Last month, the New York Legislature passed a bill which, if accepted by Governor Kathy Hochul, would expand the rights for executive, administrative, and professional employees to file complaints with the New York Department of Labor (“NYDOL”) for wage theft.[1] Wage theft occurs when pay earned and owed to an employee is withheld by an employer.[2] The most prevalent example of wage theft is paying less than the legally mandated minimum wage, but it can also include not being paid for the full hours worked, missed overtime payments, and misclassifying employees as independent contractors.[3]
Currently, there are notable differences between federal and NY state wage theft laws and available remedies. On the federal level, there is not a specific wage theft law, but efforts have been made to address the issue.[4] The Wage Theft Prevention and Wage Recovery Act, introduced to Congress in 2019, aims to combat wage theft and “facilitate the recovery of stolen wages.”[5] The Fair Labor Standards Act (“FLSA”) is the primary federal legislation protecting workers from wage theft and other violations.[6] It establishes federal minimum wage and overtime pay requirements.[7] Under the FLSA, individual employees and the NYDOL can file claims against employers in court requesting, among other things, back pay, overtime, and liquidated damages for wage-related disputes.[8]
Article 6 of the New York Labor Law, titled, “Payment of Wages” establishes specific requirements concerning the wages of private sector employees.[9] One essential aspect of this law is that it forbids employers from wrongfully withholding wages from their employees who are employed within the state.[10] If an employer does violate this law, employees who have been affected can act either by pursuing a private legal claim against the employer or filing a complaint with the NYDOL to recover wages owed to them.[11] However, many provisions of the state law exclude employees in executive, administrative, and professional positions whose earnings exceed $900 per week.[12] Employees who earns above this threshold are limited to filing private civil court actions in an attempt to recover their earnings.[13]
On June 7th, the New York legislature passed a new bill which would expand the weekly wage threshold for NYDOL complaints made by executive, administrative, and professional employees.[14] This bill increases the earnings threshold from $900 to $1,300 per week.[15] Accordingly, executive, administrative, and professional employees making $1,300 or less per week will no longer be confined to private civil court action in attempts to recover owed wages.[16] Employees who meet this earnings threshold will now be able to file complaints with the NYDOL who can commence investigations and recover such employees owed wages.[17]
The new bill does not alter minimum salary requirements for classifying employees as exempt under the NY Labor Law.[18] Instead, the bill only pertains to the requirements for filing a complaint with the NYDOL.[19] Additionally, the new bill specifically makes clear that the following provisions under Article 6 now apply to executive, administrative, and professional employees making a salary less than $1,300 per week: (1) employers must obtain advance consent from employees for payment via direct deposit and (2) employers are required to pay all wages and benefits owed to employees in a timely manner, with added penalties for employer non-compliance.[20]
Employers in New York should reevaluate their payment practices concerning executive, administrative, and professional employees to ensure they are in compliance with both current and forthcoming requirements.
[1] Michael Paglialonga & William H. Ng, “New York Legislature to Increase Executive, Administrative, and Professional Compensation Threshold, Expanding Certain Wage Payment Protections.” Littler, June 13, 2023, https://www.littler.com/publication-press/publication/new-york-legislature-increase-executive-administrative-and [Hereinafter New York Legislature].
[2] 17 No. 5 FLSA Emp. Exemption Handbook Newsl. 10.
[3] Id.
[4] Actions – S.2101 – 116th Congress (2019-2020): Wage Theft Prevention and Wage Recovery Act, S.2101, 116th Cong. (2019), https://www.congress.gov/bill/116th-congress/senate-bill/2101/actions.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Ashley N. Ehman & Daniel I. Small, “New York to Increase Wage Protections for Executive, Administrative, and Professional Employees.” Seyfarth, June 23, 2023, https://www.seyfarth.com/news-insights/new-york-to-increase-wage-protections-for-executive-administrative-and-professional-employees.html [Hereinafter New York to Increase Wage Protections].
[10] Id.
[11] Id.
[12] Id.
[13] Id.
[14] New York to Increase Wage Protections, Supra Note 9.
[15] Id.
[16] Id.
[17] Id.
[18] New York Legislature, Supra Note 1.
[19] Id.
[20] Id.
