What's happening
This bill clarifies that there are no exceptions for employers regarding liability for wage theft, ensuring all employees can recover full wages, benefits, and supplements.
Why it matters
Eliminates any legal ambiguity or loopholes that employers could use to avoid liability for not paying wages, benefits, or supplements, strengthening protections for all workers.
Ensures that all employees—regardless of job type, industry, or employer—have an unqualified right to recover the full amount they are owed, making enforcement of wage rights more straightforward.
Clarifies legislative intent and aligns different sections of New York labor law, which could make it easier for courts to consistently rule in favor of employees seeking to recover stolen wages.
Highlights the employer’s duty to provide transparent information on wage calculations, which could empower employees to recognize and challenge wage theft more effectively.
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Who cares
Headline styles
Close Wage Theft Loopholes
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to labor
- Delivered to assembly
- Passed senateVote 50–10
- Advanced to third reading
- 2nd report cal.
- 1st report cal.575
- Referred to labor
- Referred to labor
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Close Wage Theft Loopholes
In Assembly Committee · Labor · Sponsor Jo Anne Simon
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5777
2019-2020 Regular Sessions
IN SENATE
May 14, 2019
Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to wage theft
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Legislative findings. Article 6 of the labor law, and sections 193 and 198(3) in particular, reflects New York's longstanding policy against the forfeiture of earned but undistributed wages. The purpose of this remedial amendment is to clarify that: (a) the unauthorized failure to pay wages, benefits and wage supplements has always been encompassed by the prohibitions of section 193, see, e.g., Ryan v Kellogg Partners Inst. Servs., 19 N.Y. 3d 1, 16 (2012) (correctly holding that employer's neglect to pay sum that constitutes a "wage" violated section 193); and (b) consistent with established principles of statutory construction, section 193 should be harmonized with section 198(3)'s guarantee that "All employees shall have the right to recover full wages, benefits and wage supplements and liquidated damages." A wage is either owed or it is not. Employers have a statutory duty to provide employees with enough information to know how their employment compensation is calculated. The legislature thus finds that it has a responsibility to harmonize these two sections of the labor law to clarify for the courts once and for all that wage theft remains completely and without exception in violation of statute and all employees are entitled to full wages, benefits and wage supplements earned.
§ 2. This act shall be known and may be cited as the "No wage theft loophole act".
§ 3. Section 193 of the labor law is amended by adding a new subdivision 5 to read as follows:
5. There is no exception to liability under this section for the unauthorized failure to pay wages, benefits or wage supplements.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11710-01-9
S. 5777 2
§ 4. Subdivision 3 of section 198 of the labor law, as amended by chapter 2 of the laws of 2015, is amended to read as follows:
3. Notwithstanding any other provision of law, an action to recover upon a liability imposed by this article must be commenced within six years. The statute of limitations shall be tolled from the date an employee files a complaint with the commissioner or the commissioner commences an investigation, whichever is earlier, until an order to comply issued by the commissioner becomes final, or where the commissioner does not issue an order, until the date on which the commissioner notifies the complainant that the investigation has concluded. Investigation by the commissioner shall not be a prerequisite to nor a bar against a person bringing a civil action under this section. All employees shall have the right to recover full wages, benefits and wage supplements and liquidated damages accrued during the six years previous to the commencing of such action, whether such action is instituted by the employee or by the commissioner. There is no exception to liability under this section for the unauthorized failure to pay wages, benefits or wage supplements.
§ 5. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to wage theft
Purpose or general idea of bill
To clarify that Article 6 of New York's Labor Law prohibits wage theft without exception.
Summary of provisions
Section 1 of the bill outlines the legislature's finding that different sections of Article 6 of New York's Labor Law must be amended to clarify that wage theft remains illegal without exception.
Read the full memo (802 words)
Section 2 establishes that this act shall be known as the "No Wage Theft Loophole Act."
Section 3 provides that there is no exception to liability under
Section 193 of the Labor Law for failure to pay wages.
Section 4 provides that there is no exception to liability under
Section 198 of the Labor Law for failure to pay wages, benefits or wage supplements.
Section 5 provides that this act shall take effect immediately.
Justification
Article 6 of the Labor Law was created to prevent employers from bene- fitting from the fruits of their employees' labor by withholding wages. If interpreted correctly, this broad-ranging statute allows prevailing plaintiffs to recover unpaid wages, attorney's fees, and in many cases liquidated damages.
To the detriment of employees everywhere, however, the statute is often interpreted extremely narrowly by courts who misconstrue or overlook its rights-affirming language. Section 193 of the Labor Law prohibits any deductions from wages unless the deduction is expressly authorized by the employee in writing and for his or her own benefit. While this language seems clear enough on its face to ward against any wage theft, much confusion has arisen over the term "deduction" and what this could possibly represent.
For many of us, "deduction" calls to mind a literal notation on a pays- tub of wages subtracted, which leads to the question: what if the wage theft is not denoted by a line on a paystub? One can imagine a whole host of scenarios, for example, which clearly violate the intent of Section 193 without conforming to this narrow definition of a "deduction." An employer could withhold wages but simply fail to note the deduction on a paystub, for example. Alternatively, an employer could deny the existence of the full amount of wages owed and claim that the employee's paycheck that month was a discretionary amount that the employer decided based on the quality of the employee's work. Or, an employer could choose to withhold the pay entirely, as the statute simply prohibits "ANY" deduction. But does "any" mean "all"? What if the statute does not prohibit the withholding of an entire paycheck?
While it may seem obvious that a "deduction" in the context of wage theft is meant to imply the taking of wages, case law on the provisions of Article 6 has painted a much more nuanced and confusing picture. In Gottlieb v. Kenneth D. Laub & Co, for example, the Court of Appeals concluded that Section 198, the part of the Labor Law dealing with penalties and recovery actions, was not "substantive." Because of this court ruling, the legislature then amended Section 198 as part of the Unpaid Wages Prohibition Act in 1997 to declare that "all employees shall have the right to recover full wages, benefits and wage supple- ments accrued during the six years previous to the commencing of such action."
While it seems the meaning of this provision could hardly be plainer, there was then a later court decision (Malinowski v. Wall Street Source, Inc.) which confused the issue further. The court in Malinowski cited Gottlieb in its ruling, believing that the current language of Section 198 was in place at the time of the Gottlieb ruling and thus did not really mean anything. The court failed to realize that the rights-af- firming language of Section 198 was added post-Gottlieb precisely BECAUSE of Gottlieb. Subsequent courts have ruled in similar ways to reinforce the misled notion that Section 198 does not uphold the right of recovery for full wages. New York's Labor Law, then, which should be a model for the rest of the nation in its defense of employee rights, finds itself watered down by a judicially created loophole.
It is thus necessary for the legislature to close this judicially-creat- ed loophole once and for all to clarify that employees must be paid what they are owed, no matter what. Doing so will help defend the rights of all employees, including low-income employees who are more likely to be subject to wage theft. New York cannot in good faith claim to be one of the most progressive states in the nation when it comes to labor rights if we fail to clarify that wage theft is, and has always been, complete- ly prohibited within our boundaries.
Prior legislative history
New bill
Fiscal implications
None
Effective date
Immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.