that they accurately identified their primary language to the employer.
  • The employee must affirm that the notice provided was in their primary language.

Specifics of the acknowledgement requirement, which is separate from the notice requirement, include:

  • An acknowledgement must be obtained each and every time an employee is provided with a notice.
  • The acknowledgement must be written and must be its own document, not incorporated into other employer forms.
  • The acknowledgement must in English and in the employee’s primary language.
  • The acknowledgement must be signed and dated by the employee.

The WTPA requires that employer’s provide a written explanation of how wages were computed if requested by the employee. Wage statements, which must be provided with every payment of wages, must include:

  • The employees name.
  • The employer’s name, address and telephone number.
  • The dates of work or pay period covered by that specific payment of wages.
  • The rate of pay and the basis of pay.
  • Gross wages.
  • Deductions.
  • Allowances claimed as part of the minimum wage.
  • Net pay.
  • Nonexempt employees – regular hourly rates of pay and overtime rates of pay along with the actual number of regular hours and overtime hours worked.

The WTPA also requires the employer to maintain and preserve the notice, acknowledgment and wage statements for six years. Failure to provide notices and/or wage statements can lead to penalties such as civil suits against the employer up to a maximum of $2,500 plus attorney fees and costs per employee. Other remedial penalties by the Commissioner can require notice of violations to be posted either in the employer’s premises or to the public. You can obtain updated and translated notices by visiting the NYS Department of Labor website.

As the laws change related to this topic, Marcum is committed to keeping its clients up to date on this topic.

Should you have any questions on this matter, please contact your Marcum Tax Professional.

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