Increases the amount of liquidated damages payable by an employer for failure to pay wages as legally required to twice the total amount of wages found to be due; authorizes a class action to recover liquidated damages.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2499
SPONSOR: Robinson TITLE OF BILL: An act to amend the labor law, in relation to increas-
ing 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 196 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 China-
town, 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 investi-
gations 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
2009/10: A.10933 - S.3118A
EFFECTIVE DATE: 90 days following enactment.
STATE OF NEW YORK
________________________________________________________________________
2499
2013-2014 Regular Sessions
IN ASSEMBLY
January 15, 2013
___________
Introduced by M. of A. ROBINSON -- read once and referred to the Commit-
tee on Labor
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:
1 Section 1. Subdivision 1-a of section 198 of the labor law, as
2 amended by chapter 564 of the laws of 2010, is amended and a new subdi-
3 vision 5 is added to read as follows:
4 1-a. On behalf of any employee paid less than the wage to which he or
5 she is entitled under the provisions of this article, the commissioner
6 may bring any legal action necessary, including administrative action,
7 to collect such claim and as part of such legal action, in addition to
8 any other remedies and penalties otherwise available under this article,
9 the commissioner shall assess against the employer the full amount of
10 any such underpayment, and an additional amount as liquidated damages,
11 unless the employer proves a good faith basis for believing that its
12 underpayment of wages was in compliance with the law. Liquidated damages
13 shall be calculated by the commissioner as no more than one hundred
14 percent of the total amount of wages found to be due; however, if such
15 underpayment of wages persisted for more than thirty days or involved a
16 failure to pay the wages of ten or more employees, the commissioner may
17 assess against the employer an additional amount as liquidated damages
18 equal to twice the total amount of wages found to be due. In any action
19 instituted in the courts upon a wage claim by an employee or the commis-
20 sioner in which the employee prevails, the court shall allow such
21 employee to recover the full amount of any underpayment, all reasonable
22 attorney's fees, prejudgment interest as required under the civil prac-
23 tice law and rules, and, unless the employer proves a good faith basis
24 to believe that its underpayment of wages was in compliance with the
25 law, an additional amount as liquidated damages equal to one hundred
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00217-01-3
A. 2499 2
1 percent of the total amount of the wages found to be due; however, if
2 such underpayment of wages persisted for more than thirty days or
3 involved a failure to pay the wages of ten or more employees, the court
4 shall allow such additional amount as liquidated damages equal to twice
5 the total amount of the wages found to be due.
6 5. Notwithstanding any other provision of law, an action to recover
7 upon a liability imposed by this article may be brought as a class
8 action.
9 § 2. This act shall take effect on the ninetieth day after it shall
10 have become a law.
