The New York Wage Payment Law sounds rather simple, but it’s perhaps the most complicated employment law in the state. Full of traps for the unwary, the law can spell big trouble for even innocent mistakes, with fines of up to $20,000 per violation.
The law covers all New York private employers, even those with only one employee, and requires at least two paydays per calendar month unless the employer specifically sets another pay period. If a payday falls on a non-business day, you must dispense payroll on the last business day prior to the regularly scheduled payday.
The wage payment law stipulates the conditions under which you may withhold or divert any portion of an employee’s wages. In addition to all payroll taxes and other diversions required or authorized by the federal or state government, you may withhold or divert (with employees’ written permission):
- Insurance premiums.
- Pension or health and welfare benefits.
- Contributions to charitable organizations.
- Payments for U.S. bonds.
- Union dues.
- Similar payments for the benefit of employees.
Also, you must pay wage supplements, such as contributions to 401(k) plans and health and welfare plans, on time or risk a misdemeanor conviction, with fines as high as $20,000. Second offenses within a six-year period can mean jail time.
The New York Wage Payment Law also covers payment of final wages upon termination, whether voluntary or involuntary. A final check must include all money due to the worker on the next regularly scheduled payday. You must pay all sales commissions due as of the date of termination within five business days. (Pay any subsequent commissions within five days of their due date.)
In the case of a deceased employee, you should send the final paycheck to the beneficiary designated in the employee’s will. If it lists no clear beneficiary, employers must pay family members in this order:
- Surviving spouse.
- Children 18 years of age and older in equal shares or the guardian of children under age 18.
- Father and mother or survivor.
- Sisters and brothers or the person who pays the funeral expenses.
The Division of Labor Standards in the State Department of Labor administers the law. For more information, go to www.labor.state.ny.us/workerprotection/laborstandards/workprot/payofwag.shtm.