The New York Wage Theft Prevention Act (WTPA), effective April 9, 2011, introduces stringent documentation requirements for employers to ensure compliance or face significant fines. The act mandates detailed employee notices and payroll record-keeping, with penalties for violations ranging from $2,500 to $20,000, including measures against retaliation. Employers are encouraged to leverage electronic signatures for efficient delivery and compliance with the new law as the deadline approaches in early 2012.

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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
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.

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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.

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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.
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