New law closes wage theft loophole

Several federal, state and local laws protect employees’ rights, but they can be complicated to understand and interpret.

For instance, New York has laws prohibiting wage theft. However, employers were able to violate the intent of the law through various loopholes. Now, new legislation has closed those loopholes.

The No Wage Theft Loophole Act

Recently, former governor Andrew Cuomo signed the No Wage Theft Loophole Act. The legislation provides further clarification to prevent the intentional withholding of wages that has affected thousands of New Yorkers over the years.

Prior to this clarification, employers were using gaps in the language to intentionally withhold wages without technically violating the law. Some were getting around the words “any deduction” by withholding entire paychecks from workers. Others were withholding wages without noting the deductions on a person’s pay stub.

These actions took advantage of judicial gaps and compromised the ability of employees to collect wages earned.

The legislation now includes this language to provide precision and clarity: “There is no exception to liability under this section for the unauthorized failure to pay wages, benefits or wage supplements.”

What this means for employees and employers

It is more crucial than ever that employers be specific and transparent with employees regarding deductions, bonuses and compensation. Your employer can no longer withhold wages and claim doing so is legal because of the loopholes. Employees have the right to receive their full earned wages. Anything less can be grounds for legal action.

No matter your role in a business, legislative changes like this can affect your legal obligations and rights. Contact an experienced employment attorney to learn more.