Wage theft describes an employer’s failure to pay employees the full amount of wages they should receive under the law. Wage theft can take many forms, including failing to pay minimum wage, failing to pay time-and-a-half when an employee works more than 40 hours in a week, denying employees meal breaks, taking illegal deductions from pay, failing to maintain proper records, and failing to provide pay stubs.  Other common violations include improperly taking tips and treating workers as independent contractors when they are really employees.

Wage theft lawsuits are on the rise in New York City.  Gov. Cuomo claims that New York has returned more wages to workers than any other state in the nation.  Employers should know the following:

  1. Owners and Managers of Corporations and LLCs Can Be Personally Responsible for Fines Levied Against the Business.  The laws are strict and levy harsh punishment for labor law violations, including finding owners and managers personally responsible for violations.
  2. Lawsuits Can Be Brought By the Government, Employees, or a Group of Employees.  There are federal, state, and city laws that govern N.Y.C. workers.  A law suit can be brought by the government or workers themselves.  One worker can ask for payroll records and invite other workers to join the lawsuit.
  3. No Business is Too Big or Too Small to Be Sued.  Many large corporations have been the subject of lawsuit, such as Walmart and Starbucks.  But we defended a business that had one employee for ten years.  Every business is subject to these laws.  It can happen to you.
  4. Wage Theft Law Suits are a Big Business.  Most private lawsuits brought in N.Y.C. are done at no cost to the employee, since lawyers take these cases on contingency fees.  But business owners most commonly defend these suits by paying a lawyer an hourly rate, and defending these actions is expensive.
  5. Many Businesses Do Not Break the Laws Intentionally.  The laws are detailed and complex.  Many businesses don’t know they are violating the laws.

What can you do? Hire a human resource consultant, attorney, or other professional to review your payroll practices.  Make sure you are treating your workers properly and running your business legally to avoid these actions.

Norma E. Ortiz is a partner of Ortiz & Ortiz, L.L.P., located in Astoria, New York. For over 30 years, Norma has counseled businesses and property owners on ways to protect their businesses and assets.