Ohio employers with multi-state operations will want to know that several states and local governments have recently considered or enacted "wage theft" legislation to include the criminal and increased civil penalties and fines for employers who underpay their workers. The inclusion of notice requirements in California and New York create additional consequences for the unwary employer.
Additional notice, recordkeeping requirements, and increased penalties for wage and hour violations are the highlights of California’s Wage Theft Protection Act, which will take effect on January 1, 2012. It makes the following changes to California wage and hour law for private employers:
- Written notice of certain pay and employer information: Notice must be provided to newly hired, non-exempt employees. This notice must include the employee’s rate of pay and what the rate is based upon (e.g. hourly, by piece, etc.), overtime rates, certain employer contact information, and the contact information for the employer’s workers’ compensation insurance carrier. Note, however, that notice is not required for newly hired non-exempt employees who are subject to a collective bargaining agreement that provides premium rates for overtime and a regular pay rate of at least 30% more than California’s minimum wage.
- Increased penalties: Some of these increased penalties include fines or prison time for employers who willfully refuse to pay wages pursuant to a court judgment or order.
- Longer statute of limitations: The California Division of Labor Standards Enforcement now has three years to pursue employer wage and hour violations, compared to the current one-year time limit.
- Additional recordkeeping requirements: Employers are required to retain wage statements and deduction records for three years, compared to current law under which employers must maintain these records for only two years. Employers may not prohibit employees from maintaining personal records of their own time or piece-rate units earned.
This type of law should sound familiar for employers with operations in New York, where similar legislation took effect in April 2011. In New York, the following requirements now exist for private employers:
- Written notice of certain pay and employer information: New York requires that private employers provide written notice of certain pay information and employer contact information by February 1, 2012 for all employees (not just those who are newly hired or non-exempt). This notice must include the employee’s rate of pay and what the rate is based upon (e.g. hourly, by piece, etc.), overtime rates if applicable, allowances taken as part of the minimum wage (tip, meal and lodging deductions), and certain employer contact information. In addition, New York also requires that the notice be in English and the employee’s primary language, if it is not English and the New York Department of Labor (NY DOL) has a translation in that other language available.
- Broader protection against retaliation: Threats of retaliation against employee complaints made in good faith are now illegal in New York and any person can be held liable for any retaliatory act. Under previous law, only employers could be cited for violations and threats of retaliation were not illegal.
- More remedies and criminal penalties for retaliation: Reinstatement or a lump sum payment in lieu of retaliation is available to employees, in addition to the previous penalty of up to $10,000 liquidated damages. Criminal penalties are also possible for retaliatory acts.
- Public posting of violations: For certain violations of law by employers, the NY DOL can post notice of the violation in an area conspicuous to employees for up to one year. Willful violations by employers are also subject to public posting for a 90-day period by the NY DOL.
In New York and California, the devil is in the details regarding the specific information required in the notices, which employees are to receive them, and on what timing, requiring close attention and preparation now by employers with operations in New York or California to issue their employee notices in January 2012. For their respective notices, New York provides templates and California is expected to have a template available in mid-December; however, in both states employers are permitted to use their own forms so long as they are in compliance with the states’ requirements.