Penalties for Unpaid Wages in New York

Employers in New York cannot willfully turn their backs to the state’s minimum wage and overtime laws and expect to get away with it. Courts or the Department of Labor are likely to impose hefty fines or penalties. Today’s employment law blog discusses the penalties employers on Long Island and in the rest of the state can face for willfully violating the law.

Both the federal Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”) set requirements for employers to follow including paying employees the minimum wage and overtime pay.

In 2010, seeking to provide workers with additional protection, former New York Governor Patterson signed the Wage Theft Prevention Act (the WTPA) into law which allows for the imposition of tougher penalties for wage theft violations.

For example, the WTPA increased the total amount of money that an employee could potentially recover for willful violations of the state’s wage and hour laws. This is referred to as liquidated damages. This term simply refers to an additional monetary award that an employee may be able to recover under the WTPA in addition to the unpaid wages award.

In fact, the changes allow an employee to recover double the amount of what he or she is owed by the employer. However, an employee can only recover liquidated damages if the employer violated the law in bad faith.

On April 6, 2018, in the case of Rana v. Islam, the Second Circuit Court of Appeals issued an employee friendly decision relating to wage theft. Rana filed a federal lawsuit alleging numerous violations of state and federal labor and human trafficking laws. In his lawsuit, Rana alleged that he was enslaved at the hands of former New York consul general of Bangladesh, Monirul Islam and his wife.

According to Rana, Islam and his wife successfully lured him into coming to the United States by falsely promising him “good working conditions” as a domestic worker in their Manhattan home, all while earning $3,000 monthly.

However, soon after arriving in the U.S., Rana learned that these promises were a far cry from the truth. Instead, Rana suffered eighteen months of horrific abuse and deplorable work conditions. For instance, according to the court’s decision, Rana was forced to work 16 to 20 hour days, seven days a week for 18 months without any compensation.  Any attempt to ask for his wages or leave the apartment was followed by death threats and physical abuse. During this time Rana was also allegedly forced to sleep on the kitchen floor or in a storage room and was only allowed to eat expired or leftover food.

Based on the seriousness of these and other facts, the lower district court awarded Rana $922,597.31 in damages. This number included liquidated damages under both the NYLL for $114,577.64 and the FLSA for $66,062. Facing substantial penalties, Islam appealed the court’s damages order to New York’s highest federal court – the Second Circuit Court of Appeals.

Prior to the Rana decision, New York courts often disagreed about whether or not a successful plaintiff could recover liquidated damages under both the FLSA and NYLL for the same action. On appeal, the Second Circuit pointed this out.

In an attempt to clarify this unsettled area of the law while at the same time making it clear that the court was not agreeing with Islam’s factual challenges to the award, the Second Circuit held that double recovery was not permitted. However, the court decided that successful plaintiffs could recover the larger award.

Accordingly, the Second Circuit concluded that Rana was entitled to the NYLL award in the amount of $144,677.64, in addition to other types of damages he had been awarded, but not the $66,062.00 that the FLSA allowed in liquidated damages.

The Rana decision should serve as a wake-up call for New York’s employers and as a reminder that the Department of Labor, as well as New York courts, continue to take wage theft seriously.

The Long Island employment lawyers at Famighetti & Weinick PLLC are experienced in handling wage theft lawsuits in New York, including claims of unpaid wages or unpaid overtime. If you have any questions about the FLSA, the NYLL, or any damages that you may be entitled to for an employer failing to properly pay you, contact a Long Island employment lawyer at 631-352-0050 to schedule a free consultation.

Today’s Long Island employment law blog was written by Law Clerk Thalia Olaya.