Businesses Knock New State Law Requiring Employers To Verify Salaries

5:37 PM, Feb 2, 2012   |    comments
  • Share
  • Print
  • - A A A +

Albany Bureau Chief

ALBANY -- If you've recently received a letter from your employer asking to verify your salary, you can thank a state law passed in 2010 for the extra work.

The Wage Theft Prevention Act took effect last April and requires every private employer in the state to provide workers a document verifying their salaries and other basic information.

Employers are required to provide the notice between Jan. 1 and Feb. 1 each year. Employees then sign it and return it.

Businesses and some state lawmakers are railing against the law and are seeking to change it.

"The paperwork is not justified," said Sen. John DeFrancisco, R-Syracuse, who is sponsoring a bill to revoke the yearly reporting standard. "If there's a violation, the Department of Labor can get all that information."

Workers-rights groups and unions said the law protects employees from being bilked by employers. Employees sometimes don't know who owns the company they work for, particularly if it is a small business, and have little recourse without the proper documentation, supporters said.

"The Wage Theft Protection Act is an important step in ensuring that businesses were in compliance with the law and that workers who find it very difficult to get what they are entitled to have a means of doing so," said Stuart Applebaum, president of the Retail, Wholesale and Department Store Union, based in Manhattan.

Sen. Diane Savino, D-Staten Island, said Thursday that although she sponsored the Wage Theft Protection Act, she agrees that it should be tweaked. Only employers who do not provide bi-weekly pay stubs that denote workers' salaries should have to file the yearly notice, Savino said.

"We knew who our target is: It's bad employers, not good employers," Savino said. "We never wanted to make it difficult for good employers. We wanted to capture the bad guys."

Savino said the act was aimed at making it easier for the state Labor Department to penalize employers who weren't paying wages or not paying payroll taxes and workers' compensation fees.

The bill was adopted when Democrats ran the state Senate and signed into law by then-Gov. David Paterson soon before he left office.

Savino said she has had discussions with the Labor Department about whether the notice provision could be changed administratively or require legislation. Republicans now control the Senate.

Companies said the law is another onerous measure in a state known for red tape. The Tax Foundation last week named New York as having the 49th worst business climate in the nation -- ahead of New Jersey.

"This is an absolutely spot-on, perfect example of the government overstepping its bounds and being a problem for the private sector," said Brian Sampson, executive director of Unshackle Upstate, a Rochester-based business group.

Some lawmakers said they would look to repeal some, if not all of the law this year. "Although the Wage Theft Prevention Act of 2010 was enacted with good intentions, there is a major flaw in its provisions," a bill memo to repeal the notification says. "It created a costly and repetitious annual written pay notice."

The failure of a company to comply with the wage-notice requirement can come with stiff fines: between $50 and $100 a week per employee. The notices must be kept on file for six years, and notices must be provided in a worker's primary language.
The Labor Department provided a template in English, Spanish, Chinese, Korean, Creole, Polish and Russian. Employees can sue for up to $2,500 if the notice isn't provided.

Cathy Ruckelshaus, legal co-director of the National Employment Law Project, a Manhattan-based rights group, said the law isn't onerous on businesses. She said in most cases, a signed pay stub would be adequate.

"I'm not convinced that this is burdensome because aboveboard employers are going to be doing this kind of record keeping already," she said.

Gannett Albany

Most Watched Videos