wage theft prevention act

Paid off the books? Your employers are (probably) crooks.

If you are being paid off the books, in cash or via personal check, your employer may be breaking the law. And you might be entitled to compensation.

Are you being paid off the books?  Chances are, your employer is breaking New York wage and hour law.  Just by failing to provide you with notifications regarding your wages and legally compliant pay stubs, your employer is breaking the law. 

If you are being paid off the books, you might be entitled to recover as much as $10,000 or more.

New York Labor Law requires employers to provide all employees with a wage notice when they start, spelling out the terms of their compensation.  The penalty for failure to do so can be as high as $5,000. 

New York Labor Law also requires employers to provide all employees with wage statements when they are paid, spelling out their rate of pay, deductions, and other wage-related matters.  The penalty for failure to do so can also be as high as $5,000.

The attorneys at Granovsky & Sundaresh can help you recoup this penalty - and maybe more.  We are experienced and aggressive wage and hour lawyers who fight to make our clients whole.  Not only will we examine whether we can recover these penalties for you, but we will also try to find other avenues to increase your recovery such as unpaid overtime, minimum wage or wrongful termination issues.

Call now. 646-524-6001. We have attorneys standing by to take your call. Or you can e-mail us - all e-mails receive a response within 24 hours.

I am being forced to work off the clock. What should I do?

In general, an employee’s “hours worked” include all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work. All employees must be paid for all time worked. So if your employer is forcing you to work off the clock, you may be entitled to additional compensation (even if you are paid a salary).

Common examples of work off the clock:

  • Your employer asks to you set up, open a store or facility prior to clocking in.
  • Your employer makes you clock out for a meal break, but nonetheless makes you work during that period.
  • Your employer automatically deducts some period of time from your hours (usually for an assumed “break”), but does not compensate you for work you performed during that time.
  • Your employer asks you to clock out and then, after you are clocked out, perform additional work (e.g. cleaning up, shutting down, etc.).

Am I entitled to additional compensation:

Probably. This comes down to a determination of whether an employee is exempt or non-exempt. For further information that should help you determine whether or not you are exempt, these links may be helpful:

What to do if you are being forced to work off the clock:

  • Collect the facts – you need to get a sense of how much you are working off the clock, whether any additional employees are also working off the clock. Get any documents you have about off the clock work together.
  • Contact an employment lawyer – get a better understanding of your rights. We offer a free initial consultation. In most situations involving work off the clock we do not collect a fee unless we get recovery for our client.  Contact us today for a free consultation.

Wage Theft Prevention Act Annual Notice Requirement

On December 29, 2014 Governor Cuomo signed a bill that repealed the Wage Theft Prevention Act annual notice requirement. Essentially, under the New York Wage Theft Prevention Act (WTPA), employers were required to notify and receive written acknowledgement from every worker about their rate of pay, allowances, pay day, etc. before February 1 of each year -- this was the Wage Theft Prevention Act Annual Notice Requirement. Although the Wage Theft Prevention Act Annual Notice Requirement will no longer be effective as of 2015, employers are still required to provide written notice of wage rates to each new hire at the time of hire. Specially, the written notice must include:

  • Rate or rates of pay, including overtime rate of pay (if it applies)
  • How the employee is paid: by the hour, shift, day, week, commission, etc.
  • Regular payday
  • Official name of the employer and any other names used for business (DBA)
  • Address and phone number of the employer's main office or principal location
  • Allowances taken as part of the minimum wage (tips, meal and lodging deductions)

The repeal of the Wage Theft Prevention Act annual notice requirement is cause for celebration for employers in New York as it eliminates a burdensome administrative requirement!  For more information on the Wage Theft Prevention Act, including the recent amendment, please visit the New York Department of Labor's website.

The Companionship Exemption

Effective January 1, 2015, the Federal Fair Labor Standard Act’s minimum wage and overtime protections will extend to workers who provide essential home care assistance to elderly people and people with illnesses, injuries or disabilities. The revisions to the law narrow the definition of “companionship services” (and therefore limit the use of the companionship exemption) and prohibit third party agencies or home health care companies from claiming the companionship exemption. Under the revised rules, the companionship exemption is limited to an individual, family or household employing a home care aide. In order to legally use the companionship exemption and avoid paying a home care aide overtime, such aide must (1) provide “companionship services” to an elderly person or a person with an illness, injury or disability who needs help in caring for himself (2) for at least 80% of the total hours such aide works per week.

The term “companionship services” is defined as the provision of fellowship and protection. The term “fellowship” means to engage the person in social, physical and mental activities and “protection” means to be present with the person in their home or to accompany the person outside of the home in order to monitor his safety.   The Department of Labor has provided examples of activities that satisfy the meanings of “fellowship” and “protection”, which include conversation, games, crafts, accompanying the person on walks, and going on errands, appointments or social events with the person.

The exemption is available even if the aide provides “care” so long as (1) the care is provided attendant to and in conjunction with the provision of fellowship and protection and (2) if it does not exceed 20% of the total hours worked per week. The exemption will not be available and the employee will be entitled to minimum wage and overtime if the employee spends more than 20% of his time per week providing care. “Care” is defined as assistance with activities of daily living, which include dressing, grooming, feeding, bathing, toileting and transferring and instrumental activities of daily living, which include meal preparation, driving, light housework, managing finances, assisting with taking medications and arranging medical care. The exemption is also not available if the employee provides household work that goes beyond the benefit of the elderly person or person with a disability like doing laundry or preparing meals for other household members.   Lastly, the definition of companionship services does not include the provision of medically related services that would typically be performed by trained personnel and if the employee provides any medically related services he will be entitled to overtime pay.

Can a third party home health care agency use the companionship exemption now? No. Under the revised rules any home care aides hired through a third party agency cannot be exempt from minimum wage and overtime coverage. The exemptions for aides who mainly provide “companionship services” or for live-in domestic service employees (as described below) are limited to the individual, family or household using the services and explicitly do not extend to third party providers. Such providers must pay its home care aides (1) an hourly rate that is at least minimum wage (currently $8/hour in New York) and (2) time and a half ($12/hour) for all hours worked in excess of 40 hours per week.

Live-In Domestic Service Employees. Live-in domestic service workers who live in the employer’s home permanently or for a period of time and are employed by an individual, family, or household are exempt from overtime pay but they must be paid minimum wage. However, live-in workers who are solely or jointly employed by a third party must be paid at least minimum wage and overtime pay for all hours worked.  But employers of live-in domestic service workers may enter into agreements to exclude certain time from compensable hours worked (such as sleep time, meal time and other periods of time where the employee is completely free of work duties). Such employers must maintain an accurate record of hours worked by live-in domestic service workers but may require the employee to record his or her hours worked and to submit the record to the employer.

Additional Information. The U.S. Department of Labor has created a portal for both employers and employees regarding the law changes summarized in this memo: http://www.dol.gov/whd/homecare/

If you have any questions regarding the companionship exemption and compliance with the new laws, please do not hesitate to contact us.

NY Labor Law Legislation Update

On September 7, 2012, Governor Cuomo signed legislation amending New York Labor Law §193.   The amendment goes into effect on November 6, 2012. Section 193 of the New York Labor Law prohibits employers from making “any deduction from the wages of an employee,” except for (1) deductions required by law or (2) deductions that are expressly authorized by the employee in writing and “are for the benefit of the employee.”  The second exception permits deductions for insurance premiums, pension or health benefits, charitable contributions, and dues for labor organizations, as well as other limited deductions.

The amendment expands the list of categories for which deductions may be taken by employers with an employee’s written consent and allows deductions for overpayments due to clerical or mathematical errors or for repayment of advances on wages or vacations paid to employees.

The permissible deductions under the amendment shall now include the following:

●             prepaid legal plans;

●             purchases made at events sponsored by a charitable organization affiliated with the employer;

●             discounted parking or discounted passes, tokens, fare cards, vouchers, or other items that entitle the employee to use mass transit;

●             fitness center, health club, and/or gym membership dues;

●             cafeteria and vending machine purchases made at the employer’s place of business, and purchases made at gift shops operated by the employer (if the employer is a  hospital, college, or university);

●             pharmacy purchases made at the employer’s place of business;

●             tuition, room, board, and fees for pre-school, nursery, primary, secondary, and/or post-secondary educational institutions;

●             day care, before-school and after-school care expenses;

●             payments for housing provided at no more than market rates by non-profit hospitals or affiliates thereof; and

●             similar payments for the benefit of the employee.

Most significantly, the amendment allows employers to make wage deductions to recover “an overpayment of wages where such overpayment is due to a mathematical or other clerical error by the employer” and “repayment of advances of salary or wages made by the employer to the employee.”

Under the amended law, deductions still are permitted only if expressly authorized in writing, signed by the employee and if the deductions are, generally, for the benefit of the employee.  The amendment requires that, before any deduction is made, the employee must receive “written notice of all terms and conditions of the payment and/or its benefits and the details of the manner in which deductions will be made.”

 

Administrative Exemption to Overtime Pay

Both the Fair Labor Standards Act (“FLSA”) and the New York Minimum Wage Act (“NYMA”) generally require the payment of overtime wages for work performed after 40 hours per week.  For some general information on overtime and misclassification issues, please see our prior blog posts here, here and here. The FLSA and the NYMA exempt employees who work in a bona fide administrative capacity from the overtime pay requirements.

To meet the Administrative Exemption (and therefore have no entitlement to overtime pay), each of the following must be true:

  1. The Employee’s primary duty consists of the performance of office or non-manual field work directly related to management policies or general operations;
  2. The Employee customarily and regularly exercises discretion and independent judgment;
  3. The Employee regularly and directly assists an employer or an employee employed in a bona fide executive or administrative capacity or who performs under general supervision, works along specialized or technical lines requiring special training, experience or knowledge; and
  4. The Employee is paid for his or her services on a salary basis of not less than $543.75 per week.

If you believe you have incorrectly been classified as exempt from overtime pay, you should contact one of our NY Overtime Pay Attorneys.

Overtime Violations and Misclassification Issues

OVERTIME VIOLATIONS Unless you are specifically classified as an “exempt” worker, your employer must pay you overtime wages for any hours you work over 40 hours in a workweek (see this prior blog entry). Your employer must pay overtime wages at a rate of at least one and one-half times (150%) your regular hourly rate.

Your employer cannot avoid paying overtime by enacting a no-overtime policy or by getting you to agree to a special deal.  Your employer must pay you according to the law.  Set forth below are some common overtime violations:

Unpaid or Improperly Calculated Overtime Pay

Overtime rules are generally based on a single workweek. If you are a non-exempt employee, you may be paid weekly, bi-weekly, or monthly.  But, your employer must calculate overtime based on the actual 40-hour workweek (the pay period does not matter).  Employers cannot average hours over two or more weeks.  Likewise, your employer cannot get you to agree not to follow the overtime rules.

Comp Time Instead of Overtime Pay

Compensatory time is paid time off generally granted to an hourly employee instead of overtime wages.  This is often referred to as "comp time."  Comp time can sometimes be legal, but the employer must pay it at 150%, which is the same rate as overtime wages.

Employees Not Allowed to Report Work over 40 Hours Per Week

Many employers have rules that no overtime work will be permitted or paid for unless authorized in advance.  Some employers choose to ignore overtime hours worked by their employees or do not allow employees to report their overtime hours. These are violations of the overtime rules.

MISCLASSIFIED EMPLOYEE VIOLATIONS

In today’s tough economy, employers face increasing pressure to lower wage and benefit costs. Not surprisingly, some employers do not obey the rules regarding classification of employees, which classification dictates whether its employees are entitled to overtime.

Has your employer not paid you overtime because you are an “exempt” employee? Or, has your employer not paid you overtime and benefits because you are a contract employee or independent contractor?   Your employer may have misclassified you.  And if so, you are losing out on the pay and benefits you deserve.

Misclassification of Employees as Exempt Workers

Exempt employees are employees who are not entitled to receive overtime pay.  Whether or not you are exempt can be confusing.  However, it has nothing to do with your job title or job description, or whether you are paid a salary or hourly. What you actually do at your job on a daily basis determines whether or not you are legally entitled to overtime.  For additional information, please visit www.dol.gov/whd/overtime_pay.htm.

Misclassifaction of Employees as Contract Employees

Contract employees or independent contractors include self-employed workers who are not covered by the tax and wage laws that apply to regular employees. Employers do not pay Social Security, Medicare, or federal unemployment insurance taxes on contract employees or independent contractors.  Thus, employers are strongly motivated to classify workers into this category to save costs.

Whether you qualify as an employee or an independent contractor is not an easy matter.  Three factors are key in determining this:

1.  Control:  Does the company control what you do and how you perform your duties? 2.  Financial:  Do you or the company set the business aspects of your work (method of payment, reimbursement of expenses, etc.)? 3.  Relationship:  Do you have a written contract? Do you receive employee-type benefits, such as a pension plan, insurance, or vacation pay? How long have you been at the company?

You are probably an employee and not an independent contractor or contract employee if the company controls what you do and how you do it, and treats you like other regular employees.  If so, you may be missing out on valuable overtime wages and employee benefits.  For more information on this issue, please see http://www.comptroller.ilstu.edu/downloads/20-factor-test-for-independent-contractors.pdf.

Some other common employer pay practices which may violate the law:

  • Paying you a salary and no overtime when you spend less than 50% of your time managing other employees;
  • Paying you a salary and no overtime with a title like assistant manager, assistant branch manager, or working lead;
  • Paying you hourly and not paying you overtime when you work in excess of 40 hours in any work week;
  • Paying you hourly and not paying you for pre-shift or post-shift work time such as uniform and clothes changing time, the time it takes you to prepare your workstation for the day, or clean up time at the end of your shift;
  • Paying you hourly, but asking you to perform work via cell telephone, email, Blackberry, Twitter, Facebook, etc. when you are not clocked in;
  • Paying you hourly, but asking you to work through your breaks and unpaid meal periods without payment;
  • Rounding you work time down to the nearest 15 minute increment (e.g., you clock in at 7:56 am and your employer rounds your time to 8:00 am); or
  • Hiring you as an “independent contractor,” “contract employee,” or “contingent worker” and not paying you overtime or benefits like regular employees.

Please contact us if you believe your employer has violated the law in paying or classifying you.

NY Wage Theft Prevention Act

Employers Beware: the NY Wage Theft Prevention Act is a Potential Misclassification Minefield! The NY Wage Theft Prevention Act, which became effective April 9, 2011, requires all private sector employers with New York employees (regardless of how many) to provide those employees with a "pay notice" at the time of hire and, subsequently, on a yearly basis. The notice must be in English and the employee’s primary language.  The notice can be paper or electronic.  Under the Wage Theft Prevention Act, the first annual notice period began January 1, 2012.  The pay notice must contain the following:

Rate of pay (including overtime, if applicable)

  • Method of payment (hourly, shift, day, week, commission, etc.)
  • Regular pay day
  • Official name of the employer, and any d/b/a's
  • Address and phone number of the employer's main office or principal location
  • Any allowances taken as part of the employee's wage (for example, tip, meal and lodging deductions).

Because these notices require an employer to state the method of payment and regular rate of pay, it is critical that the employer understand whether the employee is exempt from overtime.

This annual notice requirement is not a one-time event. Employers must provide these notices every year between January 1 and February 1, even if the information has not changed from the prior year.  The Act further requires that the notices be kept by the employer for six years and available for inspection by the NY Department of Labor.

Classification issues abound here.  If you have any questions about how to classify an employee (e.g., as exempt or non-exempt), or general questions about the Wage Theft Prevention Act contact us.  A mistake can cost you.