New York Strengthens Wage Laws

Following one of the most active legislative periods in recent times, New York has enacted laws affecting the manner in which workers are paid, which will likely impact most employers. Due to raising the wage threshold for exemption from Article 6 of the New York Labor Law (“NYLL”), a larger number of employees now: 1) must be afforded the opportunity to consent before being paid through direct deposit; and 2) can sue under Section 198 of the NYLL when their employer fails to provide wages, benefits, or wage supplements in a timely fashion. In addition, the law now requires that the terms of compensation of a commissioned salesperson be memorialized in a writing signed by the employee and the employer, and that in the absence of such a writing, in any action for unpaid wages, it will be presumed that the terms of employment, including understandings as to when/how commissions are earned and paid, are as described by the commissioned salesperson. Given the repercussions associated with a failure to reduce to writing the compensation arrangement of a commission salesperson, employers need to know what types of payments constitute a “commission,” when an employee is a “Commission Salesperson” subject to Section 191(c) of the NYLL, and what to do about it. Employers also need to understand how the change in the wage threshold affects their exposure to wage lawsuits arising under the NYLL. This two-part article addresses these questions and summarizes the effect certain other changes in the NYLL will have on the workplace.

Background