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How To Handle Wage Disputes With Employees In New York

Disputes concerning wages are becoming more common due to changes in federal and state employee compensation legislation. Various methods of handling these disagreements exist, ranging from negotiation, arbitration, and mediation to litigation. Learn the different ways of dealing with wage disputes with employees in New York, and find out how a New York employer defense lawyer can assist with these claims and other employment-related issues; contact Schwab & Gasparini to arrange a consultation today by calling our Syracuse branch at (315) 422-1333, our Albany location at (518) 591-4664, or our White Plains or Hudson Valley sites at (914) 304-4353.

What Are Wage Disputes?

Wage and hour disputes refer to disagreements between employers and employees concerning wage payments. In these altercations, an employee might state they have received wages that do not reflect the work they have completed; alternatively, they may not receive any wages for a particular period. Various federal and state wage laws cover this area, aiming to make sure employees get fair compensation, as outlined below.

Federal Laws

The primary federal law concerning hour and wage disagreements is the Fair Labor Standards Act (FLSA), which sets minimum requirements employers have to follow regarding employee compensation. The FLSA establishes a minimum hourly wage, which is $7.25 per hour as specified by the Department of Labor (DOL), and overtime rates. Per the Office of Personnel Management (OPM), the FLSA states that employers must pay approved overtime equating to 1.5 times the employee’s hourly rate multiplied by the extra hours worked (past 40 per week).

Worth noting is that some workers are exempt from FLSA protections; exempt employees typically have salaries and hold professional, administrative, or executive roles, whereas non-exempt workers usually have wages based on an hourly rate and work in non-executive, non-administrative, and non-professional positions. Employers may violate the FLSA if they misclassify employees, miscalculate pay rates, or do not pay minimum wages, authorized overtime, or earned bonuses or commissions. 

State Laws

Some states have introduced their own laws related to wages offering additional employee wage standards and protections, such as those linked to breaks, unauthorized deductions, tip-sharing practices, and working off-the-clock. For instance, in New York, as of 2024, depending on the size of the employer, the minimum wage ranges between $15 and $16 per hour. Regarding paid sick leave, in New York, and depending on the size of the organization and its net income, an employer must provide between 40 and 56 hours of paid sick leave annually.

Additionally, New York employees who have worked at least 6 months at an organization can take a maximum of 12 weeks of family leave, while earning up to 67% of their salary, to care for seriously ill family members, bond with new children, or fulfill caring obligations arising due to a family member’s involvement in the military. In terms of meal and rest breaks, all New York employees can take an additional break of 20 minutes when working between 5 pm and 7 pm, provided they worked before 11 am until after 7 pm; other breaks are also available, depending on whether the employee is a non-factory or factory worker. Find out more about how to effectively handle wage disputes with employees in New York; contact Schwab & Gasparini today to speak to an experienced New York employer defense attorney.

Can Employees Discuss Wages in New York?

In New York, employers cannot restrict wage discussions or disclosures among employees. However, employers can have a policy in place that introduces reasonable restrictions regarding the time, manner, and location of workplace discussions regarding wages. These limitations cannot completely prevent these discussions or wage disclosures; similarly, employees have no obligation to participate in these disclosures or discussions, and staff members with access to wage information due to their work responsibilities may face wage disclosure limitations.

What Is the Statute of Limitations on Wage Claims in NY?

The statute of limitations on New York wage claims is generally six years. For instance, if the claim concerns unpaid overtime or minimum wages, employees have six years to file a claim from the date that the wages were due. In a similar fashion, for claims related to other forms of unpaid wages, such as bonuses or commissions, employees must file within six years.

Can Employers Retaliate Against Employees Who Lodge Wage and Hour Complaints?

An employer cannot punish employees who file complaints concerning wages; for instance, they cannot reduce an employee’s pay or hours or demote, suspend, or terminate the employee. If an employer responds in this manner, an employee may file a claim to seek compensation, such as lost wages and benefits, attorney fees, and unpaid bonuses or commissions.

Handling Employee Wage Disputes in New York

Employers can introduce methods of preventing hour and wage disagreements from arising in the first place, and they may also adopt strategies for stopping these disagreements from escalating further when they do occur. Below is a discussion of these factors.

Understand Labor Laws

Learn about key federal and state labor laws, including the FLSA and the New York Wage Theft Prevention Act (WTPA), which establishes employer requirements for wage notices and statements. With this information, employers can ensure they comply with wage laws and avoid potential wage disputes. Staying aware of federal and state wage laws also allows employers to maintain compliance; this practice can help employers avoid penalties from the New York State Department of Labor (DOL), which carries out frequent employer investigations and inspections to identify labor law violations.

Be Transparent With Wage Communications

Make sure employees receive a written notice outlining their wage and overtime rate and pay frequency during their onboarding; if an employee’s wage terms change at any point, communicate these adjustments as quickly as possible. When issuing payslips, ensure these note the number of hours worked, deductions, and the employee’s rate of pay.

Keep Accurate Records

Maintain thorough and accurate wage records, including the number of hours worked by each employee and the wages paid to them, including additional benefits or compensation, as well as any wage-related agreements. According to the New York State Bar Association (NYSBA), employers must retain this information for at least six years. Additionally, employers must report employee details, including name, social security number, address, date of hire, and employer ID number, to the state within 20 days.

Investigate Disputes Promptly

When employees lodge wage complaints, investigate them thoroughly and promptly by interviewing the employee and their line manager and reviewing payroll documentation and time records. Aim to resolve the dispute quickly to prevent the complaints from leading to legal action; if the employer made an error regarding the wages, rectify it straight away by paying the owed wages with any interest accrued.

Establish Dispute Resolution Procedures

Set up clear procedures for raising employee wage complaints and nominate a department or individual to handle these disputes. Ask staff to make written complaints to ensure the recording of all issues. To help prevent litigation, which is costly and time-consuming, consider introducing alternative dispute resolution (ADR) processes, such as arbitration or mediation, to resolve wage disagreements.

Introduce Preventative Measures

To prevent wage disagreements from arising, employers can conduct frequent audits of the organization’s payroll practices to identify and correct possible wage-related issues before they can escalate into legal disputes. They may also train their payroll staff and managers to make sure these individuals have a sound understanding of hour and wage laws and wage-associated company policies.

Speak to a New York Employer Defense Attorney To Learn More

Employers require an understanding of wage regulations, employee rights, and wage and hours reporting to adhere to federal and local labor laws and avoid penalties. Moreover, they can prevent legal disputes by correctly classifying employees, adhering to minimum wage provisions, and keeping accurate records. Understand how to handle employee wage disputes in greater detail, and discover how a knowledgeable New York employer defense attorney from Schwab & Gasparini might help; call our offices in Albany at (518) 591-4664, Syracuse at (315) 422-1333, or Hudson Valley or White Plains at (914) 304-4353.

Mon Sep 23 2024, 12:00am