October 25, 2014

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Proposed New York Bill Increases Penalties for Wage Withholding

In January 2013, Democratic Assemblywoman, Annette Robinson, introduced a bill that would allow employees who are underpaid to recover up to twice the amount of wages due in liquidated damages and to seek such damages through a class action lawsuit.

The proposed bill (A2499) amends current labor law, targeting employers who fail to pay employees their legally owed wages. If such underpayment of wages persists for more than thirty days or involves ten or more employees, then the affected employees would be able to seek liquidated damages that are twice the amount due in addition to repayment of wages owed. Additionally, the bill would authorize such employees to form a class action to recover the appropriate damages.

The bill has been referred to the Assembly Committee on Labor, and must pass standard bureaucratic hurdles before becoming enacted. If signed into law, the bill would officially take effect 90 days later.

The proposed legislation mirrors a similar bill (A5381) passed by the New Jersey Assembly in December 2012 that we previously reported on here. The New Jersey bill would only obligate employers to pay liquidated damages of up to 100% of any wages owed, with additional fines possible based on the number and frequency of the offenses. The New Jersey Senate has since referred the bill to its Labor Committee. Although neither bill has passed, they both have significant financial implications for employers in New York and New Jersey. We will continue to monitor the progress of both bills and update you accordingly.

*Brian Garrett, co-contributor to this article, is a law clerk at Sheppard, Mullin, Richter & Hampton LLP currently admitted to the New Jersey Bar and awaiting admission to the Bar of the State of New York.

Copyright © 2014, Sheppard Mullin Richter & Hampton LLP.

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