Since the Wage Theft Prevention Act (“WTPA”) became effective April 9, 2011, New York employers have faced harsher penalties for failing to pay employees minimum wages and overtime. As reported in two previous Act Now Advisory’s, (December 15, 2010, and April 4, 2011) the WTPA, which amended New York’s Labor Law, significantly increased employers’ penalties for unpaid wage and hour violations, among other things.
Prior to the effective date of the WTPA, liquidated damages were capped at 25 percent of the unpaid wages due. Under the WPTA, however, employees can recover liquidated damages equal to 100 percent of the total amount of unpaid wages due, in addition to the full amount of any underpayment, all reasonable attorney’s fees and prejudgment interest. While the WTPA does not expressly provide that it applies retroactively to violations that occurred prior to its effective date, employers should be aware that their potential exposure to the 100 percent liquidated damages provision could extend back in time further than they thought since a New York State Supreme Court decision holding that the liquidated damages provision under the WTPA applies retroactively—although this view has not been adopted uniformly.