Between Jan. 1 and Feb. 1, 2012 (and in each January thereafter), New York employers must furnish all New York employees with a written notice of: (1) their rate of pay including, for non-exempt employees, their overtime rate; (2) how the employee is paid (hourly, salary, commission, etc.); (3) their regular payday; (4) the official name of the employer and any other names used for business (DBA); (5) the address and phone number of the employer’s main office; and (6) if applicable, any allowances taken as part of the minimum wage (i.e., tip, meal and lodging deductions). Prior to the enactment of the Wage Theft Prevention Act on Dec. 13, 2010, New York Labor Law § 195 only compelled employers to provide such a written notice once to newly hired employees at the time of hire (before the employee performed any work). Starting in 2012, New York employers must also provide this same notice to all New York employees every year between Jan. 1 and Feb. 1.
We recommend that employers comply with the written notice requirement by distributing the Model Notices published by the New York Department of Labor (“DOL”).1 The compliance checklist and frequently asked questions that follow are designed to help New York employers comply with the written notice requirement.
Compliance Checklist
1. Select and complete the appropriate Model Notice for each New York employee.
The DOL published Model Notices for the following types of employees: (1) hourly rate employees; (2) employees paid multiple hourly rates; (3) employees paid a weekly rate or salary for a fixed number of hours (40 or fewer hours per week); (4) employees paid a salary for varying hours, day rate, piece rate, flat rate or an other non-hourly basis; (5) employees paid the “prevailing rate”; (6) exempt employees; and (7) employees of temporary help firms.
2. Determine the employee’s primary language and complete the relevant foreign language version of the Model Notice, if necessary.
If the employee’s primary language is Spanish, Chinese, Korean, Haitian Creole, Polish or Russian, employers must also complete the relevant foreign language version of the Model Notice. If the employee’s primary language is not among those listed, the employer only has to provide the Model Notice in English.
3. Have each employee sign and date the Model Notice (English language version and foreign language version, if applicable) between Jan. 1 and Feb. 1 each year beginning in 2012.
4. Provide each employee with a copy of the signed/dated Model Notice.
5. If the employee is a commissioned salesperson, staple a signed commission agreement to the relevant Model Notice.
New York law also requires employers to provide commissioned salespeople with a signed copy of their commission agreement. We recommend that you comply with this additional requirement by having the employee sign the commission agreement and then stapling the signed commission agreement to the relevant Model Notice.
6. Retain the signed/dated Model Notices for six years in a place where they could be produced to the DOL on request.
7. If any information on the relevant Model Notice changes, provide an updated Model Notice at least seven days before the change goes into effect.
Frequently Asked Questions
What happens to employers that fail to comply with the written notice requirement?
The monetary penalties for failure to comply are not insignificant. The DOL can fine employers that fail to provide their employees with the proper written notice $50 per week per employee. For example, if the DOL audits a New York employer with 50 New York employees in August 2012 and finds that the employer failed to provide the written notice, that employer would face a fine of approximately $65,000. While employees can also sue and seek damages, the maximum amount each employee can recover is $2,500 (plus costs and reasonable attorneys’ fees).
Are employers required to use the DOL’s Model Notices?
No, employers are not required to use the DOL’s Model Notices. Employers may adapt the Model Notices or even create their own notices as long as the required information is given, the employee is given a copy, and the employee signs an acknowledgement of receipt that the employer keeps for six years. We encourage employers to use the DOL forms to avoid uncertainty in the event the DOL audits the employers' records.
Can the annual required written notices be distributed and returned electronically?
Yes, the notices can be distributed and returned electronically, provided that the employer’s system for doing so enables the employee to acknowledge receipt of the notice and print a copy.
Do employers still need to provide new hires with the required written notice at the time of hire?
Yes, New York employers must provide the written notice to New York employees at the time they are hired and again each year between Jan. 1 and Feb. 1. For example, an employee who begins work on July 2, 2012, would receive the written notice on July 2, 2012 (before performing any work), and then again each year between Jan. 1 and Feb. 1 beginning in 2013.
The Model Notice for exempt employees includes a space for the applicable exemption from overtime and indicates that this information is “optional.” Are employers required to provide employees with written notice identifying a specific overtime exemption?
No. While this information is not required, we recommend that, with the assistance of an experienced human resources professional with advice from counsel, employers carefully complete this optional space on the Model Notice for exempt employees. Properly classifying newly hired employees will help employers avoid litigation.
Are there any other new notice and recordkeeping requirements employers should know about?
Yes. The additional requirement that the written notice described here be distributed to all employees annually between Jan. 1 and Feb. 1 (beginning in 2012) was enacted as a part of the Wage Theft Prevention Act, which Gov. David Paterson signed into law on Dec. 13, 2010. The DOL issued a pamphlet that provides a concise overview of the Wage Theft Prevention Act.2 As the pamphlet describes, the Wage Theft Prevention Act also added new requirements regarding payroll records and wage statements provided to employees. We encourage all New York employers to review the DOL pamphlet and contact us if you have any additional questions.
Where can employers get the Model Notices and more information from the DOL?
The DOL website includes the latest versions of the Model Notices as well as some additional information regarding the Wage Theft Prevention Act. We recommend that employers visit the website each time they prepare the required written notice to ensure they are using the most up-to-date Model Notice and that there have not been any changes to the law.3
* * *
Navigating the ever-expanding and constantly changing rules governing New York employers is complicated and often requires the assistance of experienced labor and employment counsel. Please do not hesitate to contact us if you have any additional questions or concerns.
For more information on this alert, please contact any of the lawyers listed below:
Boston
John Adkins, john.adkins@bingham.com, 617.951.8551
Jenny Cooper, jenny.cooper@bingham.com, 617.951.8473
Louis Rodriques, Co-chair, Labor and Employment Group, louis.rodriques@bingham.com, 617.951.8340
Los Angeles/Orange County
Jacqueline Cookerly Aguilera, jackie.aguilera@bingham.com, 213.229.8439
Debra Fischer, debra.fischer@bingham.com, 213.680.6418
San Francisco
James Severson, james.severson@bingham.com, 415.393.2242
New York
Douglas Schwarz, douglas.schwarz@bingham.com, 212.705.7437
Tokyo
Mie Fujimoto, mie.fujimoto@bingham.com, 81.3.6721.3138
1 Model Notices available here: http://www.labor.ny.gov/formsdocs/wp/ellsformsandpublications.shtm.
2 Wage Theft Prevention Act pamphlet available here: http://www.labor.ny.gov/formsdocs/wp/P715.pdf.
3 Department of Labor (New York) website: http://www.labor.ny.gov/home/.
This article was originally published by Bingham McCutchen LLP.