News & Insights

New York State is Cracking Down on Wage Theft

Many employees within the construction and restaurant industries in New York State claim that their employers exploit them by refusing to pay them the agreed upon amount, not paying overtime and permitting unsafe working conditions. Most, but not all, of these abuses occur in non-union employment situations where there is no organization keeping an eye on the employer to ensure that it meets its obligations. As a result of violations by some employers, New York State has stepped up its investigation and enforcement of labor laws, even going after employers criminally.

Since January 1, 2017, the New York State Department of Labor, with the support of Governor Cuomo, has involved prosecutors from various counties in pursuing egregious wage theft cases. The prosecutors often proceed criminally against the employers and, as part of the resolution of the criminal charges, require that the wages which were not paid be returned to the workers.

The goal of the Governor in addressing these issues was to avoid employees being subjected to unsafe or unsanitary working conditions or working long and irregular hours without being properly compensated for doing so. As part of this program, the Governor also created Mediation and Anti-Retaliation Units within the Department of Labor. The Mediation Unit was created to expedite resolutions so that workers can receive the money that was improperly withheld more quickly. The Anti-Retaliation Unit takes action on behalf of workers who are subjected to unfavorable action for either filing a complaint about Labor Law violations with their employers or reporting the same to the Department of Labor.

The abuses which are being addressed are mainly related to the construction industry, although it appears that certain restaurant owners are also being targeted for failing to properly pay their employees. As a result of stepped up enforcement, employers are now more likely to resolve the claims of unpaid wages or other wage theft directly with the Department of Labor to avoid having these matters referred to the local District Attorney’s office. The Department of Labor conducts compliance conferences with the employers, and if the employer agrees to pay workers what is owed without further administrative action, no referral to the District Attorney is made. If, however, the employer refuses to pay or attempts to hide its assets in order to avoid making payment, the Department of Labor now will refer the matter to the District Attorney for possible prosecution.

While most employers in New York State comply with the law, the most common ways in which wage theft occurs include:

  1. Paying restaurant employees tips only (and not an hourly wage);
  2. Not paying restaurant employees the full amount of tips to which they are entitled (“tip skimming”);
  3. Paying a day rate to non-union employees which actually constitutes payment below the minimum wage when the total hours worked are counted;
  4. Not paying overtime to employees who work more than forty (40) hours in a payroll week;
  5. Withholding final paychecks;
  6. Not paying for training time; and
  7. Charging employees for required uniforms and equipment.

Failure to properly pay employees can now result in not only a fine and an order of restitution but, in some egregious cases, incarceration.

As an employer you should be aware of your obligations under New York State law and comply with them.

If you want to discuss these obligations or review the policies and procedures that you currently have in place, please contact one of our experienced attorneys.

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