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