EMPLOYERS ONLY HAVE UNTIL JANUARY 31ST TO NOTIFY THEIR EMPLOYEES OF WAGE RATES AND TERMS OF PAY

As the new year begins, New York State is imposing a hefty new obligation on virtually all employers.

As a result of the Wage Theft Prevention Act enacted last year, all private sector employers in New York must give each of their employees an annual written notice known as a “Notice of Pay Rate and Payday”.  The notice must be given between January 1st and February 1st of each year, beginning in 2012.

The annual notice must include, among other things:

1.  The employee’s rate(s) of pay, including any overtime rate
2.  How the employee is paid (e.g., hourly, weekly, salary, commission, etc.); and
3.  The employer’s regular pay day.

The law also requires that the Notice be provided at the time of hiring (before work is performed) and within 7 days of a change in an employee’s pay rate, or payday or other change in information contained in the Notice,  if the change is not listed on the employee’s pay stub for the following pay period.

The required Notice can be found on the Labor Department’s website, but employers can use their own form of Notices so long as they contain the required information.

In addition to the requirement to give an employee written Notice, the employer must have the employee sign a statement acknowledging receipt of the written notice.

The Notice requires the employer to specify whether the employee is exempt or non-exempt, and the method of payment for non-exempt employees (hourly, salaried, etc.).  It is optional to specify which exemption applies.  In most circumstances we suggest that employers not specify the exemption, particularly since more than one exemption could apply to a given employee.

In the event that the employee’s primary language is other than English, the Notice must be given in English and in the employee’s primary language. So far, the Labor Department had created templates in English, Spanish, Chinese, Korean, Creole, Polish and Russian.

If an employee’s wages are decreased, a new notice and acknowledgment must be obtained at least 7 days before the new pay rate is effective.

New York Law already requires that there be a signed agreement for employees who are paid on a commissioned basis, and the signed commission agreement must be attached to the Acknowledgment of Wage Rate.

As with most wage-related records, the signed Notices need to be retained for 6 years, even if the employee terminates employment earlier.

The law imposes stiff penalties for failure to procure a signed acknowledgment of wage rate. The penalty is $50 per week, up to a maximum of $2,500, together with costs and reasonable attorney’s fees. There is an affirmative defense for an employer to present, that the employee was paid the correct wages on a timely basis, or the employer did not believe that compliance with the requirement was necessary.

For more information about the Wage Theft Prevention Act or other employment-related issues, please contact our firm.