Having employees, even as a small business owner, can be complicated. Many employers, especially small business owners, are not aware of the complex state requirements surrounding employee recordkeeping, wage and payroll compliance.

Under the New York State Labor Law, employers are required to keep records for six years that contain the hourly and overtime rates of pay, and the number of regular and overtime hours worked for all nonexempt employees.  The employee’s name and address, social security number, employee identification number, description of occupation, and total wages including the value of any meal or lodging credits, if any, are also required to be kept for executive, administrative or professional employees.

What is the New York Wage Theft Prevention Act (NYWTPA)?

Wage theft is whenPayroll Wage Compliance an employer denies salary payment or other benefits to an employee. To protect employees from wage theft, New York State enacted the New York Wage Theft Prevention Act (NYWTPA) in 2011, that was amended in 2014 and again in 2020. Under the NYWTPA,  all private sector employers must maintain, for a minimum of six (6) years, “true, and accurate payroll records showing for each week worked the hours worked; the rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other; gross wages; deductions; allowances, if any, claimed as part of the minimum wage; and net wages for each employee.” See, Wage Theft Prevention Act (ny.gov)

Due to the new paid sick leave laws enacted in 2020 that affected all employers, recent amendments to the NYWTPA also mandate all employers to maintain records of the “amount of sick leave provided to each employee,” for at least six years.

For employees who are not exempt from overtime under New York Law, employers must keep records of their regular hourly rate(s) of pay, overtime rate(s) of pay, number of regular hours worked, and number of overtime hours worked.

The WTPA requires employers to give written notice of wage and pay rates to each new employee hired. The language of the notice must be in English and in the employee’s primary language if the Department of Labor has a translated notice in such language. The employee should be directed to sign and date the completed notice. Each employee must be provided a copy.

An employee acknowledgment form is required each time an employer provides the notice.  The employer must retain a written acknowledgment of the receipt of the notice signed and dated by each employee.

When Should the Notice of Wage Rates be Provided?

The notice of wage rates must be provided at the time the employee is hired and within seven (7) days of a change if the change is not contained in the employee’s payroll stub for the next pay period. An employee must be notified in writing before an employer may reduce the employee’s wage rate.  Employers in the hospitality industry must give notice every time a wage rate changes.

Penalties and Damages Against Employers

If an employer fails to provide its employees with the required wage statements, the employer may have to pay a penalty of $50 per day, per employee for failure to provide wage statements. The penalty is capped at $5,000 per employee.

Thus, it is important to stay on top of these issues and consult with an attorney to verify that all bases are covered when it comes to employee recordkeeping compliance.



This article is intended for general information and educational purposes only and should not be considered legal advice or counsel. No attorney-client relationship is created by the distribution of this article. The substance of this article is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2021 Regina Sarkis, Esq.