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Recent Legislative Changes Impose New Obligations on New York Employers

There have been a number of recent amendments to New York’s labor and employment laws that are significant for New York employers. This alert summarizes such amendments and some of the steps employers should take to comply with them.

New Law Requires Written Notices and Acknowledgments Regarding Employees’ Pay
Effective October 26, 2009, Section 195(1) of the New York Labor Law requires New York employers to provide written notices to all newly-hired employees of their (1) rate of pay; (2) regular pay day; and (3) for employees eligible to receive overtime pay (i.e., non-exempt employees), their regular hourly and overtime rates of pay. The law also requires employers to obtain from all employees written acknowledgments that they have received such information. While no specific penalties are specified for noncompliance with these requirements, such violations may, under general Labor Law provisions, result in a relatively small fine.

The newly required notices and acknowledgments must conform with requirements established by the Commissioner of Labor as to form and content; however, to date, no such requirements have been issued. Until such time, employers are well advised to incorporate into their new hire materials a document containing the required notice information, which employees hired on or after October 26, 2009 should sign to acknowledge their receipt. As many employers may already be doing, such required notice information may be incorporated into offer letters or employment agreements, which employees are asked to countersign to signify their acceptance thereof. It is generally sound practice for employers to provide new employees with, at a minimum, a brief offer letter for them to countersign setting forth the key terms of their employment, including without limitation their position, rates of pay and whether employment is “at-will” or otherwise.

The new law is intended to make sure that all employees are informed of their regular and, if applicable, overtime rates of pay, especially where non-exempt employees are paid on a salary basis, which may make it more difficult for employees to calculate their overtime rates of pay. Not all employers or employees appreciate that employees paid on a salary basis may be properly classified as “non-exempt” and entitled to overtime pay.

Thus, the recent Labor Law amendments should highlight the importance of properly classifying and paying employees under federal and state wage and hour laws, particularly of paying exempt employees any required overtime pay. Lawsuits for violating wage and hour laws have exploded over the last few years and show no signs of letting up. The good news for employers is that the risks of such lawsuits – which tend to be both expensive and time consuming – can often be mitigated by proper recordkeeping practices and proactively conducting internal wage and hour audits.

Labor Law Amendments Provide Additional Wage and Hour Protections
Recent amendments to the New York Labor Law, effective November 24, 2009, provide employees with additional wage and hour protections.

First, amendments to Sections 198(1-a) and 663(1) and (2) make it more likely that an employer found to have improperly withheld wages will be required to pay liquidated damages in the amount of 25% of such unpaid wages. Previously, such liquidated damages were available only if the employer’s failure was proven (by the employee or Labor Commissioner) to be willful. Under the new law, such liquidated damages may be assessed, unless the employer proves that it had a good faith basis for believing that its underpayment was in compliance with the law.

Second, Section 198 has also been amended to expressly authorize the Commissioner of Labor to bring a claim for unpaid wages against an employer in an administrative action, as opposed to solely in a court action.

Third, amendments to Section 215(1) increase the potential penalties that may be assessed against an employer found to have retaliated against an employee for invoking his or her rights under the wage and hour and other provisions of the New York Labor Law. Specifically, the amendments increase the minimum penalty from $200 to $1,000, increase the maximum penalty from $2,000 to $10,000, and, for the first time, permit the Commissioner to order the employer to pay lost compensation (if any) to the employee.

NYSHRL Amendments Protect Victims Of Domestic Violence
The New York State Human Rights Law (“NYSHRL”) prohibits discriminatory employment practices based on certain characteristics, such as race, national origin, sex, age, disability, sexual orientation, marital status and military status. The law has recently been amended to add “domestic violence victims” as a protected classification. The NYSHRL defines a “domestic violence victim” to be “an individual who is a victim of an act which would constitute a family offense” under Section 812(1) of the Family Court Act, which includes acts of harassment, stalking, menacing, reckless endangerment, criminal mischief, assault or attempted assault committed between members of the same family or household.

The new NYSHRL amendment is similar to one made to the New York City Human Rights Law (“NYCHRL”) in 2001. While, unlike the city law, the new NYSHRL amendment does not contain an express requirement that employers provide reasonable accommodations to domestic violence victims (such as to take time off from work for court appearances, to recuperate from injuries, or to consult with a district attorney, counselor and/or doctor), legislative commentary and statements by the New York Division of Human Rights suggest that, nevertheless, the NYSHRL does require such reasonable accommodations.

In response to the new law, employers should review and, if necessary, revise their equal employment and anti-discrimination policies to ensure compliance with the law and train their managers and human resources professionals about the new protections for domestic violence victims. When doing so, employers may want to take the opportunity to more generally train their employees and managers about their anti-discrimination and anti-harassment policies, which training should be conducted periodically to reduce the risks of employment discrimination and harassment claims.

Civil Fines and Penalties May Now Be Imposed under the NYSHRL
The NYSHRL has also been amended to provide for discretionary civil fines and penalties, payable to the State, against anyone engaging in an unlawful discriminatory act after July 6, 2009. Previously, such fines and penalties were only available for housing discrimination, but now they may be imposed for any unlawful discriminatory act, including employment discrimination and harassment. The fines and penalties may be up to $50,000 for “garden variety” unlawful discriminatory acts, and up to $100,000 for willful, wanton or malicious discrimination. Such fines and penalties are in addition to the compensatory damages and equitable relief currently available to plaintiffs under the NYSHRL.

Additionally, while punitive damages are not currently available for violations of the NYSHRL, there is legislation currently pending in the New York State Assembly and Senate to amend the NYSHRL to permit (as the NYCHRL already does) recovery of punitive damages and attorneys’ fees.

New York employers should also note certain July 29, 2009 amendments to New York State’s “Mini-COBRA” laws, which are separately described in a prior Client Alert, see Important New York State Law Changes Affecting Group Health Plans.


This alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations. If you have any questions regarding the above-described laws and what they might mean for you, please contact Mark J. Goldberg or any other member of Loeb & Loeb’s Employment Practice Group.

Circular 230 Disclosure: To ensure compliance with Treasury Department rules governing tax practice, we inform you that any advice contained herein (including any attachments) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer; and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.