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What is the Wage Theft Prevention Act?

Your questions about the Wage Theft Prevent Act, answered

What is the Wage Theft Prevention Act (WTPA)?

New York State’s Wage Theft Prevention Act, enacted on April 9, 2011 and amended in 2014, gives employees power to fight against wage theft. The Act strengthens the penalties for employer violations and requires employers to provide written wage notices so that employees have more information about possible violations.

The Wage Theft Prevention Act also added stronger protections for wage-theft whistleblowers and increased penalties for wage theft. For example, under the WTPA employers who fail to provide pay notices and pay stubs may owe penalties of up to $10,000 in damages per employee.

What is Wage Theft Prevention?

Wage theft occurs when an employer does not fully pay an employee for work the employee has performed. This theft can take many forms, including paying less than the required minimum wage, failing to pay overtime, requiring off-the-clock work, taking illegal deductions, failing to pay wages in a timely manner, and failing to provide former workers with their last paycheck.

Wage theft is a serious social and economic problem, which has been estimated to cost employees more than $15 billion a year across the country. Workers in low-wage industries are most often the victims.

Federal, state, and local laws attempt to prevent employer wage theft by empowering employees with knowledge, providing avenues for employees to recover stolen wages from their employers and penalizing employers for violating the law.

What is the Wage Theft Prevention Amendment Act of 2014?

On December 29, 2014, Governor Andrew M. Cuomo signed a bill amending the New York Wage Theft Prevention Act. Prior to the amendment, employers had to provide written notice of wage rates to each of their employees not only at the time of hiring, but again on or before February 1 of each year of employment. Now, employers still must provide newly hired employees with written notice of wage rates, but they do not have to re-notify employees every year.

The amendment also increased the penalties for an employer’s failure to provide pay notices to $50 per day for every day the notice is not provided, up to a maximum of $5,000 per employee. Previously, the penalty was $50 per each week notice was not provided up to a maximum of $2,500 per employee.

Likewise, the amendment increased penalties for failing to provide pay stubs that complied with the Wage Theft Prevention Act from $100 to $250 per violation and increased the statutory cap on damages to $5,000.

To help curb repeat offenses, penalties from $1,000 to $20,000 may be imposed upon employers found to have violated the law during the previous six years, up from a prior $10,000 statutory cap.  

If the Commissioner of the New York State Department of Labor obtains a judgment against an employer for violating the Wage Theft Prevention Act, a portion of the judgment must go to the employees harmed. Prior to the amendment, the Commissioner had the discretion to decide whether any part of the judgment went to the aggrieved employees.

What is the Wage Theft Penalty?

New York state’s Wage Theft Prevention Act imposes penalties for an employer’s failure to provide written pay notices to their employees of $50 per day for every day the notice is not provided, up to a maximum of $5,000 per employee. The Act also includes a penalty if employees do not receive a pay stub, up to a maximum of $5,000 per employee.

Employees and employers can also read more about other wage and hour laws that protect workers in New York City.

What is the Wage Theft Punishment?

Employers who violate the Wage Theft Prevention Act face multiple penalties and punishments. If employers fail to provide written pay notices to employees and do not provide pay stubs, they may have to pay a penalty of up to $10,000 per employee. In addition, the Act punishes repeat offenses by ordering penalties of between $1,000 to $20,000 for employers who violated the law in the previous six years.

What is Wage Theft Prevention Notice?

The Wage Theft Prevention Act requires employers to give written notice of wage rates to each newly hired employee.

The notice must include the following:

  • Rate of pay, including the overtime rate of pay if the employee is eligible for overtime
  • How the employee is to be paid (i.e. by the hour, salary, through commissions)
  • Any allowances taken (i.e. tips, meal and lodging deductions)
  • The regularly scheduled payday
  • The official name of the employer and any other names used for business
  • Address and phone number of the employer’s main office or principal location

The employer must provide the notice both in English and in the employee’s primary language, unless the New York State Labor Department does not offer a translation in that language. In that case, the employer need only provide the notice in English. The Labor Department currently offers translations in Spanish, Chinese, Haitian Creole, Korean, Polish and Russian. While no specific form is required, sample notices are available at the New York State Department of Labor’s website.

Employers can notify employees of pay rate increases or changes to the regular payday or primary business address on employee pay stubs. However, any pay reductions must be provided in a separate written notice one week prior to the reduction in pay.

Employers must receive a signed acknowledgment from each new employee that she or he received the wage notice. They must also keep copies of the notices and signed employee acknowledgements for six years following termination of employment.  

What is the Wage Theft Protection Act?

In New York state, the Wage Theft Prevention Act, passed in 2011, provides critical protections against wage theft by employees. The protections include penalties if employers fail to provide written notice of the employee’s wage rate, overtime rate, the scheduled payday, and information about the employer. These written wage notices must be in English and the employee’s primary language.

The Act also requires employers to provide pay stubs showing the employee’s hours and wages earned. If employers do not comply with these provisions, they face penalties. These protections provide employees with valuable information to determine whether they are victims of wage theft.

What is the Wage Theft Prevention and Wage Recovery Act?

The Wage Theft Prevent and Wage Recovery Act is a proposed federal law that has not been passed by Congress. It is a Democrat-sponsored bill that currently has little chance of making it through the Republican-majority House and Senate.

The bill proposes many changes to the Fair Labor Standards Act (FLSA), which is the federal wage/hour law, including the following:

  1.    Require employers to pay the full amount of wages owed to an employee. Currently, under the FLSA, workers can only recover wages at the minimum wage or, for overtime hours, 1.5 times their regular wage; for example, an employee may be hired at $9.00 per hour, but would only have the right to recover $7.25 of every $9.00 she was owed.
  2.   Require employers to provide employees with written notice of the terms of their employment and create a civil fine for noncompliance of $50 for the first violation and $100 for each subsequent violation.
  3.   Require employers to pay final paychecks within 14 days of the last day of employment or by the payday for the pay period, whichever is earlier. Otherwise, the employer will owe the employee her daily wage for each day beyond that period for a maximum of 30 days.
  4.   Create a civil penalty of $2,000 when employers violate minimum wage and overtime protections under the FLSA, even if the violation was unintentional. Currently, the Department of Labor (DOL) does not have the authority to assess civil penalties for violations of the FLSA’s minimum wage or overtime requirements unless the employer is guilty of repeat or willful violations.
  5.    Increase the existing civil penalty for willful or repeat violations from $1,100 per violation to $10,000.
  6.   Increase the damages employees are entitled to from twice the owed wages to triple the amount of owed wages.
  7.   Strengthen protections against retaliation to quadruple the amount of owed wages.
  8.   Create a civil penalty for recordkeeping violations of $1,000 for an employer’s first violation and $5,000 for each subsequent violation.
  9.   Increase the time that employees have to bring a claim from two years to four years (and from three years to five years for willful violations) from the date of the violation and temporarily suspend this time limit during any Department of Labor investigation.
  10.  Make it easier for employees recover their stolen wages by allowing them to pursue collective action cases like most class action cases, in which members of the “class” must affirmatively “opt-out” of the case in order to not be involved instead of having to affirmatively “opt-in” to the collective action.

What to do about wage theft?

If you have been the victim of wage theft, and employment lawyer can help recover back pay, unpaid overtime, and penalties.  And in New York state, if you were hired after 2011 and did not receive written notice of your wage rate, in English and in your primary language, your employer may have violated the wage protection laws. Similarly, if you do not receive regular pay stubs, you may have a claim.

Learn more about common forms of wage theft and the penalties.

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