How Frequently Must You Pay Your Employees?

Frequency of Pay Under New York Law Frequency of pay refers to whether you pay your employees weekly, bi-weekly or monthly. New York Labor Law determines how frequently employees in different work classifications must receive pay. If you do not abide by the law, your employee has the legal right to sue you for damages. A recent case involved an employer who failed to consistently pay an employee. According to the New York Law Journal, the Appellate Division affirmed the employee’s right to take legal action against the employer. If there were a number of untimely paid wages, the case could result in significant liability for the employer. What Frequency of Pay Guidelines Must NY Employers Follow? Based on NYLL §191, employers must pay employees in different work classifications as follows: Manual workers must receive pay weekly. They cannot receive pay later than seven calendar days after the end of the week the worker earned the wages. If you own a non-profit organization, payment would be according to employment agreement terms, but no less frequently than semi-monthly. Salespersons receive commissions based on contract agreements. However, employers must pay them at least once a month and no later than the last day of the month after the month when the wages were earned. Frequency of payment differs when sales commissions are substantial or if additional compensation such as extra or incentive earnings is owed. Under these circumstances, salespersons must receive pay less frequently than once a month. Clerks or other workers must receive pay based on their employment agreement. However, they also must not receive pay less frequently than semi-monthly....

Arbitration of Employment Issues: Its History and Growing Use

How Employment Arbitration Became Widespread Arbitration of employment issues was rare before the 1990’s. In fact, in 1992, a little more than 2 percent of the U.S. workforce was subject to mandatory arbitration for employment disputes. A study done by the Economic Policy Institute showed that use of mandatory arbitration rose after a series of Supreme Court decisions that began in 1991. To What Extent Has Arbitration of Employment Issues Grown? The following statistics show the increase of the mandatory arbitration in employment issues: During the early 2000s, mandatory employment arbitration doubled Today, more than 55 percent of employees must undergo mandatory arbitration An estimated 53.9 percent of nonunion private-sector employers use mandatory arbitration. A greater percentage of companies with 1,000 or more employers use mandatory arbitration. (65.1 percent) More than 60 million workers in the U.S. cannot sue but must arbitrate disputed employment issues Class Action Waivers in Arbitration Agreements One of the more recently disputed issues regarding mandatory arbitration has been regarding class action litigation. Employers began incorporating class action waivers in their mandatory arbitration agreements. A class action or collective lawsuit taken against an employer would seek damages for all employees in that class. For example, a sexual harassment lawsuit could seek compensation for a whole class of plaintiffs that were sexually harassed. Being forced to arbitrate a class action complaint could be very costly for employers and would complicate the direct, simplified nature of arbitration. For this reason, employers began including waivers in the agreements. The disputed legal point addressed whether mandatory arbitration included class action matters. The Supreme Court ruled that unless both parties...

NY Mandatory Arbitration Agreements Seem to Be Holding Up

Federal Laws Take Precedence Over New NY State Law Mandatory arbitration agreements have recently born the brunt of hostility in New York. However, the aggressive sentiment against them does not seem to be changing the outcome. The NY State legislature passed a statute in 2018 (§7515 of the CPLR) to limit mandatory arbitration for certain legal situations. The statute made mandatory arbitration “null and void” for sexual harassment claims. In fact, the legislature amended the statute in October 19, to prohibit mandatory arbitration in all discrimination claims, not just sexual harassment. The Federal Courts Have Ruled in Favor of Arbitration Agreements Despite the New York legislature’s efforts, federal courts have ruled that the Federal Arbitration Act (FAA) preempts New York’s state law. According to the New York Law Journal, the federal district court in Latin v. Morgan Stanley & Co. allowed the employer to compel the sexual harassment complainant to arbitration. The court based its ruling on the FAA. In addition, the U.S. Supreme Court ruled similarly in the case Epic Sys. v. Lewis, 138 S. Ct. 1612 (2018)). It permitted arbitration based on federal law. Why Do Most Employers Prefer Arbitration? The use of mandatory arbitration has grown in the United States. Research done by the Economic Policy Institute on mandatory arbitration indicates that in such arbitrations, employers usually come out on top. While only about 2 percent of employers used arbitration in 1992, today the number is greater than 55 percent. Large companies in particular are likely to have mandatory arbitration clauses in their employment contracts. In addition to favoring the employer, arbitration is also cost-effective. It...

Overtime Rates: U.S. Department of Labor (DOL) Final Rule

What Pay Rates Include and Can Exclude Overtime rates received clarification when the DOL announced a Final Rule on December 12, 2019 that goes into effect January 15, 2020. This is the first DOL substantial update in over 50 years that affects regular rate requirements. It tells employers what payment employers should include and should exclude in the time and a half, overtime pay calculation. It also greatly enables employers to offer perks and benefits to employees. How Do Perks and Benefits Figure into Regular Pay and Overtime Rates? Nailing down the pay rate to use when paying time and a half has been unclear for many years. The DOL has now established a set standard. Employers can exclude the following from regular pay rates: Remuneration for certain parking benefits, wellness programs, gym access, fitness classes, onsite specialist treatment, employee discounts on retail good and services, certain tuition benefits and adoption assistance Payments for unused paid leave (includes sick leave or paid time off) Payments for certain penalties required under state and local scheduling laws Paid expenses, such as cell phone plans, credentialing exam fees, organization membership fees, travel fees (even if not solely for employer’s benefit and also that do not exceed maximum travel reimbursement under the Federal Travel Regulation System and that are reasonable payments based on IRS substantiation amounts) Certain sign-on bonuses and longevity bonuses Discretionary bonuses (whether labeled discretionary or not) Contributions to benefit plans for accident, unemployment, legal services or other events that are capable of causing future financial hardship or expense. The Final Rule provides factual examples that clarify whether a bonus is...

New York Unpaid Wages Lien Bill: NY Employment Defense Attorneys

Cuomo Vetoes Liens Against Employers The Unpaid Wages Lien Bill passed by the NY State Senate and Assembly would have permitted employees to obtain liens against their employer’s real and personal property. The bill allowed for liens when employees claimed their employers owed them unpaid wages. The intent of the Unpaid Wages Lien Bill 2844–B was to give employees more extensive rights to deal with wage theft. Specifically, the bill would have allowed them to hold shareholders of non-publicly traded corporations personally liable for wage theft. Wage theft victims would have been able to hold the ten members, who held the largest interests in a company, personally liable for wage theft. What Is a Wage Claim? Basically, a wage claim is a claim for wages that were unpaid to an employee in violation of a contract. Unpaid overtime, unpaid sales commissions, unpaid contractor’s fees and of course a failure to pay wages at all could be subject to a wage claim. What Types of Liens Were Part of the Unpaid Wages Lien Bill? The bill included a mechanic’s lien and employee’s lien on property. For example, a contractor, subcontractor, laborer, material man, landscape gardener, nurseryman or person or corporation seeking ornamental trees, roses, shrubbery, vines, fruit trees or small fruit trees can have a lien for the principal and interest of the value or price agreed upon for labor. This would be a mechanics lien. The mechanic’s lien could not be for a sum greater than the sum earned and unpaid. An employee’s lien was a lien against property or the employer’s interest in property for the value of...