Staying Compliant—Avoiding Wage Theft in New York

2 min

In October 2023, we wrote an alert detailing an amendment to New York's Penal Code that added wage theft as a means of committing criminal larceny. This amendment, along with the creation of a specialized Worker Protection Unit within the Manhattan District Attorney's office, reflected a renewed focus in New York on the issue of wage theft. Given the recent high-profile indictments against hospitality owners, including Grimaldi's Pizzeria, this alert will provide some timely tips to avoid wage theft issues.

Understand the Laws

New York's wage laws are complex, with industry-specific regulations and concepts that might not be present in other states, such as spread of hours pay. Employers should work closely with counsel to familiarize themselves with the laws that might affect their business and ensure that they are closely complying.

Keep Accurate Records

Contemporaneous records can be key to defending against accusations of wage theft. Employers should maintain detailed records of all hours worked, including start/end times, breaks, and overtime, on a platform that employees have access to. Hospitality employers that pay wages either partially or completely in cash should require their employees to sign documentation confirming that they received their pay.

Classify Employees Correctly

Misclassifying employees can lead to a host of wage violations, and employers should take care to stay up to date on the changing rules. For more information, please review a recent alert from our colleagues.

Respond Promptly to Questions and Concerns

Given the complex landscape, employees in hospitality settings may have questions about their pay. Employers should foster an environment where employees feel comfortable asking these questions, and should be prepared to respond quickly and fully. Any legitimate concerns should be promptly investigated and rectified if needed. Aside from complying with laws, this will lead to a more comfortable workforce and increased productivity.

Train Supervisors and Managers

All supervisors and managers should understand wage requirements and how to respond to any employee concerns. Owners may ultimately end up being responsible for any mishaps that occur on their manager's watch, so due care should be taken to ensure that supervisors are informed and appropriately escalate any issues.

We expect to see a continued rise in wage theft indictments in the New York hospitality industry moving forward. Employers should therefore remain mindful of their obligations and should work closely with legal counsel. For assistance with wage and hour issues, please contact the authors of this article or any other attorney in Venable's Labor and Employment Group.

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