New York Considering Amendment to Labor Law § 198 That Would Double Liquidated Damages Penalty for Failure to Pay Employees’ Wages

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The New York State Assembly is considering a proposed amendment to Labor Law § 198 that would significantly increase the amount of liquidated damages that an employer must pay for failure to pay employees’ wages under certain situations as required by law.

The current version of Labor Law § 198 requires an employer to pay liquidated damages to an employee who receives less than the full wage to which he or she is entitled.  The amount of the liquidated damages award cannot exceed one hundred percent (100%) of the total amount of wages due to the employee.

On January 15, 2013, Assemblymember Annette Robinson introduced New York Assembly Bill No. 2499, which seeks to double Section 198’s liquidated damages provision under two circumstances.  Under the proposal, if an employer fails to pay an employee’s wages for more than thirty days, or if an employer fails to pay the wages of ten or more employees, the employer may be required to pay liquidated damages equal to twice the amount of wages due to the employee(s).

This marks the second time in less than two years in which the New York State Legislature has sought to increase penalties against employers for failure to pay wages.  On April 9, 2011, Section 198 was amended to quadruple the liquidated damages provision from twenty-five percent (25%) to the current one hundred percent (100%) of the total unpaid wages due to the employee.  Bill No. 2499, which seeks to double that figure to two hundred percent (200%), represents a clear message from the New York State Legislature that employers will pay dearly for their failure to pay employees’ wages.

Bill No. 2499 is presently before the Assembly’s Committee on Labor.  If passed, the proposed amendment will go into effect ninety days after it becomes a law.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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