Labor Law Obligations to Employees
DOING BUSINESS IN
NEW YORK STATE
A GUIDE FOR SMALL BUSINESSES
Payment of Wages
Who Is An Employee?
What Are Wages?
How Frequently Must Wages Be Paid?
Clerical and Other Workers
Payment Of Wages To Terminated Employees
Deductions From Wages
Kickbacks From Wages
Record Keeping Requirements
Payment Of Benefits Or Wage Supplements
Employment Of Minors Under The Age Of Fourteen
Employment Of Minors Fourteen Or Fifteen Years Of Age
Employment Of Minors Sixteen Or Seventeen Years Of Age
Prohibited Employment Of Minors
Duties Of Employers
An employer's obligation to pay wages to his employees is defined in article six of the New York State labor law. Employees who are covered by the labor law may seek enforcement by the Attorney General of their wage claims. Persons not covered by the labor law must seek private legal redress.
Who Is An Employee? : Article six defines an employee as any person employed for hire by an employer in any employment. Unless an employer-employee relationship exists between the person claiming payment for services rendered and the person from whom payment is claimed, the provisions of the labor law do not apply. Independent contractors are not protected by the labor law and are not entitled to state enforcement of their claims for payment. Although there is extensive case law on the subject of what constitutes an employer-employee relationship, the issue is not always clear and determinations on similar facts and circumstances may differ among the various bodies which are called upon to make such determinations.
The extent of supervision and control exercised over the service provider, whether or not the service provider is engaged in a business of his own, whether or not he may simultaneously provide services for other clients and other factors are among those which will be examined to determine whether or not an employment relationship exists. An agreement between the parties that the person providing services will operate as an independent contractor is not necessarily binding and attempts to characterize persons as independent contractors who are working under circumstances that create an employment relationship by paying them "fees" from which payroll taxes are not deducted will fail.
How Frequently Must Wages Be Paid? : Manual workers (mechanics, laborers, workingmen) must be paid their full wages weekly and not later than seven days after the end of the week in which they were earned. A "lag" payroll of more than one week for manual workers is a violation of the labor law.
Commission salespersons (persons engaged principally in selling goods or services whose earnings are based in whole or in part on commissions) must be paid all their salary and commissions in accordance with the agreed terms of employment, but in no event less frequently than once each month and not later than the last day of the month following the month in which they were earned.
Clerical and other workersworkers (all other employees except those employed in an executive, administrative or professional capacity and earning more than $600 per week) must be paid all their salary in accordance with the agreed terms of employment, but in no event less frequently than semimonthly.
Payment of Wages To Terminated Employees: Wages to terminated or otherwise separated employees must be paid no later than the regular pay day for the period during which the wages were earned. If the employee so requests, the wages must be mailed.
Deductions from Wages: No deductions may be made from wages paid to an employee except those required by law or government rules and regulations (e.g., payroll taxes, child support orders, wage garnishments), except those which are expressly authorized, in writing, by the employee and are for that employee's benefit. Nor may an employer require an employee to make any payment by separate transaction, unless such a payment would be permitted as a deduction from wages. Such authorized deductions are limited to insurance premiums, charitable contributions, pension, health and welfare benefit payments, union dues, United States bond purchases and payments for similar purposes.
It is a violation of the labor law for an employer to make any other deduction from an employee's wages. For example, if an employee takes or damages property belonging to the employer, the employer may not recoup the value of that property by withholding all or a portion of that employee's wages. The employer, like any other party aggrieved by the negligent or criminal behavior of another, must pursue whatever remedies are available at law. He may not simply confiscate wages due to his employee without a court order permitting him to do so.
An employer is not obliged to pay an employee for hours that he did not work, but in making a deduction from wages for lateness or absence, may deduct only the value of the time missed; the deduction of a penalty for lateness or absence is illegal. Nor may an employer make a deduction from wages because he judges the employee's work to be deficient.
Kickbacks From Wages: It is illegal for an employer or any of his agents to request, demand or receive any part of a worker's wages or any other thing of value upon the understanding or representation that failure to comply with the kickback demand will prevent the worker from obtaining or retaining employment.
Record Keeping Requirements: Employers are required to maintain payroll records showing the hours worked, gross wages, payroll deductions and net wages for each employee and must furnish this information to employees with every payment of wages.
Notice Requirements: At the time of hiring, an employee must be notified of his rate of pay and of the regular pay day designated by the employer. In addition, an employer must either post or notify his employees in writing of the employer's policy regarding sick leave, vacation, personal leave, holidays and hours of work.
Payment of Benefits Or Wage Supplements: New York State law does not require an employer to pay or provide fringe benefits or wage supplements unless he has promised to do so. No employee has a statutory right to vacation pay, paid sick leave or employer-provided health insurance.
Under New York state law, it is a crime for an employer to fail to furnish those benefits which he has agreed to pay as part of an employee's total compensation package. An agreement to provide fringe benefits need not be in writing. In agreeing to provide fringe benefits, an employer may establish the conditions under which they will be provided. For example, it is legal for an employer to have a vacation policy which requires that earned vacation not taken during a specified period be forfeited, as long as that condition is not imposed after the vacation was earned. A benefit accrued in accordance with all the conditions attached to it at the time it was offered, cannot thereafter be lost by the imposition of a subsequent condition. Nor may an employer deny earned benefits to an employee because he leaves his employment.
Fringe benefits or wage supplements must be paid or provided within thirty days after they are required by the agreement between the employer and the employee.
Tip Appropriation: An employer may not demand or accept any portion of an employee's tips, nor may an employer require that tips be pooled or that tips received by service employees be shared with non-service personnel.
Provided that it is disclosed to the patron, a restaurant owner may share a portion of the percentage service charge added to the bill for a banquet or other special function with non-service personnel and may reserve a small handling charge there from to the restaurant.
Penalties: A first failure to pay agreed wages and fringe benefits in accordance with the requirements of the labor law is punishable as a misdemeanor. The maximum penalties include fines of up to $20,000 and imprisonment for up to one year for each violation, as well as payment of restitution. A second offense is punishable as a felony, with a maximum fine of $20,000 in addition to imprisonment and payment of restitution.
Officers and agents of defaulting corporate employers who knowingly permit the corporation to default in the payment of wages to its employees are personally, criminally responsible for that default and can be prosecuted, fined, jailed and forced to make restitution, even after the employer corporation is out of business. Nominal officers who are not actively involved in the management of the corporate employer are not exposed to personal criminal liability for the corporation's default.
In addition, the law provides civil remedies which can be exercised either by the Attorney General or by the aggrieved workers themselves. An employee may receive restitution equal to the wages that he or she should have received plus 25% of that amount in liquidated damages if the violation was willful. Under certain circumstances, corporation shareholders and employers who are actively involved in the management of a business may be held personally liable for the unpaid wages.
An employer's obligation to pay the minimum wage to his employees is defined in article nineteen of the New York State labor law and the regulations issued thereunder, which can be found in 12 NYCRR 137-143. Private sector (i.e., non-governmental) employees, with the exception of outside salesmen, baby-sitters, taxicab drivers, camp counselors and those employed in an executive, administrative or professional capacity, are entitled to be paid the minimum wage. Payment of the state minimum wage is enforced by the Attorney General.
State Minimum Wage: The basic minimum wage in New York State is presently $8.00 per hour as of December 31, 2013. In addition to the basic minimum wage, an employer must pay most employees for overtime at the rate of one and one-half times the employee's regular rate of pay for hours worked in excess of forty hours in one workweek. If an employee's normal rate of pay is $8.00 per hour, he must be paid $12.00 for each overtime hour.
Tip Allowance or "Tip Credit": The wage that an employee who earns tips must be paid varies according to industry. A different tip allowance is set in different industries. In the case of the restaurant or hotel industries, differs depending on the employee's job duties. For an employer to use the tip allowance and pay a reduced minimum wage, employees must receive sufficient tip income. These are the minimum wages allowed for tipped workers:
Restaurant or hotel industry, Tipped Worker
Food Service Worker (for example, a waiter)
2011: $5.00 per hour minimum & overtime $8.63 per hour
2014: $5.00 per hour minimum & overtime $9.00 per hour
Service employee (for example, delivery worker)
2011: $5.65 per hour minimum and overtime $9.28 per hour
2014: $5.65 per hour minimum & overtime $9.65 per hour
Any other industry, Tipped Worker (e.g., laundry delivery)
2009: $5.50 per hour minimum and overtime $9.13 per hour
2014: $6.05 per hour minimum & overtime $10.05 per hour
For an employer to use the "tip credit," employees must earn sufficient tips during their shift. For more information, visit the state Department of Labor's website or contact us.
Meal Allowance: An employer who provides meals to an employee may deduct a meal allowance up to the amount set by law. As with the "tip allowance," the cost of the meal varies depending upon the industry and the employee's job duties. For example, in the restaurant industry, as of January 1, 2006 an employer may deduct $2.00 per meal for food service workers who earn a cash wage of at least $4.35 per hour, and $2.30 per meal for all other workers; as of January 1, 2007, a restaurant employer may deduct $2.10 per meal for food service workers who earn a cash wage of at least $4.65 per hour, and $2.45 per meal for all other workers. For meal allowances in other industries, visit the state Department of Labor's website.
Lodging Allowance: Lodging furnished by an employer to an employee may be considered part of the minimum wage paid to that employee. The value of the lodging allowance depends on the industry in which the employee works.
Uniforms: An employer may compel an employee to pay the cost of acquiring or maintaining uniforms required on the job. However, the cost of purchasing and/or maintaining a uniform must not bring the employee below the minimum wage. If workers at the minimum wage rate must wear a uniform, their employers must clean and maintain them or pay the employees to do so. Ordinary clothing (such as black trousers and white shirts) are generally not considered "uniforms."
Penalties: Payment of less than the minimum wage is punishable as a misdemeanor by imprisonment for up to three months and a fine of up to $500 for each week of underpayment. In addition, the offender may be sentenced to make restitution. Officers and agents of defaulting corporate employers are personally, criminally responsible for that default and can be prosecuted, fined, jailed and forced to make restitution, even after the employer corporation is out of business. Nominal officers who are not actively involved in the management of the corporate employer may nevertheless be exposed to personal criminal liability for the corporation's default in the payment of the minimum wage. Civil remedies providing restitution and damages to employers are also provided by the law.
New York State laws restricting the employment of minors (other than child models or performers, whose employment is regulated by article 35 of the arts and cultural affairs law) are located in article four of the labor law The child labor laws are enforced by the Attorney General.
Employment Of Minors Under The Age Of Fourteen: The employment of minors under the age of fourteen in connection with any trade, business or service is prohibited. Exceptions to this prohibition permit newspaper delivery by minors at least eleven years old and certain farm work by minors twelve or thirteen years of age.
Employment Of Minors Fourteen Or Fifteen Years Of Age: The employment of minors fourteen or fifteen years of age in connection with any trade, business or service is prohibited when that minor is supposed to be in school, that is, during the hours when school is in session. At no time may minors of this age be employed in a factory.
When school is not in session, minors fourteen or fifteen years of age who have obtained an employment certificate may be employed in most occupations. An employment certificate is issued by the chancellor in the city school district of the city of New York and by the superintendent of schools in other school districts. Application should be made to the principal of the school the minor attends or last attended.
Notwithstanding the above, minors of this age may engage in the following occupations without an employment certificate: caddying, baby sitting, casual yard and household work.
Employment Of Minors Sixteen Or Seventeen Years Of Age: Generally speaking, minors of this age may be employed under the same conditions and circumstances as fourteen and fifteen-year old minors, with the exception that at sixteen, factory work is permitted.
Prohibited Employment Of Minors: No one under the age of sixteen may be employed in painting or cleaning the exterior of a building or structure, in a factory or operating washing, grinding, cutting, slicing, pressing or mixing machinery. The law further specifies an extensive list of high-risk occupations from which all minors under the age of eighteen are barred. Persons considering the employment of minors should consult with the New York State Department of Labor or the office of the Attorney General to ensure that the proposed employment is permitted.
Duties Of Employers: Employers must maintain an employment certificate on file at the place of employment for all minors there employed and must make that certificate available for inspection by any person authorized by law to examine such document. At the termination of the minor's employment, the certificate should be returned to the minor.
The laws governing hours of labor and required meal breaks are found in article five of the labor law. These laws are enforced by the Attorney General.
One Day Rest In Seven: With certain specified exceptions, most employers are required to permit manual employees at least one day, defined as a consecutive twenty-four hour period, off each week. Exceptions exist for small dairy industry employers, continuous manufacturing operations, seasonal resorts and employers who have obtained a variance from the Commissioner of Labor.
The Noon Meal Break: Factory employees shall be allowed at least sixty minutes for the noon meal. All employees in mercantile or other establishments who work a shift of more than six hours which extends over the period between 11:00 A.M. and 2:00 P.M. are entitled to a half-hour meal break.
Night Shift Meal Break: Persons employed for a shift in excess of six hours commencing between 1:00 P.M. and 6:00 A.M. shall be entitled to a meal period of at least sixty minutes if employed in a factory or forty-five minutes if employed in a mercantile or other establishment. The meal period must be scheduled at a time midway between the beginning and end of the shift.
Special regulations for the apparel industry are found in article 12-A of the labor law. These laws are enforced by the Attorney General.
"Hot Goods": State law prohibits the sale, delivery or shipment of apparel or sections of "hot goods", that is, apparel produced in violation of the wage payment or minimum wage sections of the labor law. Essentially, this means that if the contractor who produced or worked on the merchandise underpaid his employees, it is illegal for anyone to sell or ship that merchandise until the underpayment is cured. Failure to comply subjects the offender to contempt proceedings.
Contractors engaged in public work construction or service contracts must comply with the provisions of the prevailing wage law, which is found in article eight of the labor law. The prevailing wage law was originally enacted in 1894 to ensure that workers on state and local public work and service contracts are paid wages and wage supplements equivalent to those paid in the private sector for similar work in the same locality, as required by the New York State Constitution. The law provides both civil and criminal penalties and mandates that two willful violations of the law bar a contractor from bidding on a public work or service contract for a period of five years. The prevailing wage law is enforced by the Attorney General. Information on the application of the prevailing wage law can be obtained from the Bureau of Public Works in the New York State Department of Labor or the office of the Attorney General.
Obligations Of Employers To Employees Summoned For Jury Duty: An employee who gives notice to his employer that he has been summoned for jury service may not be discharged or otherwise penalized by the employer on account of such service. An employer of ten or fewer employees may withhold the full wages of an employee absent from work on account of jury service. An employer of ten or more employees must pay to an employee serving on jury duty the first $40.00 of that employee's daily wage for the first three days of jury service. Failure to comply is punishable as criminal contempt. (Judiciary law, sections 519 et. seq.)
Workers Compensation And Disability Benefits Insurance: Employers are required to maintain workers' compensation and disability benefits insurance coverage for their employees (Workers' compensation law, sections 10, 211). Employers may not charge any portion of the cost of workers' compensation coverage to their employees (Workers' compensation law, section 31), but may seek contribution from employees toward the cost of disability benefits coverage up to a maximum of one-half of one percent of the employees wages or sixty cents per week, whichever is less (Workers' compensation law, section 209). Failure to maintain workers' compensation and /or disability benefits insurance will subject an employer to civil and criminal penalties and will further expose him to liability for the payment of the benefits that should have been secured by that insurance.
Leave: Employers of fifty or more employees are subject to the provisions of the Family and Medical Leave Act of 1993, federal legislation which entitles employees to take up to twelve weeks of job-protected leave each year under certain, specified conditions. Information concerning this federal law may be obtained from the United States Department of Labor at http://www.dol.gov.esa/public/regs/compliance/whd/1421.htm. Although this legislation applies to New York state employers who meet the size threshold, there is no similar state legislation and no legislation offering similar protection to employees of smaller businesses.
New York state law does not require job-protected leave during periods of illness or disability and does not require that an employer offer job-protected maternity leave. Employers of four or more employees must, however, comply with the state's human rights law (Executive law, article15), which prohibits discrimination on the basis of sex, and must treat disability arising from pregnancy in the same manner as other disabilities.
Violations of the human rights law are subject to administrative proceedings before the State Division of Human Rights.
Health Insurance Continuation: New York state insurance law, section 3221, provides for the continuation of health insurance for separated employees of employers who have fewer than twenty employees and are thus not covered by COBRA, federal legislation on the same subject . Information on the federal law may be obtained from the United States Department of Labor at http://www.dol.gov/pwba. Any employee who has been covered under an employer-provided group health insurance policy for at least three months and whose coverage is terminated by his separation from employment, provided that he is not otherwise eligible for coverage under another group policy or by Medicare, is eligible to continue as a member of the employer-provided group plan for a period of up to eighteen months, provided that the separated employee himself pays the premium for his coverage. The former employer must remit such payments received from the separated employee to the insurance carrier.
An employer who maintains a group health insurance policy, whether or not the policy is employer-paid, is required to give to each covered employee a certificate of coverage which describes the continuation privilege and the time period after separation during which it may be exercised. This certificate should be given at the initiation of coverage. There is no statutory requirement that the employer provide any additional notice to the departing certificate holder at the time of separation.
|Employers seeking further information or
clarification may contact the Attorney
General's Labor Bureau by mail, at 120
Broadway, New York, New York 10271 or by
telephone at (212) 416-8700.
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