Cuomo Signs New York “No Wage Theft Loophole Act” Into Law

On August 20, 2021, New York Governor Andrew Cuomo signed legislation to prevent businesses from committing wage theft against their employees. The “No Wage Theft Loophole Act” changes Article 6 of New York Labor Law to eliminate any exemptions that might allow employers to deprive their employees of wages to which they are fairly and legally entitled.

The Governor’s action will make it much easier for workers to file claims against their employers for owed and unpaid wages. The new legislation closed a previously applied loophole when an employer chose to withhold all of an employee’s wages rather than just a portion of those wages. Because the initial wording of Article 6 referred to “unlawful deductions,” it was deemed only to apply to cases in which the employee did receive at least some of the wages owed to them.

The “No Wage Theft Loophole Act” adds a new subdivision 5 to Section 193. It also adds this text to the end of subdivision 3 of Section 198 of Article 6:

• “There is no exception to liability under this section for the unauthorized failure to pay wages, benefits or wage supplements.”

This will remove a loophole that employers could otherwise use to avoid lawsuits by their workers, which had already resulted in the 2009 dismissal of a Section 193 claim by an employee based on the fact that no amounts were “deducted” from her wages. Instead, the court ruled that the employer “simply failed to pay her all the wages she had earned.” The new legislation removes this potential interpretation of the law.

At Risman & Risman, P.C., we offer practical help for workers in taking on discrimination and unjust treatment in the workplace. To learn more about the legal services we provide, give us a call today at 212-233-6400. We look forward to assisting your legal needs.