Sen. Diane Savino proclaimed Dec. 13 that New York had struck a blow for the little guy with the signing into law of a bill to prevent low-wage employee abuse known as "wage theft."
Savino, D-Staten Island, was the Senate sponsor of the Wage Theft Prevention Act (A.11726/S.8380), which helps protect retail, trades and service industry employees from unfair employment practices, such as bosses withholding contractually obligated pay. At a signing ceremony in New York City, Gov. David A. Paterson, joined by Savino and Assembly bill sponsor Carl Heastie, D-Bronx, put his signature on the legislation.
"Everybody knows that every dollar counts, and everybody has to stretch the dollar whether you are in business or the private sector," Paterson said. "There are families struggling week to week just trying to make ends meet. In the midst of this it is galling to know that hard working New Yorkers are having their resources pinched by unscrupulous employers. Maverick wages below the minimum [wage], outright theft and unpaid overtime are just some of the practices that have served as obstacles for those who toil at restaurants, construction sites and retail shops.
"The worst thing is that they can’t do anything about it," Paterson continued. "If you speak up, you will be terminated, and the situation is the same. There is no administration remedy or no voice. That ends today."
The new labor law expands criminal penalties for wage theft to up to one year in jail and a $5,000 dollar fine.
Both Savino and Heastie spoke enthusiastically about the new law. Savino said it would ensure "fairness, justice, equity for all of us."
"This is a major victory for those who can’t speak up for themselves," Heastie said. "This is one of my prouder days a wonderful day for all New Yorkers."
One of the major groups that pushed for the legislation was Make the Road New York, an organization in New York City that fights for the rights of low-income, primarily Hispanic immigrants. The group was represented at the event by Deputy Director Deborah Axt and a volunteer, Augusto Fernandez, who cited examples of wage theft victims he had helped.
Fernandez told the story of Luis Olivo who he said worked at a supermarket in the Bronx for seven years as a bagger for 13 hours a day and only took home pocket change tips. Another example he gave was a woman named Margarita who was followed home and slashed with a knife by a cousin of her boss after she filed a claim for thousands of dollars of unpaid overtime.
According to Make the Road New York, in New York City alone, employers who engage in wage theft steal more than $18.4 million a week and $1 billion a year from their workers.
According to New York City Council resolution 245-a, which had called on the state Legislature to pass the wage theft bill, the average low-wage worker in New York state loses $3,016 per year, which is about 15 percent of their annual income.
"Currently penalties are so minor that employers see it as the cost of doing business," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. "They end up paying less if they get caught then if they actually paid the workers what they are due."
Paterson said the law "will establish a bulwark of remedies" for protecting employees.
According to the bill summary, wage theft is when "a large number of employees are earning less than minimum wage and others are being paid less than their correct wage. Many employees are also not all receiving the appropriate amount of overtime compensation and many employers are failing to adequately inform their employees of their wages and how they are calculated in a language they can comprehend."
The new law includes stringent reporting requirements and an increase in the amount of wages victims can recover in damages above and beyond lost wages, rising from 25 percent to 100. The legislation also grants the labor commissioner discretion to add an additional 15 percent damage against employers who default on an order to comply with the law for more than 90 days.
Additionally, the law requires employers to give their employees translated wage rate notices provided by the Department of Labor and prohibits the kind of retaliation that occurred in Margarita’s case by "persons who do not meet the technical definition of ’employer’ under the statute but who an employee can prove retaliated."
"This is not just a struggle between labor and business; these are crimes," Paterson said. "We’re going to catch a few people and make them pay and let them serve as an example to people who think there is a different set of rules for them. All New Yorkers deserve their pay, every cent of it, and the Wage Theft Protection Act is going to give individuals who’ve been violated a voice and protection."