Cornell University

April 6 2011

Preventing Wage Theft

Implications of new legislation examined

One of the nation's strongest wage protection laws, the New York State Wage Theft Prevention Act, goes into effect Saturday.

It quadruples penalties, gives greater protection to whistle blowers, strengthens law enforcement and, some say, increases transparency in New York's labor law. Others say the law opens new areas of uncertainty and creates an onerous recordkeeping burden for employers.

ILR's Labor and Employment Law Program brought together plaintiff and management lawyers and enforcement officials to examine the new legislation in the ILR Conference Center in New York last week.

Participants agreed it was necessary to address the money -- close to $1 billion -- stolen from low-income workers each year.

Amy Carroll, a drafter of the new legislation and legal director of Make the Road New York, outlined the act's aims.

Ensuring workers will be protected from retaliation for reporting violations is of great importance, she said. Litigated damages and penalties also needed to be raised to discourage employers from violating the law because it was less expensive than paying the fines, Carroll said.

Presenting the employer's perspective was Stephen A. Fuchs '88, a shareholder of law firm Littler Mendelson, event co-sponsor.

Fuchs reviewed new administrative requirements, including seven-day notice to employees about salary changes; more detailed wage statements, longer record retention and higher penalties. He pointed to areas of uncertainty surrounding acceptable forms of notice and definitions of an exempt employee.

From the New York Department of Labor, Director of Strategic Enforcement Lorelei Salas clarified department regulations and authorities. Responsibility will extend beyond the employer and include threats, as well as actions. Penalties will be increased and employees will be able to bring civil action.

Participants raised many questions about enforcement, including notice to employers and employees about new requirements.  Salas indicated comments and questions made during the session would be reviewed by her office.

Esta R. Bigler '70, director of ILR's Labor and Employment Law Program, said her program is committed to presenting "diverse perspectives on cutting-edge legislation" in order to bring full understanding of workplace law to legal professionals and the public.