New York Employment Lawyer Blog

Pursuant to New York Labor Law § 195:

· New York employers must provide any new employee with the employee's regular hourly rate of pay, overtime rate of pay (if applicable), and regular payday at the time the employee is hired. Such notice must be given at the time of hiring and before the employee performs any work. The employer must keep the original notice for at least six (6) years and must provide the employee with a copy.

· Employers must obtain written acknowledgment of the rates of pay and the regular payday from each employee at the time the employee is hired.

· Employers must notify an employee of any change in that employee's payday before the change takes place.

· Employers must provide each employee with every payment of wages, listing gross wages, deductions and net wages, and must, at the employee's request, explain how the wages were computed.

· Employers must establish, maintain and preserve records showing the hours worked, gross wages, deductions, and net wages for each employee, for not less than three (3) years.

· Employers must notify employees in writing or by publicly posting the employer's policy on sick leave, vacation, personal leave, holidays and hours.

· Employers must notify, in writing, any employee terminated from employment of the exact date of termination, as well as the exact date of cancellation of employee benefits connected with the termination. Employers must provide this notice within five (5) working days of the actual date of termination. Failure to notify an employee of the cancellation of his or her benefits subjects an employer to potential liability in a civil action brought by the employee in which damages may include reimbursement for medical expenses that were not covered by the insurer because of the termination of the employee without notice.

Pursuant to the New York Unemployment Insurance regulations (12 N.Y.C.R.R. § 472.8):

· New York employers must inform all terminated employees, in writing, at the time of separation of their right to file an application for unemployment benefits. The notice must include the employer's name, address, and registration number. Employers must also advise an employee to present the notice to the New York State Unemployment Insurance Division when he or she files a claim for benefits.

The federal statute that deals with credit checks in the employment context is the Fair Credit Reporting Act ("FCRA"). In order to be covered by the FCRA, the credit report in question must be prepared by a consumer reporting agency ("CRA") -- a business that assembles such reports for other businesses.

Under the FCRA, anyone with a "legitimate business need" may access your credit report. Employers are deemed to have a "legitimate business need" to see an applicant's or employee's credit report as long as the employer uses this report to evaluate the applicant for hire and to evaluate a current employee for promotion, retention, or reassignment.

Although employers have the right to make employment decisions based on a credit report, the FCRA regulates the way in which they may make those decisions. First, the FCRA requires that an employer first obtain the applicant's or employee's written consent before performing a credit check. An employer must first inform the employee or applicant that someone will be conducting a credit check and get that employee's permission in writing (except for the trucking industry, in which case permission might not be required).

Second, before an employer may take an adverse action against an employee or applicant based solely on a credit check, the employer must give him/her a "pre-adverse action disclosure" that consists of a copy of the credit report and a written summary of his/her rights under the FCRA.

Third, after an employer has taken an adverse action against an employee or applicant, the employer must then provide him/her with an "adverse action notice." This notice must contain the name, address, and phone number of the CRA that supplied the report, a statement that the CRA that supplied the report did not make the decision to take the adverse action, and a statement notifying the individual of his/her right to dispute the accuracy or completeness of any information the agency furnished, and his/her right to an additional free consumer report from the agency upon request within 60 days.

There are legal consequences for employers who fail to get an applicant's permission before requesting a consumer report or who fail to provide pre-adverse action disclosures and adverse action notices to unsuccessful job applicants. The FCRA allows individuals to sue employers for damages in federal court. A person who successfully sues is entitled to recover court costs and reasonable legal fees. The law also allows individuals to seek punitive damages for deliberate violations.

Lastly, under Section 525(b) of the Bankruptcy Reform Act of 1978, it is unlawful for an employer to take an adverse employment action against an employee solely because that employee's credit check revealed that he/she had previously declared bankruptcy.

Under this country's H-1B visa program (which was created by the Immigration and Nationality Act ("INA")), employers may hire non-immigrant professionals to work temporarily in specialty occupations.

As part of this program, the employer must submit a Labor Condition Application ("LCA") to the US Department of Labor. The LCA specifies, among other things, the job, its salary, the employment period, and its geographic location. The employer also attests that it will abide by the LCA program's requirements.

The employer attests in the LCA that it will pay the H-1B non-immigrant professional the greater of the job's actual wage rate or the prevailing wage rate throughout the entire period of authorized employment, and will pay for non-productive time. The prevailing wage rate is the average wage paid to professionals who are similarly employed in the occupation listed on the LCA, at the location where the H-1B employee will work. If the employer has other workers with "substantially the same duties and responsibilities" as the H-1B worker who earn more than the area's "prevailing wage," their compensation becomes the "actual wage" the H-1B worker must receive. Should the employer have no other employees with comparable duties and responsibilities, it is free to pay the H-1B worker more than the area's prevailing wage, which becomes the H-1B worker's "actual wage."

As another condition of an LCA, the employer attests that it offers benefits to its H-1B non-immigrant workers on a par with those offered to U.S. workers it employs in similar jobs. As one example, health insurance plans must be offered "on the same basis and in accordance with the same criteria" that the employer offers to American workers.

When it signs the LCA and submits it to the Department of Labor, an employer represents that the statements in its LCA are accurate and acknowledges that it will comply with its obligations under the H-1B visa regulations.

The INA authorizes the Department of Labor "to determine whether an employer has engaged in misrepresentation or failed to meet a condition of the LCA," and to impose fines and penalties on culpable employers.

Whistleblower Protections

Those who employ H-1B workers may not discriminate against an employee in any manner for complaining internally (to the employer) or externally (to the government) about violations of H-1B program requirements. Under Title 20 of the Code of Federal Regulations, "No employer subject to this subpart . . . shall intimidate, threaten, restrain, coerce, blacklist, discharge or in any other manner discriminate against an employee . . . because the employee has . . . [d]isclosed information to the employer, or to any other person, that the employee reasonably believes evidences a violation . . . of the INA . . . or . . . [c]ooperated or sought to cooperate in an investigation or other proceeding concerning the employer's compliance with the requirements . . . of the INA.

It's extremely important that employers not retaliate against an employee who raises issues with respect to misrepresentations made by the employer in an LCA. Also, any employee who feels that he/she was retaliated against for complaining about misrepresentations made in an LCA or for complaining about the employer's failure to meet a condition specified in the LCA should file a complaint with the US Department of Labor, Wage and Hour Division.

We also always recommend that employers consult with a New York City employment attorney before terminating or disciplining an employee who has recently complained.

It is well settled in New York that a party may not bring a class action lawsuit in State Court for a violation of a New York statute if the statute authorizes the prevailing party to collect a penalty. This is because New York CPLR § 901(b) prohibits class actions in suits seeking penalties or statutory minimum damages. The express language of NY CPLR §901(b) states that, "Unless a statute creating or imposing a penalty or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action."

New York Labor Law Articles 6 (payment of wages) and Article 19 (New York Minimum Wage Act) both allow successful plaintiffs to recover liquidated damages. Liquidated damages under New York Labor Law are considered a penalty for purposes of CPLR 901(b) and, accordingly, absent anything more, an action to recover wages and liquidated damages is not maintainable as a class action in state court. Carter v. Frito-Lay, Inc. (1981).

However, it is undisputed that an employee may elect to waive his or her right to seek liquidated damages. "Consequently, the law is now well established in New York that, in the context of an action presenting allegations of Labor Law wage violations, 'the correct rule' is that, if the named plaintiff waives the statutory penalty, the action may be maintained as a class action as long as class members are afforded the obtain of opting out so that they may pursue all statutory remedies." Krebs v. Canyon Club, Inc. (N.Y. Sup. 2009).

It's important to note that this limitation only applies in State court and not in Federal court. On March 31, 2010, the United States Supreme Court issued a significant decision, in which it rejected these limitations on class actions heard in federal court.

In Shady Grove Orthopedic Assocs., PA v. Allstate Ins. Co. (Mar. 31, 2010), the US Supreme Court held that New York CPLR § 901(b) conflicts with Federal Rule of Civil Procedure 23 and thus cannot be applied by a federal court sitting in diversity.

If you have any questions regarding whether or not to file your class action wage and hour lawsuit in Federal or State court, it's always smart to consult with a New York City wage and hour attorney.

Claims of individual liability under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) are analyzed using the same standards. The FLSA broadly defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d).

In determining whether an individual is an "employer" and thus individually liable, the Second Circuit has held that "the overarching concern is whether the alleged employer possessed the power to control the workers in question with an eye to the 'economic reality' presented by the facts of each case." Herman v. RSR Sec. Servs. Ltd. (2d Cir.1999). "Under the 'economic reality' test, the relevant factors include whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records. This test encompasses the totality of circumstances, no one of which is exclusive." Shim v. Millennium Group (E.D.N.Y. 2010) (internal citations omitted).

A corporate officer or director may be found to be an employer when "the individual has overall operational control of the corporation, possesses an ownership interest in it, controls significant functions of the business, or determines employees' salaries and makes hiring decisions." Ling Nan Zheng v. Liberty Apparel Co., Inc. (S.D.N.Y. 2008) (citation omitted). Employer status "does not require continuous monitoring of employees, looking over their shoulders at all times, or any sort of absolute control of one's employees. Control may be restricted, or exercised only occasionally, without removing the employment relationship from the protections of the FLSA, since such limitations on control do not diminish the significance of its existence." Herman (internal quotations omitted).

Lastly, Section 630(a) of New York Business Corporations Law provides a procedure by which an employee may seek to hold the ten largest shareholders of a corporation personally liable for unpaid wages. NY BCL § 630(a) provides, in pertinent part: "The ten largest shareholders, as determined by the fair value of their beneficial interest as of the beginning of the period during which the unpaid services referred to in this section are performed, of every corporation (other than an investment company registered as such under an act of congress entitled "Investment Company Act of 1940"), no shares of which are listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national or an affiliated securities association, shall jointly and severally be personally liable for all debts, wages or salaries due and owing to any of its laborers, servants or employees other than contractors, for services performed by them for such corporation...." NY BCL § 630(a). Thus, "BCL § 630 operates, in effect, to 'pierce the corporate veil' and impose personal liability against corporate shareholders for the debts of their corporation." Stuto v. Kerber (N.Y.Sup. 2009).

To protect the officers, directors and shareholders of your company from being individually liable for unpaid wages to employees, it's smart to always consult with a New York wage and hour attorney.