Recent State Law Makes It a Crime to Withhold Wages

May 3, 2024 | Joel M. Greenberg | Employment & Labor

Governor Kathy Hochul signed an amendment to the New York Penal Law this past fall, designating “wage theft” as a form of criminal larceny. In doing so, she and the State Legislature targeted “bad faith” employers who violate New York’s Labor Law by improperly withholding timely payment of their employees’ earned wages.

The amendment covers every employer in New York State.

This legislative action followed a 2023 announcement by the Manhattan District Attorney’s Office that it had partnered with the New York State Department of Labor to create the Office’s first-ever “Worker Protection Unit” to investigate and criminally prosecute wage theft charges against companies and executives that “steal” wages.

The Act passed with near unanimous majorities in both chambers of the State Legislature. According to Assemblymember Catalina Cruz, the law’s co-sponsor, wage theft “accounts for almost $3.2 billion in lost wages each year–affecting over 2 million New Yorkers…The new law will allow prosecutors to seek stronger penalties against employers who steal wages from workers.”

In addition to the new law, Section 198 (1-a) of New York’s Labor Law imposes civil penalties on employers who engage in wage theft.

The statutory remedy available to victims of wage theft is that they are entitled to the full amount of the underpayment, reasonable attorney’s fees, pre-judgment interest (currently at 9% per year), and in the case of willful violation, liquidated damages up to 200% of the wages due.

All employers should review their payroll practices to make sure that their employees and former employees receive the compensation these employees are promised in a timely manner in order to avoid the significant penalties associated with wage theft in New York.

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