Assembly Bill A6963

                                BILL NUMBER:A6963

TITLE OF BILL:

An  act  to amend the labor law, in relation to strengthening wage and
hour protections for working people

PURPOSE OF THE BILL:

This  bill  would  expand  worker  protections  and  remedies  against
employers  who  violate Labor Law requirements related to wage payment
or who retaliate against employees who exercise their rights under the
Labor Law.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend Labor Law § 198(1-a)  to  allow  the
Commissioner  of  Labor  to  bring  a  court  action or administrative
proceeding to collect wage underpayments  and  liquidated  damages  on
behalf  of  workers, unless the employer proves a good faith basis for
believing its underpayment complied with the law.

Section 2 of the bill would amend Labor Law §  215(1)  to  expand  the
categories  of  conduct  protected  against  employer  retaliation for
complaints concerning wage and  other  labor  law  violations,  extend
liability  for  such  violations  to  limited  liability companies and
              

partnerships, increase the minimum civil penalty from $200  to  $1,000
and  the  maximum  penalty  from $2,000 to $10,000 for retaliation and
allow the Commissioner to award lost  compensation  to  employees  who
have been victims of employer retaliation.

Section  3  of  the  bill  would  amend  Labor Law § 663(1) and (2) to
clarify that the Commissioner may  use  an  administrative  proceeding
against employers to collect minimum wage underpayments and liquidated
damages,  and  to provide that such liquidated damages may be assessed
unless the employer proves a good faith basis for believing  its  wage
underpayment complied with the law.

Section  4  of  the  bill  establishes an effective date 90 days after
enactment.

EXISTING LAW:

Labor Law § 198(1-a) places the burden of proof on employees  to  show
entitlement  to  liquidated damages by showing that the employer acted
willfully.

Labor Law §  215(1)  establishes  the  grounds  to  claim  retaliation
against   workers   who   assert   certain  labor  rights  and  allows
Commissioner to impose civil penalties against employers.

Labor Law §663 allows an employee to bring a civil action  to  recover
minimum   wages,  and  allows  liquidated  damages  upon  proving  the
underpayment was willful. The same section allows the Commissioner  to
bring  any  legal  action  necessary, including administrative action,
against employers to do the same.


PRIOR LEGISLATIVE HISTORY:

In  2008,  a similar bill was introduced (A.10852/S.8208) and referred
to the Senate Rules Committee.

STATEMENT IN SUPPORT:

It is not uncommon for employees to lose their jobs or have their work
hours reduced after their employer  learns  they  have  requested  the
Department  of  Labor's help to recover unpaid wages, or have asserted
other rights under the Labor Law. This retaliation can also  take  the
form  of  less  favorable  shifts,  loss  of benefits, reassignment of
duties, and other changes to the terms and conditions  of  employment.
Retaliation  against  employees  who  attempt  to recover unpaid wages
often victimizes individuals who are among  the  lowest  paid  in  our
state. The current minimum penalty of $200 for employer retaliation is
more than a half century old and is woefully inadequate to provide any
disincentive   for   such  action.  Without  a  sufficient  deterrent,
employers can decide that it is easier to wait  until  the  Department
brings  an  enforcement  action  if their penalty will only be a small
fine. In the past 50 years, the consumer  price  index  has  increased
sixfold. If the $200 penalty had kept pace, it would have increased to
$1,200  by  now.    This proposal would raise the minimum penalty to a
more modest amount of $1,000.

The bill would also extend liability for retaliation to  officers  and
agents  of limited liability companies and partnerships. The number of
LLC's in the  state  has  quadrupled  in  the  past  ten  years.  This
increasingly  popular  form  of  business  entity  allows employers to
operate for profit and should be subject  to  the  same  liability  as
other  employers who retaliate against workers. Further, this proposal
will protect employers throughout the State who comply with  the  wage
law  by  ensuring  that  violators  do  not have an unfair competitive
advantage by underpaying workers.

This proposal would also conform  New  York  law  to  the  Fair  Labor
Standards  Act  and  the  laws  of  other  states  that  allow workers
liquidated damages once they establish that  their  employer  violated
the  wage law.   These jurisdictions recognize the inherent unfairness
of requiring employees who have already proven they were underpaid  to
further  prove  the underpayment was willful. The burden of explaining
the basis of violations rightly rests with the employer,  rather  than
imposing  the  onerous  burden  on  employees  of  establishing  their
employer's state of mind. Many of the  employees  that  would  benefit
from  this  proposal  are low-wage workers struggling to support their
families on the minimum wage. In many cases, employers have failed for
years to pay even the well-publicized minimum wage rate  of  $7.15  an
hour.  The  bill  would  not  impact the 25% cap on liquidated damages
allowed to New York employers, unlike many  other  jurisdictions  that
allow recovery of 100% liquidated damages.

Current  law  also limits the Commissioner's remedies against employer
retaliation. Such retaliation harms not only the employee involved, it
also interferes with the Commissioner's overall  enforcement  of  wage
and  hour  laws  by  chilling the willingness of other workers to file
complaints, testify, or cooperate with investigations. This bill would
provide the Commissioner with broader  powers  to  punish  retaliatory


action  through  the  recovery  of  lost compensation for a discharged
employee.

Strengthening  the  recovery  of unpaid wages will also help the state
and local economies. Wage complaints prompt investigations and lead to
orders against employers to recover unpaid  wages  which  are  taxable
income.  Each  dollar  earned  and  recovered  reduces  the  amount of
assistance the state may have to provide to workers to help heat their
homes and feed their  families.  During  2006-2007,  the  Commissioner
collected  $15.3  million  in  minimum wage underpayments on behalf of
more than 19,000 workers, nearly  half  of  whom  live  upstate.  Each
dollar  recovered  also  returns  between $1.50 - $2.00 to the economy
through household purchases, bill payments,  and  other  contributions
that strengthen the state and local tax bases.

Unfortunately,  this  increased wage recovery effort has also resulted
in more  cases  of  wage  retaliation.  For  example,  the  Department
recently  helped 22 workers at a company recover approximately $10,000
in unpaid wages. Three of these  workers  were  terminated  after  the
employer  learned  of their wage complaints. If this proposal had been
in effect, the Department could have recovered as much as  $30,000  in
civil  penalties,  rather  than the maximum amount of $6,000 available
under current law.

BUDGET IMPLICATIONS:

The penalty increases are  estimated  to  generate  $75,000  in  state
revenues.

EFFECTIVE DATE:

The  bill  would  take effect ninety days after enactment and apply to
offenses committed on or after the effective date.