More Amendments To New York's Labor Law

Effective November 24, 2009, New York Labor Law Section 198 will impose an award of liquidated damages in a sum equal to 25% of any amount in underpaid wages found to be due after an administrative proceeding unless the employer can show a good faith basis for its belief that its underpayment was in compliance with the law. Liquidated damages will be available in a court action commenced by an employee under Labor Law Section 663 (as amended) to recover unpaid wages based on the same criterion. This is a wholesale reversal of the long-standing burden of proof by which liquidated damages were awarded only if the employee could establish that the employer’s underpayment of wages was willful. Will the automatic imposition of liquidated damages have a deterrent effect? Only time will tell; however, it will plainly increase the amount of damage awards.

Also effective on November 24, 2009 is an amendment to New York Labor Law Section 215 increasing monetary penalties against employers that have retaliated against employees who exercise their rights under the Labor Law. The new penalty range will increase to a minimum of $1,000 up to a maximum of $10,000. In addition to increasing the number of activities for which an employee may be subjected to retaliation, the amendment expands the universe of liability. Under prior law, only corporations could be held liable for retaliation; however, limited liability companies and partnerships will now be liable as well, with individual liability for their officers and agents.