NY State Senate Bill S858

Archive: Last Bill Status - Signed by Governor

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed by Governor

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Actions

view actions (13)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Aug 19, 2021	signed chap.397
Aug 09, 2021	delivered to governor
Jun 02, 2021	returned to senate passed assembly
May 24, 2021	ordered to third reading rules cal.79 substituted for a1893
Feb 10, 2021	referred to labor delivered to assembly passed senate
Jan 25, 2021	advanced to third reading
Jan 20, 2021	2nd report cal.
Jan 19, 2021	1st report cal.114
Jan 06, 2021	referred to labor

Votes

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Feb 10, 2021 - floor Vote

S858

floor

Aye

Nay

Absent

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Jan 19, 2021 - Labor committee Vote

S858

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

Co-Sponsors

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S858 (ACTIVE) - Details

See Assembly Version of this Bill:: A1893
Law Section:: Labor Law
Laws Affected:: Amd §§193 & 198, Lab L
Versions Introduced in 2019-2020 Legislative Session:: S5777, A7841

S858 (ACTIVE) - Summary

Relates to clarifying provisions prohibiting wage theft; provides that there are no exceptions to liability for failure to pay wages.

S858 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S858

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend the labor law, in relation to wage theft

 
PURPOSE OR GENERAL IDEA OF BILL:

To clarify that Article 6 of New York's Labor Law completely and without
exception prohibits lack of distribution of earned wages.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill outlines the legislature's finding that different
sections of Article 6 of New York's Labor Law must be amended to clarify
that wage theft remains illegal without exception.

Section 2 establishes that this act shall be known as the "No Wage Theft
Loophole Act."

Section 3 provides that there is no exception to liability under Section
193 of the Labor Law for failure to pay wages.

Section 4 provides that there is no exception to liability under Section
198 of the Labor Law for failure to pay wages, benefits or wage supple-
ments.

Section 5 provides that this act shall take effect immediately.

 
JUSTIFICATION:

Article 6 of the Labor Law was created to prevent employers from bene-
fiting from the fruits of their employees' labor by withholding wages.
If interpreted correctly, this broad-ranging statute allows prevailing
plaintiffs to recover unpaid wages, attorney's fees, and in many cases
liquidated damages.

To the detriment of employees everywhere, however, the statute is often
interpreted extremely narrowly by courts who misconstrue or overlook its
rights-affirming language. Section 193 of the Labor Law prohibits any
deductions from wages unless the deduction is expressly authorized by
the employee in writing and for his or her own benefit.  While this
language seems clear enough on its face to ward against any wage theft,
much confusion has arisen over the term "deduction" and what this could
possibly represent. For many of us, "deduction" calls to mind a literal
notation on a paystub of wages subtracted, which leads to the question:
what if the wage theft is not denoted by a line on a paystub? One can
imagine a whole host of scenarios,,,for example, which clearly violate
the intent of Section 193 without conforming to thisliarrow definition
of a "deduction." As attorney Scott Lucas outlines in his article "Does
New York's Wage Payment Law Have a Gaping Loophole?" (New York State Bar
Association Labor and Employment Law Journal, Vol. 41, No.1, Fall 2016),
an employer could withhold wages but simply fail to note the deduction
on a paystub.  Alternatively, an employer could deny the existence of
the full amount of wages owed and claim that the employee's paycheck
that month was a discretionary amount that the employer decided based on
the quality of the employee's work. Or, an employer could choose to
withhold the pay entirely, as the statute simply prohibits "ANY"
deduction. But does "any" mean "all"? What if the statute does not
prohibit the withholding of an entire paycheck?

While it may seem obvious that a "deduction" in the context of wage
theft is meant to imply the taking of wages, case law on the provisions
of Article 6 has painted a much more nuanced and confusing picture. In
Gottlieb v. Kenneth D. Laub & Co, for example, the Court of Appeals
concluded that an employee asserting a common-law contract claim but not
alleging a violation of any substantive provision of Article 6 was not
eligible to collect attorney's fees under Section 198, the part of the
Labor Law dealing with penalties and recovery actions. The court held in
Gottlieb that Section 198 was not "substantive." Because of this court
ruling, the legislature then amended Section 198 as part of the Unpaid
Wages Prohibition Act in 1997 to declare that "all employees shall have
the right to recover full wages, benefits and wage supplements accrued
during the six years previous to the commencing of such action."

While it seems the meaning of this provision could hardly be plainer,
there was then a later court decision (Malinowski v. Wall Street Source,
Inc.) which completely misinterpreted this part of Section 198. The
court in Malinowski cited Gottlieb in its ruling, believing that the
current language of Section 198 was in place at the time of the Gottlieb
ruling and thus did not really mean anything. The court failed to real-
ize that the rights-affirming language of Section 198 was added post-
Gottlieb precisely BECAUSE of Gottlieb. Subsequent courts have ruled in
similar ways to reinforce the misled notion that Section 198 does not
uphold the right of recovery for full wages. New York's Labor Law, then,
which should be a model for the rest of the nation in its defense of
employee rights, finds itself watered down by a judicially created loop-
hole.

This loophole is not merely a topic for law journal articles.  Attorneys
representing laborer plaintiffs speak of real-life cases where plain-
tiffs are deprived of their earned wages, and then deprived of a remedy
under the Labor Law by courts that misread the law.

It is thus necessary for the legislature to close this judicially-creat-
ed loophole once and for all to clarify that employees must be paid what
they are owed, no matter what. Doing so will help defend the rights of
all employees, including low-income employees who are more likely to be
subject to wage theft. New York cannot in good faith claim to be one of
the most progressive states in the nation when it comes to labor rights
if we fail to clarify that wage theft is, and has always been, complete-
ly prohibited within our boundaries.

 
PRIOR LEGISLATIVE HISTORY:

2020: S5777 - Passed Senate, died in Assembly
2020: S5777 - Referred to Labor

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
Immediately

S858 (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    858
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sens.  GOUNARDES,  BIAGGI,  GAUGHRAN,  JACKSON, KRUEGER,
   MYRIE, SEPULVEDA, SKOUFIS -- read twice and ordered printed, and  when
   printed to be committed to the Committee on Labor
 
 AN ACT to amend the labor law, in relation to wage theft

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings. Article  6  of  the  labor  law,  and
 sections  193 and 198(3) in particular, reflects New York's longstanding
 policy against the forfeiture of earned  but  undistributed  wages.  The
 purpose of this remedial amendment is to clarify that: (a) the unauthor-
 ized failure to pay wages, benefits and wage supplements has always been
 encompassed  by  the  prohibitions  of  section  193,  see, e.g., Ryan v
 Kellogg Partners Inst. Servs., 19 N.Y. 3d 1, 16 (2012) (correctly  hold-
 ing  that  employer's  neglect  to  pay  sum  that  constitutes a "wage"
 violated section 193); and (b) consistent with established principles of
 statutory construction, section 193 should be  harmonized  with  section
 198(3)'s  guarantee  that "All employees shall have the right to recover
 full wages, benefits and wage supplements  and  liquidated  damages."  A
 wage  is  either  owed  or it is not. Employers have a statutory duty to
 provide employees with enough information to know how  their  employment
 compensation  is  calculated.  The  legislature thus finds that it has a
 responsibility to harmonize these two sections of the labor law to clar-
 ify for the courts once and for all that wage theft  remains  completely
 and  without  exception  in  violation  of statute and all employees are
 entitled to full wages, benefits and wage supplements earned.
   § 2. This act shall be known and may be cited as the  "No  wage  theft
 loophole act".
   §  3. Section 193 of the labor law is amended by adding a new subdivi-
 sion 5 to read as follows:

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01120-01-1

 S. 858                              2
 
   5. THERE IS NO EXCEPTION TO LIABILITY UNDER THIS SECTION FOR THE UNAU-
 THORIZED FAILURE TO PAY WAGES, BENEFITS OR WAGE SUPPLEMENTS.
   §  4.  Subdivision  3  of  section 198 of the labor law, as amended by
 chapter 2 of the laws of 2015, is amended to read as follows:
   3. Notwithstanding any other provision of law, an  action  to  recover
 upon  a  liability  imposed by this article must be commenced within six
 years. The statute of limitations shall  be  tolled  from  the  date  an
 employee  files  a  complaint  with the commissioner or the commissioner
 commences an investigation, whichever is  earlier,  until  an  order  to
 comply  issued  by  the commissioner becomes final, or where the commis-
 sioner does not issue an order, until the date on which the commissioner
 notifies the complainant that the investigation has concluded.  Investi-
 gation  by  the  commissioner  shall  not be a prerequisite to nor a bar
 against a person bringing a civil action under this section. All employ-
 ees shall have the right  to  recover  full  wages,  benefits  and  wage
 supplements and liquidated damages accrued during the six years previous
 to  the  commencing of such action, whether such action is instituted by
 the employee or by the commissioner. THERE IS NO EXCEPTION TO  LIABILITY
 UNDER  THIS  SECTION FOR THE UNAUTHORIZED FAILURE TO PAY WAGES, BENEFITS
 OR WAGE SUPPLEMENTS.
   § 5. This act shall take effect immediately.

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The New York State Senate

senate Bill S858

Sponsored By

Archive: Last Bill Status - Signed by Governor

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Votes

Feb 10, 2021 - floor Vote

Floor Vote: Feb 10, 2021

Jan 19, 2021 - Labor committee Vote

Labor Committee Vote: Jan 19, 2021

Co-Sponsors

S858 (ACTIVE) - Details

S858 (ACTIVE) - Summary

S858 (ACTIVE) - Sponsor Memo

S858 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S858

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Archive: Last Bill Status - Signed by Governor

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Votes

Feb 10, 2021 - floor Vote

Floor Vote: Feb 10, 2021

Jan 19, 2021 - Labor committee Vote

Labor Committee Vote: Jan 19, 2021

Co-Sponsors

S858 (ACTIVE) - Details

S858 (ACTIVE) - Summary

S858 (ACTIVE) - Sponsor Memo

S858 (ACTIVE) - Bill Text download pdf

Comments