Senate Bill S3358

                                 BILL NUMBER:  S3358A

 TITLE OF BILL :

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


 SUMMARY OF SPECIFIC 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 from
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.  It would also exempt state and
local public employers.

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 the
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 :

2008: S.8208 Reported from Labor to Rules
      A.10852 Advanced to 3rd Reading

 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 under 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 (LLC) 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 federal 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 house hold 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. This bill would provide
greater protection for future employees against such retaliation.

 FISCAL IMPLICATIONS :
Some increase in state revenues from increased penalties.

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