Ahead of the Compliance Curve: New York Wage Theft Prevention Act


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New York employers now face a host of new documentation requirements following the passage of the New York Wage Theft Protection Act. Electronic signature solutions are a quick and easy way to comply with the new documentation requirements.

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Ahead of the Compliance Curve: New York Wage Theft Prevention Act

  1. 1. Continued Share:WHITE PAPER New York employers now face new, stringent documentation requirements following the passage of the New York Wage Theft Prevention Act (WTPA). These requirements kick in at the beginning of 2012—and employers need a plan in place to ensure full and legal compliance or risk stiff fines. The WTPA, which went into effect on April 9, 2011, provides more protection to workers and clarifies and expands the Department of Labor’s authority to enforce the Labor Law. The act imposes more stringent notice and record-keeping requirements on New York state employers and brings with it broader fines. Employers may now be liable for civil liability of up to $2,500 per employee for small paperwork violations, and up to $20,000 plus the possibility of criminal penalties for retaliatory activity. The WTPA covers all private sector employers and their employees in the state of New York, as well as charter and private schools and not-for-profit corporations. The act requires that notices be delivered for employees’ signature on these delivery dates: • Annually, between January 1 and February 1 starting in 2012 • Upon hire • If there is a change in position and/or pay The act outlines four areas that employers must comply with: 1. Written notice—The WTPA requires employers to give a written notice to each new hire and to all employees by February 1 each year. Employers must provide detailed notice annually to employees on rates of pay, allowances, basis of wage payment and more. Employers must have each employee sign and date the completed notice. Employers must provide a copy to each employee. 2. Payroll records—Employers must now keep records such as a yearly notice, signed acknowledgement of the notice by employees and payroll records for six years. They must maintain current and accurate wage and hour records, and payroll records must provide detailed information for each week an employee works. 3. Wage statements—Employers must give each employee a wage statement or pay stub each payday that includes payroll data plus additional information, including dates covered by the payment and the employer’s name, address and phone number. Employers are liable for damages of up to $100 per week, per employee. Employees can claim up to $2,500 for wage statement violations in civil lawsuits. 4. Enhanced rules against retaliation—The act now classifies threats as a form of retaliation and makes it illegal for anyone— not just an employer—to retaliate against an employee who makes a complaint. The new law protects employees who mistakenly believed their employer broke a law, allows the Department of Labor to fine retaliatory individuals up to $10,000 and provides other provisions to protect employees. Experienced Productivity from Anywhere, keeping content centralized on Box while extending electronic signature capabilities. The act also provides for higher penalties when an employer fails to pay the wages required by law. As with any law, the various provisions are detailed and complex, so this white paper is not intended to offer legal advice. Rather, it is intended to give employers an overview of the new law and how they can best comply with certain provisions. Ahead of the Compliance Curve: New York Wage Theft Prevention Act The WTPA may require action on your behalf to ensure your company’s compliance and avoid fines.
  2. 2. WHITE PAPER docusign.com Continued New Compliance Requirements and Implications Employers need to focus on four categories that have changed due to the WTPA legislation. • Changes to pay stubs—If any data in the annual notice changes, the employer must tell employees at least a week before it happens— unless they issue a new paystub that carries the notice. Pay stubs can be provided electronically as long as employees can access and print the stub from a work computer. Retroactive wage increases need to be noted separately on pay stubs. • Changes to new hire notices—The notice requirement cannot be waived and must be satisfied via a stand-alone document, though the notice may be included in letters and/or employment agreements provided to new hires. Notice can be provided electronically, as long as the new employee can acknowledge receipt of the notice and print a copy. • Changes to wage and payment notices—Prepare to send out annual notices that meet new WTPA requirements starting January 1, 2012. Additionally, prepare to store employees’ signed notices for six years. • Changes to fines and penalties for non-compliance/retaliation— Failure to comply with the notice and pay stub requirements can lead to civil liability of up to $2,500 per employee for each type of violation. Employers can be assessed damages by the Department of Labor of $50 per week per worker if proper notice is not given (unless all wages were lawfully paid). Employers can be assessed charges by the Department of Labor of $100 per week per worker ifproper wage statements are not given (unless all wages were lawfully paid). Employers or their agents can be fined up to $10,000 and assessed another $10,000 in liquidated damages for retaliation against employees who file a complaint. The Department can also request reinstatement of the worker and/or compensation for lost wages. There are also potential criminal penalties for retaliation. Sending the Notice: Practical Aspects The New York State Department of Labor is serious about protecting workers, and this new law grants the Department greater power to enforce the law. Because compliance is not an option but a necessity, New York State employers need an action plan as the date for compliance quickly approaches. Start by choosing the notice you will use, being careful to include all the new law’s required elements. Use a template offered by the State Department of Labor or create your own. Employers are not required to use a government template, but they provide a good example of what the notice must contain. Now you must decide how to deliver the notice to each employee. You could print the notice and then mail it, or you could stuff paycheck envelopes to save a separate mailing. These are the means that the human resources department has employed since time immemorial to notify employees of important information. However, mail is difficult to track. Letters do get lost from time to time, and there’s no way to verify that an employee received the notice without the added expense of registered mail. Employees also may not see an additional sheet of paper included with their paycheck. Worse, they may see that piece of paper and ignore it, particularly if previous messages sent in this format have not been applicable or meaningful to them. Additionally, time and money must be factored in. Printing, paper and mailing costs are a real business expense, not to mention the time HR staff will spend folding notices and stuffing envelopes. This process is time-consuming and its results difficult to track—both for the employer and the employee. Workers will have to sign the notice and return it to their employer either by mail or fax, by scanned email or by hand. The burden has now been placed upon employees to return a form without which your organization could be fined thousands of dollars. An easier solution would be to email the notice as a PDF attachment to each employee. This would save on the hard and soft costs outlined above, but the difficulties of tracking remain. Employees would still need to print and sign the document, then scan, fax, mail or hand- deliver the form back to you. Electronic Signature: A Quick, Hassle-Free Option A third solution for delivering WTPA notices is via email enabled with an electronic signature option. Electronic signatures make sense today because so much of our daily lives—both business and personal —is now conducted online. With our “wired” reality in mind, the traditional signature, the last critical piece of business that’s not digital, has only nostalgia in its favor as a viable business tool. A proper electronic signature carries the same weight and legal effect as a traditional paper document signed using pen and ink. In fact, more than ten million people have already electronically signed more than 110 million documents in more than fifty countries using the leading electronic signature provider alone. The New York State Department of Labor clearly states in an opinion letter that notices may be executed electronically so long as certain conditions are met. One of these conditions is to provide the employee access to a company computer to optionally review and print a copy of the notice. In addition, the electronic signature process needs to guarantee that the employee has received and reviewed the notice, and that the employee is aware that his/her actions have legally significant consequences. Electronic signature solutions such as DocuSign can fulfill this condition by providing the ability to conform to the New York State Electronic Signature and Records Act.
  3. 3. WHITE PAPER docusign.com In addition to being legally binding, electronic signatures represent a great time and cost savings. HR staff don’t have to spend time processing paper notices or envelopes; they also won’t have to rekey data or send documents back to have errors fixed. Using an electronic signature solution enables you to automate the entire WTPA notice process. The notices can be sent out in bulk with automatic reminders to employees to speed delivery and response time as well. Electronically signed documents add a reliability factor. As any child who ever claimed, “The dog ate my homework” can attest, paper can be easily lost or damaged. Electronically signed documents are stored—and safely backed up—in the cloud and accessible any time, anywhere. What’s more, cloud storage eliminates the need for new filing cabinets. That saves money as well as space. With the right electronic signature solution in place, notices will be easy to track. Cumbersome checklists and spreadsheets are replaced by a fully automated system that can help you achieve 100 percent compliance by ensuring the proper form is sent out to all the appropriate recipients. Such a system would ensure that employers stay on schedule, both with sending the notice within the correct time frame and gathering the responses. You could track your notices in real time, seeing when they were delivered and completed. For compliance purposes, it’s important to choose a solution that maintains an audit trail and enables you to run reports. If the Department of Labor ever comes knocking, you can offer these reports as proof that you are complying with the WTPA. The benefits of using an electronic signature solution can optionally go even further. Companies can integrate the solution end-to-end with other systems to more fully automate the process. DocuSign, for instance, enables customers to connect its electronic signature solution directly to the systems that provide information required for forms, eliminating the need to upload a spreadsheet in the future. This helps to further integrate the data within an organization’s business workflows. In other words, you can send a document to employees directly from within an internal system such as payroll or HRMS, and even track whether the document has been signed, from within that system. Also, employers can set up the solution to include WTPA notices throughout the year as part of the onboarding process for new hires, as they occur. This process is allowed via electronic means under the WTPA as long as employees’ verification of receipt and understanding is recorded and verifiable. An Action Plan for Painless Compliance With the New York Wage Theft Prevention Act requirements fast approaching, employers need to thoroughly prepare for compliance or risk fines and possible damage to their brand. The first step is to review the new provisions of the WTPA, possibly with the assistance of legal counsel, followed by making detailed changes as necessary to paperwork and processes. WTPA notices must be ready to go out between January 1 and February 1, 2012, which brings up the next step: how to best deliver the notices. Given the online nature of so much of our personal and business lives, it makes sense to leverage the speed and ease of online delivery coupled with electronic signature to automate the entire process. This reliable and legally binding option speeds compliance and reduces both hard and soft costs. However, not all electronic signature solutions are the same, so be sure to vet all vendors to confirm your ability to fully comply electronically. The State of New York passed the Electronic Signatures and Records Act (“ESRA”) in 2001, in order “to facilitate e-Commerce and e-Government in New York State by giving electronic signatures and records the same force and effect as signatures and records produced by non-electronic means.” ESRA provides e-record and e-signature guidelines in the areas of authenticity, integrity, security, and confidentiality. About DocuSign DocuSign® is the global standard for electronic signature® . DocuSign accelerates transactions to increase speed to results, reduce costs, and delight customers with the easiest, fastest, most secure global network for sending, signing, tracking, and storing documents in the cloud. For U.S. inquiries: toll free 866.219.4318 | docusign.com For European inquiries: free phone +44 (0) 800 098 8113 | docusign.com/europe Copyright © 2003-2012 DocuSign, Inc. All rights reserved. DocuSign, the DocuSign logo, “Close it in the Cloud”, SecureFields, Stick-eTabs, PowerForms, “The fastest way to get a signature”, The No-Paper logo, Smart Envelopes, SmartNav, “DocuSign It!”, “The World Works Better with DocuSign” and ForceFields are trademarks or registered trademarks of DocuSign, Inc. in the United States and or other countries. All other trademarks and registered trademarks are the property of their respective holders. Follow Us: