Employment Law Watch : Employment & Labor Lawyer & Attorney : Reed Smith Law Firm

Increased Notice Requirements       

• Notice Obligation Now Continuous
  • Employer must issue new employees notices at the time of hiring describing their rate of pay, pay date, and overtime rate (if applicable).
  • Employer must issue all employees noticeswith the same type of information by February 1 of every subsequent year after hiring.
•  More Content Required in Notices
  • Notices must now include detailed wage statements specifying the applicable dates the wages cover, regular and overtime hours worked (if applicable), the rate(s) of pay (regular and overtime, if applicable), and other data, including:
    • The basis of the wage payment (e.g., whether the employee will be paid by the hour, shift, day, week, salary, piece, or commission, or on another basis)
    • The employer’s intent to claim allowances (e.g., tip or meal allowances) as part of the minimum wage
    • The employer’s main address and phone number
    • Additional information about the employer, including any d/b/a names
• Timing of Notices
  • Employers must notify employees of any changes to the foregoing information seven days before the changes take effect, unless the employer reflects the changes in the information to be required with every wage payment. 
• Notices Must Be Signed
  • Notices must be signed and acknowledged by the employee each time they are received, in English or in the employee’s language. 
• Recordkeeping Requirement
  • Employers must now maintain payroll records for at least six years.

Increased Penalties for Wage Payment Violations and Retaliation

• Significantly Increased Damages
  • An employer’s failure to provide the notice within 10 business days of an employee’s hire date subjects the employer to an action for damages of $50 per work week, to a maximum of $2,500, plus costs, attorneys’ fees and injunctive relief. 
  • Strong penalties are also imposed on employers who fail to provide employees with the wage information in each payroll statement, which includes damages of $100 per work week, to a maximum of $2,500, plus costs, attorneys’ fees and injunctive relief.
  • Increased penalties may be levied against employers for retaliation against an employee who complains about conduct the employee reasonably and in good faith believes is a violation of the wage payment laws. In addition to reinstatement, back pay, and front pay, retaliation victims can collect liquidated damages of up to $10,000. 
  • While an employer can avoid these penalties if it made complete and timely payment of all wages to the employees in question, or if the employer reasonably believed in good faith it was not required to provide the notice, employees aware of violations, by allowing damages to grow each week, may have the incentive to not report notice violations until months after the fact.
  • Furthermore, the New York Commissioner of Labor can now seek attorneys’ fees and liquidated damages of 100 percent of the total unpaid wages due (up from 25 percent). Whereas the Commissioner of Labor previously had discretion to seek liquidated damages, s/he now must seek liquidated damages and must seek recovery of the full amount of underpayment.
  • Repeat offenders and employers whose violations are found to be “willful or egregious” are now subject to treble damages: double the wages due, plus liquidated damages of 100 percent. 
• Other Penalties
  • Violations of the New York wage payment law now may now result in the offending employer being required to post a notice of the violation in the workplace and, if the violation was willful, the notice must be posted in an area visible to the general public for up to 90 days. 
  • New York’s Commissioner of Labor may now require an accounting of assets by the employer if it fails to comply with an order.
• Criminal Fines and Imprisonment
  • Officers and agents of corporations, partnerships or LLCs who knowingly allow wage payment violations to occur may now be held criminally liable and are subject to fines of up to $20,000 and/or imprisonment of up to one year and one day.

Going Forward

Wage and hour violations will be more costly than ever in New York. Reed Smith can assist you in ensuring compliance and mitigating harm to your business from New York Department of Labor investigations. Please contact David Weissman, Cindy Schmitt Minniti, or Daniel Schleifstein to discuss questions you may have about this or any other employment issue.

New Enforcement Methods and Civil Penalties

Employees may file claims under the Wage Payment Act with the Illinois Department of Labor ("IDOL") or by bringing suit in state court.  The Wage Theft Enforcement Act makes clear that employees may bypass the IDOL and proceed directly to court, and that such suits may be brought as individual or class actions.  In addition, while current IDOL hearings are relatively informal conferences, the IDOL has now been given the power to establish a formal procedure to adjudicate claims, in final and binding administrative decisions, where the amount sought is no more than $3,000 per employee, including cases where an employer fails to respond to a claim within the short 10-day deadline set by IDOL rules.

The new law also provides additional fees and penalties for employers who lose before the IDOL or in court.  If an employee prevails before the IDOL, then the employer, in addition to any wages that it owes, must pay a $250 administrative fee to the IDOL.  If the IDOL demands or orders that an employer pay any wages, and the employer fails to comply or appeal within 15 days, it must also pay the IDOL a penalty of 20 percent of the total amount owed regardless of the length of the delay, and pay the employee 1 percent of the amount owed for each day it delays payment past the 15th day.  The IDOL may sue the employer to recover any such amounts.

If an employee chooses to proceed in court and prevails, the employer will be required to pay the employee not only his or her wages, but also damages equal to 2 percent of the amount of underpayments for each month past the date on which the wages were due, as well as the employee's court costs and reasonable attorney's fees.  Finally, if the employer fails to comply with or appeal the court order within 35 days, it must pay the IDOL a penalty of 20 percent of the total amount owed, and also pay the employee 1 percent of the amount owed for each day it delays payment.

Enhanced Criminal Penalties

Under the new law, any employer or agent of an employer who willfully refuses to pay wages when due, has committed a Class B Misdemeanor if the amount due is $5,000 or less, and a Class A Misdemeanor for larger amounts, with each day during which any violation continues treated as a separate offense.  If within two years of being convicted of such a crime an employer or agent of an employer again violates that part of the law, it is guilty of a Class 4 felony.  The penalties for such crimes are significant:  each Class A misdemeanor offense is punishable by one year in jail plus a $2,500 fine, while each Class 4 felony offense is punishable by three years in prison plus a $25,000 fine.

New Remedies for Retaliation

The Wage Payment Act now provides that it is a Class C misdemeanor for an employer or agent of an employer to knowingly discharge or discriminate against an employee because the employee complains about unpaid wages to the employer or the IDOL; because an employee has brought a claim seeking to recover such amounts; or because an employee has testified or plans to testify in such a proceeding.  The new law removes the "knowingly" requirement, expands coverage to protect employees who complain in a public hearing or to a community organization, and - most importantly - adds a civil remedy, allowing employees to file retaliation claims with the IDOL or in court to recover "all legal and equitable relief as may be appropriate," as well as costs and reasonable attorney's fees.

Questions

If you have any questions about your obligations with respect to the payment of wages, salaries, bonuses, or vacation pay to any Illinois employees, or how to deal with any such employee who has complained about not being paid all amounts he or she believes are due, please contact the author of this alert or any Reed Smith attorney with whom you regularly work.