New York Adds Wage Theft as a Form of Criminal LarcenyOctober 23, 2023
On September 6, 2023, New York Governor Kathy Hochul signed an amendment to the New York Penal Law, which designates wage theft as a form of criminal larceny. The amendment is effective immediately.
Under existing law, “[a] person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof.” N.Y. Penal Law § 155.05(1). Larceny is a felony in New York if the value of the stolen property exceeds $1,000. N.Y. Penal Law § 155.30(1).
The amendment to the Penal Law now defines “property” to include “compensation for labor or services.” The amendment also adds “wage theft” as a form of criminal larceny. Pursuant to the amendment: “A person obtains property by wage theft when he or she hires a person to perform services and the person performs such services and the person does not pay wages, at the minimum wage rate and overtime, or promised wage, if greater than the minimum wage rate and overtime, to said person for work performed.” N.Y. Penal Law § 155.05(2)(f).
Although wage theft already carried the potential for criminal penalties under the New York Labor Law, the amendment to the Penal Law aims to increase those penalties. Significantly, the amendment allows prosecutors to aggregate an employer’s nonpayments or underpayments of wages across multiple victims into one prosecution, even if the events occurred in multiple counties. This aggregation will lead to harsher penalties because it increases the likelihood that cases exceed the felony amount threshold.
Employers may be able to rely on the larceny statute’s “intent to deprive” requirement as a defense to any prosecution if their failure to comply was unintentional. However, employers should seek to avoid the need for that defense by having updated policies and procedures in place (particularly with regard to tracking work hours and paying appropriately), maintaining accurate pay records, providing accurate wage statement and notices, and consistently and routinely reviewing their compensation policies and practices to ensure compliance with all applicable wage and hour laws. Though criminal prosecutions may be rare and directed toward the worst offenders, employers must have this issue on their radar.
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