Most companies focus on federal laws that impose requirements on the employer-employee relationship, including those in the wage and hour arena. However, companies often pay a price for failing to consider, even unintentionally, the various obligations imposed on the state level. Thus, companies with offices located in New York, or that have employees who are based in and work in New York, should take notice of the statutory requirements that do exist in the “forgotten” New York State Labor Law.

To begin a summary of the “forgotten” New York State requirements, Section 190 of the New York Labor Law contains relevant definitions. “Employer” is defined broadly to include “any person, corporation or association employing any individual in any occupation, industry, trade, business or service.” “Employee” is defined, in a similarly insightful way, as “any person employed for hire by an employer in any employment.” These terms are intentionally defined broadly to effectuate the wide reach intended by these regulations.

The term “wages” is defined as “the earnings of an employee for labor or services rendered, regardless of whether the amount of earnings is determined on a time, piece, commission or other basis.” The definition of “clerical and other workers” (when defining the particular class of employee) includes all employees, other than manual workers, railroad workers and commissioned salespersons, but specifically exempts any person employed in a bona fide executive, administrative or professional capacity whose earnings are more than $900 per week.

Section 162 of the New York Labor Law provides that meal breaks of at least 30 minutes (in some cases 45) must be given when employees work certain specified shifts. State law also allows for leave to be taken for various other reasons, including the right to take leave to vote, donate blood and express breast milk.

Section 191[1][c] requires that the terms of employment for all commissioned salespeople be put in writing. The law does not impose any particular terms or conditions on the employment relationship, but does require that the terms of employment involving the earning and calculation of wages and commissions, whatever they may be, must be set forth in writing. The writing must be signed by both the employer and the commissioned salesperson, and must be retained by the employer for a minimum period of three years. Notably, if the employer fails to provide the required writing or fails to update any existing writing to conform to the new requirements, a presumption will arise in any subsequent dispute that the terms of employment are as presented by the commissioned salesperson—not the employer.

Section 191 addresses the timing of wage payments. For the majority of employees, wages must be paid in accordance with the agreed terms of employment, but not less frequently than semi-monthly. Commissioned salespersons must be paid wages, salary, drawing accounts, commissions and other monies earned or payable in accordance with the agreed terms of employment (as provided in writing under the new law described above). Sections 191-b and 191-c impose other obligations on the payment of commissions to sales representatives employed by certain persons or companies engaged in the business of manufacturing. In light of these provisions, it is critical for all employers who compensate employees at least in part based on commissions to create a policy identifying when a commission is deemed to be “earned” or “payable,” and to apply that policy consistently. Employers are required by law to pay the wages of terminated employees no later than the regular payday for the pay period during which the termination occurred.

Next, Section 192 of the Labor Law provides that an employer can only use a direct deposit method of wage payment if it obtains the advance written consent of the particular employee. This provision does not apply to a person engaged in a bona fide executive, administrative, or professional capacity who earns more than $900 per week.

Section 193 imposes strict prohibitions against making deductions from an employee’s wages. Specifically, an employer can only deduct money from an employee’s wages if the deduction is made in accordance with the provisions of a particular law or regulation, or if the deduction is expressly authorized in writing by the employee and the deduction is for the benefit of the employee, such as insurance premium payments, union dues, or pension or welfare benefits. This section was amended as of Nov. 6 to expand the list of permissible deductions, although employers are still generally prohibited from deducting an amount from wages due to a shortage found in an employee’s cash register, due to an employee’s failure to return a company uniform, or due to any lost, damaged, or unsold inventory, or any other violations of company policy. An employer may discipline an employee up to and including termination for violations of company policy, but may not make any unauthorized deductions from an employee’s wages.

Section 194 of the labor law prohibits an employer from paying unequal wages to employees on account of their gender when the employees work in the same establishment, perform equal work requiring equal skill, effort and responsibility, and perform under equal working conditions. However, pay rate differentials can be made if such differential is based on a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or any factor other than an employee’s gender.

Section 195 of the labor law imposes certain miscellaneous obligations that should be noted as well. Specifically, an employer must (1) notify its employees at the time of hiring, of the rate of pay and the regular pay day designated by the employer, (2) notify its employees of any changes in the designated pay day prior to the change, (3) notify a terminated employee in writing of the exact date of termination and the exact date of cancellation of employee benefits connected with the termination, and (4) notify its employees in writing or by publicly posting the employer’s policy on sick leave, vacation, personal leave, holidays and hours. An employer is not required by state law to actually provide sick leave, vacation, or personal leave, but must at least notify its employees of the employer’s policy on these matters.

The New York Labor Law provides significant criminal and civil penalties for violations, in addition to the right of aggrieved employees to bring a lawsuit seeking damages, together with 100 percent liquidated damages and attorneys’ fees. Therefore, it is critical that employers in New York understand and comply with the New York State Labor Law, in addition to the more familiar requirements contained in the applicable federal law.