New Years Greetings for New York State Employers

As New York employers ring in the New Year, they should be aware of important recent changes in state law designed to protect employees.

First, the New York State Wage Theft Protection Act has been amended in several respects effective February 27, 2015. Most notably, employers need no longer send the annual notice due each February 1 advising employees of their rights under the law or obtain signed acknowledgments from the employees as to their receipt of the notice. The Department of Labor is not requiring employers to provide that notice by February 1, 2015 given this amendment. However, employers must still provide the required information and obtain a signed acknowledgment from each new hire at the time of hiring. Employers in the hospitality industry should make note that they must still provide the notices for 2015 and 2016 to any minimum wage earners because the Hospitality Industry Wage Order requires such a notice whenever the rate of pay changes, and the rate of pay is changing in both years due to the recently adopted mandatory increases in the minimum hourly wage (to $8.75 for 2015 and $9.00 for 2016).

At the same time as employers can celebrate the removal of the administrative headaches created by the annual notice requirement, the State has adopted more onerous penalties for noncompliance with the other provisions of the statute. Specifically, if the required notice is not provided by the employer within 10 days of hiring, the employee can now recover $50 per day as a penalty up to a maximum of $5,000. An employer’s failure to provide employees with pay stubs that comply with the statute can now give rise to penalties of $250 per violation, up to a maximum of $5,000. Further, the State is taking aim at repeat offenders: Employers which are found to have violated the law in the previous six years can now be subjected to penalties of up to $20,000 and, in egregious or repeated cases, data about the employer’s pay practices may be posted on the Department of Labor website.

Employers that use the LLC form should take note that the ten members with the largest ownership interests can be held personally liable for wages determined to be due to employees (much like traditional corporations, which have long been subject to such a provision under the New York Labor Law).

The State has also taken steps to protect employees whose employer goes out of business only to have the business resurface in a new corporate form. The law provides for successor liability such that the new employer will be deemed to be the "same employer if the employees of the new employer are engaged in substantially the same work in substantially the same working conditions under substantially the same supervisors, or if the subsequent employer has substantially the same production process, produces substantially the same products and has substantially the same body of customers." Given the aggressive use of successor liability principles by plaintiffs’ attorneys under existing law, this enhanced protection for employees should be considered in connection with assessing the liabilities that may accompany acquisitions of the stock or assets of an existing business.

Second, effective December 22, 2014, New York State employers are required to grant leave to employees who serve as volunteer emergency responders when the Governor declares a state of emergency. Eligible employees include volunteer firefighters and ambulance service personnel who provide documentation as to their status or whose duties relate to the emergency. While the leave may be unpaid, the employee may choose to use any form of paid leave available pursuant to the employer’s policies. Employers may be able to obtain waivers so that they do not have to provide leave if they are able to demonstrate that granting leave would cause an undue hardship. The law defines an undue hardship as an accommodation requiring significant expense or difficulty, including a significant interference with the safe or efficient operation of the business or violation of a bona fide seniority system. Factors to be considered in determining whether granting a leave constitutes an undue hardship include, but are not limited to the identifiable costs incurred, the number of individuals seeking leave and, as to employers with multiple locations, the degree to which the geographic separation or administrative fiscal relationship of the facilities makes granting leave more difficult and expensive.

New York employers may want to revisit their employee handbooks and policies to ensure compliance with these new laws. The New York employment attorneys of Lewis Brisbois Bisgaard & Smith LLP would be pleased to assist. Please contact Peter T. Shapiro ( 212-232-1322) or Elior D. Shiloh ( 212-232-1362).