Criminal Penalties for Failure to Comply With New York Labor Law
New York State has some of the strictest labor laws in the country. New York Labor Law (NYLL) 198-a(1) criminally punishes New York employers who fail to pay wages according to the NYLL by making the first violation a misdemeanor, and second violation within six years a felony. The maximum penalty is 1 year and 1 day in prison and a fine of $20,000. NYLL 193-c proscribes that employers that fail to pay or provide benefits or wage supplements within 30 days of the date that they are required to pay are guilty of a misdemeanor. Knowing violations by corporate executives and corporations that allow for non-payment of required wages or benefits may incur criminal penalties, fines, and imprisonment.
If you or one of your business partners has been accused of failing to pay wages it is imperative that you call one of our New York white collar criminal defense lawyers today. Our office’s aggressive and knowledgeable New York employment crimes lawyers will attack the prosecutor’s case on various grounds to help beat your case.
According to New York Business Corporation Law 630 the 10 largest shareholders of a corporation are personally liable to pay the wages and salaries of their employees and therefore may be held personally liable for failure to pay wages. Similarly, the largest shareholders in LLCs may also be held personally liable for unpaid wages. In order to recover from either a corporation or LLC for unpaid wages the plaintiff must give written notice to the shareholder members. Actions against LLCs must be brought within 90 days of judgments against said corporation.
Whistleblower laws protect employees who report companies to the Department of Labor regarding non-payment of their wages. Should an employer, agent of the employer, or corporate officer fire or otherwise punish an employee who reports the company to the Department of Labor, that employer, agent, or officer would be guilty of a misdemeanor. Repeated violations incur more serious penalties. A second offense within 6 years triggers felony liability, with a maximum penalty of imprisonment for 1 year and 1 day and a fine of $20,000.00. The same penalty structure is applied to non-payment of wages and failure to keep accurate wage records as required by the NYLL. Further adding to the severe financial damage that can occur from suppressing whistleblowers, whistleblowers also have a private cause of action accessible to them via NYLL 741.
In some circumstances, failure to pay wages criminal prosecutions may be preempted by 29 USC 1001 et seq the Employee Retirement Income Security Act of 1974. The Appellate Division, Third Department held that an employer who failed to contribute to their employees 401k plans could not be charged with state level crimes for failing to pay benefits as the charges were preempted by ERISA. Bankruptcy of the employer may also foreclose criminal prosecution under some circumstances. In one case where employees were discharged by a bankruptcy trustee and vacation benefits had not been paid out, the court reasoned that due to the fact that statutes prohibiting the failure to of employers pay wages were to be construed strictly, and the fact that the bankruptcy trustee was not their employer, prosecution for failing to pay vacation benefits was prohibited.
If you or someone you know has been accused of any labor law crime, it is imperative that you call one of our experienced New York white collar criminal defense attorneys today. Our offices aggressive and knowledgeable New York employment crimes attorneys will fight the prosecutor’s case and achieve the best possible results for you.