Operating in New York? What You Need to Know About the NEW Wage Theft Prevention Act!

By John H. Douglas

With all the wage and hour class action litigation going on around the country, most employers with operations in a variety of states cannot help but be aware that careful compliance in this area is very important — and mistakes ever more costly. In addition to the recent enforcement initiatives announced by the U.S. Department of Labor and the many private lawsuits spreading like wildfire, an increasing number of states are now getting in on the act — in many cases adopting legislation that provides additional ammunition for private litigants. New York's recent Wage Theft Prevention Act (WTPA) ( http://tinyurl.com/6j3gwqc), effective this month, is one such law. If you have not already, prudent employers with operations in New York should take notice.

What are the principal features of this new law?

New York law already required employers to notify newly hired employees in writing of their regular and overtime rates of pay (the latter, only if they were eligible) and regular pay day. Under the WTPA, however, employers now must also indicate the basis of wage payment, for example, by specifying whether the employee will be paid on an hourly or salary basis, or by another method such as piece or commission, as well as any intention of the employer to offset allowances (e.g., tip or meal allowances) as part of its minimum wage obligation. The WTPA further requires that these notices be updated and provided to employees at least seven calendar days prior to any changes to the employee's pay or other terms contained in the notice (though such changes can be reflected in the employee's wage statement) and that employers obtain from employees a signed and dated written acknowledgment in both English and the employee's primary language of receipt. The latter acknowledgments must be retained for a period of six years. There also are new penalties for failure to comply with these new WTPA requirements. If an employer fails to provide the required notice of wages within 10 business days of an employee's starting work, he or she can sue to recover damages of $50 for each workweek the law is violated up to $2,500 and recover costs and reasonable attorneys' fees.

The WTPA will affect pay stubs. Pay statements will now have to specify the applicable dates the wages cover and the rate and basis of pay, as well as any regular and overtime pay rates and hours for non-exempt employees. Here again, there are new penalties for non-compliance. If an employer fails to provide the required pay statement, the employee may bring an action in court to recover damages of $100 for each workweek that the violation occurs (again, up to $2,500), plus costs and reasonable attorneys' fees. Under the WTPA, employers must now preserve and maintain payroll records and/or pay statements for six years — up from three.

The WTPA also increases the amount of "liquidated" damages an employee can recover for a violation when the employer cannot prove good faith compliance from 25 percent to 100 percent of the underlying damages recovered. Thus, employees shorted wages in New York can now potentially recover twice what they are owed. In addition, the WTPA also provides for the recovery of prejudgment interest and attorneys' fees in any civil action to recover unpaid wages brought by an employee and allows employees to collect an extra 15 percent of any judgment and attorneys' fees and costs if an employer does not pay a judgment after a loss in court within 90 days. Finally, the statute also creates a variety of criminal penalties for failure to comply with wage and hour law and payment requirements.

Employers operating in New York are well advised to make sure they are aware of and comply with these new requirements. The price of non-compliance has never been higher.

Reasonable Accommodations for Sabbath Observances: What Does the Law Require?
By Tamar N. Dolcourt

Under federal law, employers must make reasonable accommodations for their employees' sincerely held religious beliefs, unless such accommodations would cause an undue hardship on the employer. On April 14, 2011 ( http://hr.cch.com/eld/MarokoWerner.pdf), a federal court in Minnesota allowed the religious discrimination claim of a Seventh Day Adventist who lost his truck-driving job when his employer refused to accommodate his Sabbath observances proceed to trial.

The employee had been offered a position upon completion of the employer's training program. He had repeatedly told his supervisors throughout the training that his religion forbade him from working from sundown Friday through sundown Saturday. He was assured on several occasions that this would not be a problem, and there was a note placed in his file explaining the restriction. After his training was complete, the employee returned home to await assignments, however the assignments never came. One of the employer's managers informed him there were no assignments because he needed to be available on Saturdays. He continued to contact the employer to find out if there was work for him and eventually was informed that the employer determined that he had voluntarily quit his position. He then sued the employer for religious discrimination.

The court found the employer failed to show it either offered the employee a reasonable accommodation, including potentially a transfer to a different account, or that accommodating the employee would place an undue hardship on the business. Though the employer argued it had made certain offers to the employee as an accommodation, including a leave of absence to see if another position opened, there was a dispute as to what, if any, offers of accommodation had actually been communicated to the employee. The court also found the employer had not shown the employee's request created an undue burden on its business because it had not considered what effect transferring the employee to another account would have on the business, but instead it only considered the effect of keeping the employee on the first account. Therefore, the court found there were enough factual questions to allow the case to go to trial.

In order to accommodate an employee's request for certain time off for religious observances, an employer can offer a range of options, including shift-swapping, altering starting and ending time for shifts, flexible schedules, or exchanging break time for the ability to leave early or come in late. However, the employer is not required to make accommodations that would place an undue burden on its business operations. For example, an employer cannot be forced to pay overtime wages to one employee to accommodate the religious observances of another. The EEOC has provided helpful guidance ( http://www.eeoc.gov/) regarding reasonable accommodations for religious observances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.