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New York Strengthens Wage Laws

By Elise M. Bloom, Fredric C. Leffler and Thomas A. McKinney
September 24, 2008

Part One of this article discussed the changes in New York Labor Law (NYLL) pertaining to commissioned sales personnel. The conclusion herein addresses the other changes made by the law.

Change in the Wage Threshold for Exemption

New amendments to the NYLL expand the NYSDOL's jurisdiction and enforcement capabilities by enlarging the pool of covered employees subject to the protections afforded under Article 6. In this regard, the amendments to NYLL ” 190(7), 192(2), and 198-c(3) increased the weekly wage threshold that exempts those individuals employed in an executive, administrative or professional category from coverage under certain provisions of Article 6 to $900 a week, up from $600 a week. Consequently, most workers who make less than $900/week, even if employed in an exempt capacity, are now protected under various sections of Article 6, expanding the pool of workers on whose behalf enforcement actions can be brought. Moreover, employees subject to Article 6 have a private right of action as well.

Before the amendments, the legislature was of the opinion that “if an employee who makes more than $600 per week files a wage claim complaint, the Department cannot take the complaint because such an employee is exempt from Article 6, which covers payment of wages. As a result, the Department cannot bring enforcement actions against their employers for failing to provide benefits or wage supplements. Since the last increase in the weekly wage threshold, to $600 in 1992, the average weekly wage in New York State has increased considerably. [These amendments] would increase the weekly wage threshold to $900, which more accurately reflects the current average weekly wage in the State. It will also expand the Department's jurisdiction, enabling the Department to investigate and recover wages for more individuals.”

Seeking to increase protections, the Legislature raised the threshold for coverage so that enforcement actions could be brought against employers who failed to provide timely benefits and wage supplements. Importantly, however, it should be noted that the new amendments do not affect the requirement (pursuant to Article 19, ' 652 of the NYLL and the regulations enacted thereunder) that bona fide executive, administrative and professional employees be paid only a minimum of $536.10 per week to be exempt from New York State overtime requirements.

Increased Exposure to Wage Claims

Effective Jan. 14, 2008, as a result of the amendment to the definition of “clerical and other worker,” ' 190(7), an employee who earns less than $900 per week, can pursue a claim for unpaid wages under ' 198, regardless of his/her status as executive, administrative and professional employees. As noted above, this is of particular importance because ' 198 provides for the recovery of unpaid wages, attorneys' fees, and liquidated damages of 25% of the total amount of wages found to be due, plus interest.

Increased Exposure to Criminal Penalties for Benefits and Wage Supplements

Employers will be subject to scrutiny for failure to provide timely benefits and wage supplements to a larger group of employees. Under ' 198-c of the Labor Law, employers that fail to pay or provide accrued or earned benefits or wage supplements to employees within 30 days after such payments are due can be found guilty of a misdemeanor. Generally, benefits and wage supplements include, but are not limited to, reimbursement for expenses; health, welfare and retirement benefits; and vacation, separation or holiday pay. Prior to this amendment, the law did not apply to employees employed in an executive, administrative or professional capacity who earned more than $600 per week. Effective Jan. 14, 2008, the pay threshold under Article 6 for exempt executive, administrative and professional employees increased to $900, thereby increasing an employers' potential exposure to criminal sanctions under '198-c.

Employee Consent for Direct Deposit

Section 192 of the NYLL generally requires that employers must obtain employee consent prior to directly paying or depositing net wages or salary of the employee into a bank or other financial institution. However, employees employed in an executive, administrative or professional capacity who earned more than $600 per week were previously exempt from this “consent” requirement. Effective Jan. 14, 2008, under the amendment, the threshold triggering this exemption increased to $900. As a result, employers will now need to obtain such consents for those employees who had been earning between $600-$900/weekly and for whom their employer did not obtain an affirmative “consent” to implement direct deposit, as well as from all new hires earning less than $900/weekly in order to pay wages via direct deposit.

Other Changes Affecting the Workplace

Meal and Rest Period Violations

Employers will now be subject to civil monetary penalties, in addition to criminal penalties, for violations of NYLL ” 161 and 162, which govern rest and meal period requirements, respectively. New York law requires that many employers allow every employee at least one period of 24 consecutive hours of rest in any calendar week, as well as at least a 30-minute meal break period. N.Y. Lab. Law ” 161, 162. Thus, ' 161 of the NYLL, generally, provides one day of rest in seven for employers operating factories, hotels, restaurants, and mercantile establishments (e.g., retail stores). This section also extends this protection to certain categories of workers employed in warehouses, office buildings, and apartments. At the same time, it excludes specific employers (e.g., dairies, certain employers operating theatre or movie productions, and certain resorts or hotels). The statute does not appear to extend its reach to employers in certain service industries such as law, accounting, or financial services. Factory workers are entitled to a one-hour meal period. By statute, the Commissioner of Labor has been granted authority to permit a shorter meal period. NYLL ' 162.5. Moreover, workers who commence work before 11:00 a.m. and work later than 7:00 p.m. must receive an additional meal period of at least 20 minutes between 5:00 p.m. and 7:00 p.m.. The statute has other specific requirements governing the length of meal periods. Upon application from employers, the Commissioner of Labor is authorized to grant exceptions and variations.

According to the Division of Labor Standards Guidelines, even exempt staff are entitled to a meal period. While employers have been subject to criminal sanctions for violations of these provisions, the legislature found this a weak deterrent because of prosecutorial disinterest and lax enforcement. Under the new amendments, ” 161 and 162 are included as punishable offenses under ' 218 of the Labor Law. Effective immediately, failure to comply with New York's meal and rest period requirements may result in civil fines of up to $1,000 for the first violation, $2,000 for the second violation, and $3,000 for the third and subsequent violations. In light of the above, and given the increased enforcement activity in New York, employers might well consider keeping proper records identifying meal and rest periods for employees.

Time Off to Express Breast Milk

Effective Aug. 15, 2007, employees have the right to express breast milk at work and employers are required to make reasonable efforts to provide a location for a woman to do so in privacy. (See “Workplace Lactation,” by John D. Shyer and Allison M. Herron, in the August Issue of Employment Law Strategist, http://www.lawjournalnewsletters.com/issues/ljn_emplaw/16_4/news/150860-1.html.) With this law, New York joins 13 other states (including California, Connecticut and Illinois) that have similar laws requiring accommodations for and/or providing protection for nursing mothers who wish to work. New York employers are well advised to designate an appropriate room for the aforementioned purposes and may want to create a policy for accommodating nursing mothers.

Time Off for Blood Donation

An amendment to the NYLL now requires that an employer with more than 20 employees must grant three hours' leave in any 12-month period to any employee who works 20 or more hours per week and seeks to donate blood. N.Y. Lab. Law ' 202-j. The new law does not specify whether such leave must be paid.

The statute authorized and directed the Commissioner of Labor to establish any necessary guidelines, including notice requirements, prior to its Dec. 13, 2007 effective date. The new law also prohibits retaliation against any employee for requesting or obtaining leave under this section. An employer must provide time off for blood donation in addition to time off allowed under any other provision of law.

Conclusion

As you can see, the New York Legislature has been busy effecting changes in the workplace, improving and increasing worker protections and subjecting employers to increased civil penalties for infractions thereof. Employers should review their policies and practices to ensure compliance.


Elise M. Bloom, a partner in the Labor and Employment Law Department of Proskauer Rose LLP, is experienced in representing and advising clients in a wide range of general employment, disability and wage and hour issues. She also regularly conducts training programs on the full spectrum of employment issues as well as on diversity issues. Fredric C. Leffler is Senior Counsel to Proskauer Rose LLP and represents major private and not-for-profit employers in all aspects of labor and employment law. Thomas A. McKinney, an associate at the firm, has experience handling a wide variety of labor and employment law issues, including employee benefit matters.

Part One of this article discussed the changes in New York Labor Law (NYLL) pertaining to commissioned sales personnel. The conclusion herein addresses the other changes made by the law.

Change in the Wage Threshold for Exemption

New amendments to the NYLL expand the NYSDOL's jurisdiction and enforcement capabilities by enlarging the pool of covered employees subject to the protections afforded under Article 6. In this regard, the amendments to NYLL ” 190(7), 192(2), and 198-c(3) increased the weekly wage threshold that exempts those individuals employed in an executive, administrative or professional category from coverage under certain provisions of Article 6 to $900 a week, up from $600 a week. Consequently, most workers who make less than $900/week, even if employed in an exempt capacity, are now protected under various sections of Article 6, expanding the pool of workers on whose behalf enforcement actions can be brought. Moreover, employees subject to Article 6 have a private right of action as well.

Before the amendments, the legislature was of the opinion that “if an employee who makes more than $600 per week files a wage claim complaint, the Department cannot take the complaint because such an employee is exempt from Article 6, which covers payment of wages. As a result, the Department cannot bring enforcement actions against their employers for failing to provide benefits or wage supplements. Since the last increase in the weekly wage threshold, to $600 in 1992, the average weekly wage in New York State has increased considerably. [These amendments] would increase the weekly wage threshold to $900, which more accurately reflects the current average weekly wage in the State. It will also expand the Department's jurisdiction, enabling the Department to investigate and recover wages for more individuals.”

Seeking to increase protections, the Legislature raised the threshold for coverage so that enforcement actions could be brought against employers who failed to provide timely benefits and wage supplements. Importantly, however, it should be noted that the new amendments do not affect the requirement (pursuant to Article 19, ' 652 of the NYLL and the regulations enacted thereunder) that bona fide executive, administrative and professional employees be paid only a minimum of $536.10 per week to be exempt from New York State overtime requirements.

Increased Exposure to Wage Claims

Effective Jan. 14, 2008, as a result of the amendment to the definition of “clerical and other worker,” ' 190(7), an employee who earns less than $900 per week, can pursue a claim for unpaid wages under ' 198, regardless of his/her status as executive, administrative and professional employees. As noted above, this is of particular importance because ' 198 provides for the recovery of unpaid wages, attorneys' fees, and liquidated damages of 25% of the total amount of wages found to be due, plus interest.

Increased Exposure to Criminal Penalties for Benefits and Wage Supplements

Employers will be subject to scrutiny for failure to provide timely benefits and wage supplements to a larger group of employees. Under ' 198-c of the Labor Law, employers that fail to pay or provide accrued or earned benefits or wage supplements to employees within 30 days after such payments are due can be found guilty of a misdemeanor. Generally, benefits and wage supplements include, but are not limited to, reimbursement for expenses; health, welfare and retirement benefits; and vacation, separation or holiday pay. Prior to this amendment, the law did not apply to employees employed in an executive, administrative or professional capacity who earned more than $600 per week. Effective Jan. 14, 2008, the pay threshold under Article 6 for exempt executive, administrative and professional employees increased to $900, thereby increasing an employers' potential exposure to criminal sanctions under '198-c.

Employee Consent for Direct Deposit

Section 192 of the NYLL generally requires that employers must obtain employee consent prior to directly paying or depositing net wages or salary of the employee into a bank or other financial institution. However, employees employed in an executive, administrative or professional capacity who earned more than $600 per week were previously exempt from this “consent” requirement. Effective Jan. 14, 2008, under the amendment, the threshold triggering this exemption increased to $900. As a result, employers will now need to obtain such consents for those employees who had been earning between $600-$900/weekly and for whom their employer did not obtain an affirmative “consent” to implement direct deposit, as well as from all new hires earning less than $900/weekly in order to pay wages via direct deposit.

Other Changes Affecting the Workplace

Meal and Rest Period Violations

Employers will now be subject to civil monetary penalties, in addition to criminal penalties, for violations of NYLL ” 161 and 162, which govern rest and meal period requirements, respectively. New York law requires that many employers allow every employee at least one period of 24 consecutive hours of rest in any calendar week, as well as at least a 30-minute meal break period. N.Y. Lab. Law ” 161, 162. Thus, ' 161 of the NYLL, generally, provides one day of rest in seven for employers operating factories, hotels, restaurants, and mercantile establishments (e.g., retail stores). This section also extends this protection to certain categories of workers employed in warehouses, office buildings, and apartments. At the same time, it excludes specific employers (e.g., dairies, certain employers operating theatre or movie productions, and certain resorts or hotels). The statute does not appear to extend its reach to employers in certain service industries such as law, accounting, or financial services. Factory workers are entitled to a one-hour meal period. By statute, the Commissioner of Labor has been granted authority to permit a shorter meal period. NYLL ' 162.5. Moreover, workers who commence work before 11:00 a.m. and work later than 7:00 p.m. must receive an additional meal period of at least 20 minutes between 5:00 p.m. and 7:00 p.m.. The statute has other specific requirements governing the length of meal periods. Upon application from employers, the Commissioner of Labor is authorized to grant exceptions and variations.

According to the Division of Labor Standards Guidelines, even exempt staff are entitled to a meal period. While employers have been subject to criminal sanctions for violations of these provisions, the legislature found this a weak deterrent because of prosecutorial disinterest and lax enforcement. Under the new amendments, ” 161 and 162 are included as punishable offenses under ' 218 of the Labor Law. Effective immediately, failure to comply with New York's meal and rest period requirements may result in civil fines of up to $1,000 for the first violation, $2,000 for the second violation, and $3,000 for the third and subsequent violations. In light of the above, and given the increased enforcement activity in New York, employers might well consider keeping proper records identifying meal and rest periods for employees.

Time Off to Express Breast Milk

Effective Aug. 15, 2007, employees have the right to express breast milk at work and employers are required to make reasonable efforts to provide a location for a woman to do so in privacy. (See “Workplace Lactation,” by John D. Shyer and Allison M. Herron, in the August Issue of Employment Law Strategist, http://www.lawjournalnewsletters.com/issues/ljn_emplaw/16_4/news/150860-1.html.) With this law, New York joins 13 other states (including California, Connecticut and Illinois) that have similar laws requiring accommodations for and/or providing protection for nursing mothers who wish to work. New York employers are well advised to designate an appropriate room for the aforementioned purposes and may want to create a policy for accommodating nursing mothers.

Time Off for Blood Donation

An amendment to the NYLL now requires that an employer with more than 20 employees must grant three hours' leave in any 12-month period to any employee who works 20 or more hours per week and seeks to donate blood. N.Y. Lab. Law ' 202-j. The new law does not specify whether such leave must be paid.

The statute authorized and directed the Commissioner of Labor to establish any necessary guidelines, including notice requirements, prior to its Dec. 13, 2007 effective date. The new law also prohibits retaliation against any employee for requesting or obtaining leave under this section. An employer must provide time off for blood donation in addition to time off allowed under any other provision of law.

Conclusion

As you can see, the New York Legislature has been busy effecting changes in the workplace, improving and increasing worker protections and subjecting employers to increased civil penalties for infractions thereof. Employers should review their policies and practices to ensure compliance.


Elise M. Bloom, a partner in the Labor and Employment Law Department of Proskauer Rose LLP, is experienced in representing and advising clients in a wide range of general employment, disability and wage and hour issues. She also regularly conducts training programs on the full spectrum of employment issues as well as on diversity issues. Fredric C. Leffler is Senior Counsel to Proskauer Rose LLP and represents major private and not-for-profit employers in all aspects of labor and employment law. Thomas A. McKinney, an associate at the firm, has experience handling a wide variety of labor and employment law issues, including employee benefit matters.

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