Increases the amount of liquidated damages payable by an employer for failure to pay wages as legally required from 25% to twice the total amount of wages found to be due; authorizes a class action to recover liquidated damages.
BILL NUMBER: S3118A
TITLE OF BILL : An act to amend the labor law, in relation to increasing the amount of liquidated damages for failure to pay wages as legally required
PURPOSE : To ensure compliance with state labor laws regarding payment of wages and fringe benefits by increasing and mandating civil penalties for certain violations.
SUMMARY OF PROVISIONS : Amends section 198, subdivision 1-a, of the labor law to increase liquidated damages on a wage claim from 25 percent to twice the total amount of wages found to be due. Adds provisions that the failure to pay wages either (1) must have persisted for more than thirty days, or (2) involved the failure to pay the wages of ten or more employees.
Adds anew subdivision to section 198 of the labor law to permit a class action wage recovery suit.
JUSTIFICATION : Articles 6 and 19 of the labor law prohibit certain employer actions, and require others, to ensure the workers receive their due and just compensation. Article 19, the Minimum Wage Act, controls the minimum wage. Article 6 determines the time limits within which wages must be paid and requires every employer to pay the full amount of wages, benefits and wage supplements due to employees. Article 6 also prohibits "kick-back" agreements whereby employment is contingent upon the employee returning a portion of wages earned.
Continuing investigations and reports reveal that there has been a proliferation of recent years of illegal garment factory "sweatshops". At least 5,000 now exist in New York, exploiting undocumented workers and others in dangerous factories in immigrant neighborhoods like Chinatown, Washington Heights, Sunset Park and Corona. There is a persistent lack of observance by certain small business owners and "sweat shop" operators with their employees' legal wage and benefits rights. The Apparel Industry Task Force has helped the State Department of Labor collect approximately $12 million in back wages for nearly 30,000 apparel employees in New York.
Wage violations continue in other industries as well. Increased investigations by the State Department of Labor of car washes, beauty salons and other businesses across the state have uncovered thousands of wage violations. Many of these violations involve low wage earners who rely on a full paycheck to support their families. New York's 25% cap on liquidated damages against employers that violate wage laws has not been raised in more than 40 years. Several other states have raised their liquidated damages cap to 200% as proposed in this bill. The present enforcement provisions are not a sufficient deterrent to employers who repeatedly violate the law. Substantial increases in civil penalties violations are, therefore, necessary.
FISCAL IMPLICATIONS : None.
PRIOR LEGISLATIVE HISTORY : 1999/00: A.6864 - S.2807 2001/02: A.851 - S.4073 2003/04: A.1708 - S.637 2005/06: A.6564 - S.1007 2007/08: A.4507 - S.4275
EFFECTIVE DATE : 90 days following enactment.
STATE OF NEW YORK ________________________________________________________________________ 3118--A 2009-2010 Regular Sessions IN SENATE March 11, 2009 ___________Introduced by Sens. HUNTLEY, DIAZ, ESPADA, HASSELL-THOMPSON, ONORATO, OPPENHEIMER, PERKINS, SAMPSON -- read twice and ordered printed, and when printed to be committed to the Committee on Labor -- recommitted to the Committee on Labor in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the labor law, in relation to increasing the amount of liquidated damages for failure to pay wages as legally required THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1-a of section 198 of the labor law, as amended by chapter 372 of the laws of 2009, is amended and a new subdi- vision 4 is added to read as follows: 1-a. On behalf of any employee paid less than the wage to which he or she is entitled under the provisions of this article, the commissioner may bring any legal action necessary, including administrative action, to collect such claim and as part of such legal action, in addition to any other remedies and penalties otherwise available under this article, the commissioner may assess against the employer an additional amount as liquidated damages equal to twenty-five percent of the total amount of wages found to be due, unless the employer proves a good faith basis for believing that its underpayment of wages was in compliance with the law; HOWEVER, IF SUCH UNDERPAYMENT OF WAGES PERSISTED FOR MORE THAN THIRTY DAYS OR INVOLVED A FAILURE TO PAY THE WAGES OF TEN OR MORE EMPLOYEES, THE COMMISSIONER MAY ASSESS AGAINST THE EMPLOYER AN ADDITIONAL AMOUNT AS LIQUIDATED DAMAGES EQUAL TO TWICE THE TOTAL AMOUNT OF WAGES FOUND TO BE DUE. In any action instituted in the courts upon a wage claim by an employee or the commissioner in which the employee prevails, the court shall allow such employee reasonable attorney's fees and, unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law, an additional amount as liquidatedEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01280-04-0 S. 3118--A 2
damages equal to twenty-five percent of the total amount of the wages found to be due; HOWEVER, IF SUCH UNDERPAYMENT OF WAGES PERSISTED FOR MORE THAN THIRTY DAYS OR INVOLVED A FAILURE TO PAY THE WAGES OF TEN OR MORE EMPLOYEES, THE COURT SHALL ALLOW SUCH ADDITIONAL AMOUNT AS LIQUI- DATED DAMAGES EQUAL TO TWICE THE TOTAL AMOUNT OF THE WAGES FOUND TO BE DUE. 4. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, AN ACTION TO RECOVER UPON A LIABILITY IMPOSED BY THIS ARTICLE MAY BE BROUGHT AS A CLASS ACTION. S 2. This act shall take effect on the ninetieth day after it shall have become a law.