New York Employers Must Verify Their Employees’ Salaries Under 2010 Law

701013_11155185_02172012.jpgThe Wage Theft Prevention Act (WTPA), which passed the New York Legislature in 2010 and took effect in April 2011, requires New York employers to provide annual notices to their employees detailing their total wages and providing the identifying information of the employer. The WTPA is intended to help workers assert their rights by ensuring they have all the information they would need to make a wage claim if they believe their employer has violated New York labor laws. It applies to all private sector employers, regardless of size. The WTPA has generated controversy among business owners, and has even led some of its original sponsors to say it should be modified.

The law requires extensive reporting of wage amounts, withholding of income and payroll taxes, and other benefits for every employee. For many small businesses, this can be quite an onerous task. Some business leaders quoted by Buffalo’s WGRZ News describe the law as “government overstepping its bounds and being a problem for the private sector.” Some state legislators already have plans to try to repeal all or part of the law. One state senator noted that the information required by the law is available to the Department of Labor on demand already if they initiate an investigation of an employer.

The WTPA requires employers to keep reports on file for six years. It also requires employers to provide notices to employees in the employee’s “primary language.” The Department of Labor has produced template forms in Chinese, Creole, English, Korean, Polish, Russian, and Spanish. Penalties for failing to provide notices in a timely manner can be as high as $50 to $100 per employee per week.

A Democratic state senator who sponsored the bill in 2010 has stated that she believes the law should be “tweaked.” For example, she says that employers who provide weekly or bi-weekly pay stubs, which generally contain income and withholding information, should not be required to file annual notices as well. The purpose of the law, she told WGRZ, was to help the Department of Labor investigate and penalize employers who bilk employees out of wages or skip out on payroll taxes. Put another way, the WTPA was intended to catch “bad employers,” not add burdens to good employers.

Supporters of the WTPA argue that it is necessary for workers, offering protection from unscrupulous employers who might skim from their wages. It provides them with the information they need to hold employers accountable. Workers need extensive documentation to make a wage claim, and sometimes they are not even certain of the exact identity of their employer. This is why the WTPA requires the employer to disclose its full name, address, and any assumed business names it uses. One supporter told WGRZ that “aboveboard employers” will not have any significant added burden because they are doing this paperwork already. Future sessions of the Legislature will likely decide whether the WTPA is too onerous for New York businesses. Until then, business owners need to know that it is out there, and that they have some paperwork to do.

The New York business attorneys at Samuel C. Berger, PC offer fixed-fee packages of legal services to businesses and entrepreneurs who want to do business in New York and northern New Jersey. To speak to a member of our skilled legal team, contact us today online or at (212) 380-8117.

Web Resources:

Wage Theft Prevention Act Frequently Asked Questions (PDF), New York Department of Labor
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Photo credit: ‘Writing a check 2’ by Jeinny Solis S. on stock.xchng.