Payment of Wages: New York

Payment of Wages requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

  • The term wages is broadly defined in the New York wage payment law. See Definition of Wages.
  • Employers in New York State may pay wages to employees in cash, by check, by direct deposit or using payroll debit cards if certain requirements are met. Penalties are imposed for noncompliance. See Wage Payment Methods.
  • In New York State, the required frequency of wage payments and the amount of lag time allowed before payment after the end of a pay period varies by industry. Penalties are imposed for noncompliance. See Pay Frequency.
  • New York employers are permitted to make specific types of wage deductions. The law lists the conditions under which they may be made. Fines are imposed for violations. See Permitted and Prohibited Wage Deductions.
  • Employers must provide each employee with a pay statement with every payment of wages. Each pay statement must include certain information. Electronic pay statements are permitted subject to certain conditions. Penalties are imposed for noncompliance. See Pay Statement Requirements.
  • Employers must provide written notice of certain pay related information to all employees when they are hired, and when the information changes, under the New York Wage Theft Protection Act. See Employee Notification Requirements.
  • Employers must pay terminated employees their final wage payment within a certain time period. Whether an employer must pay for unused vacation time depends on the terms of the employer's vacation and/or resignation policy. Civil and criminal penalties may be imposed for noncompliance. See Termination Pay.
  • After the death of an employee, employers must follow a specific set of rules in order to properly turn over any compensation owed to the deceased employee's estate or survivors. See Deceased Employee Wages.
  • Unclaimed wages are considered abandoned property after three years. Organizations must review their records annually and transfer accounts that have reached specified dormancy thresholds to the Comptroller, who serves as custodian of the funds until the rightful owners claim them. Employers must file an annual report of unclaimed wages and provide notification to affected employees that wages will be reported to the state. Penalties are imposed for noncompliance. See Unclaimed Wages.
  • New York City has requirements pertaining to the payment of wages. See Local Requirements.

Definition of Wages

The New York wage payment law defines wages as the earnings of an employee for labor or services rendered, regardless of whether the amount of earnings is determined on a time, piece, commission or other basis, and includes benefits or wage supplements.

Benefits or wage supplements include, but are not limited to:

  • Reimbursement for expenses;
  • Health, welfare and retirement benefits; and
  • Vacation, separation or holiday pay.

+NY CLS Labor § 190(1), +NY CLS Labor § 198-c(2).

Wage Payment Methods

Cash or Check

A 1994 amendment to § 192 of the New York Labor Law superseded the New York State Department of Labor's (DOL's) 1977 guidelines for payment of wages by check. (L. 1994, ch. 170, § 205.) That amendment removed the requirement of § 192 that wages be paid in cash, thereby permitting employers to pay wages by check without application for approval from the DOL. However, while the 1994 amendment to § 192 relieved employers of the permit requirement, it did not remove the provisions of § 191 which requires the full and timely payment of wages.

To satisfy the obligations with regard to payment by check, employers must ensure that all the checks used in paying wages have sufficient funds to draw upon, and the check must be considered a negotiable instrument within the meaning of Article 3 of the federal Uniform Commercial Code. Moreover, the employer must ensure that the employee has the ability to access his or her wages without fees or cost to the employee, including a fee for replacement of a lost or stolen check. Such requirements operate to ensure that the payroll check serves as a cash equivalent for the payment of wages to the employee. If an employer fails to provide payroll checks that are easily negotiable by its employees, the employer may be in violation of these requirements.

+12 NYCRR § 192-1.1; +12 NYCRR § 192-2.1.

Direct Deposit and Paycards

Under New York State Department of Labor (DOL) regulations, when paying wages by direct deposit or payroll debit card (or paycard), an employer must ensure that it provides employees with a written notice that includes:

  • A plain language description of all of the employee's options for receiving wages (e.g., cash, check, direct deposit, paycard);
  • A statement that the employer may not require the employee to accept wages by by direct deposit or paycard;
  • A statement that the employee may not be charged any fees for services that are necessary for the employee to access their wages in full; and
  • If offering the option of receiving wage payments via paycard, a list of locations where the employee can access and withdraw wages at no charge within reasonable proximity to their place of residence or place of work.

An employer that offers one or more wage payment methods that require consent must obtain the consent in writing and must ensure that it:

  • Obtains the employee's informed consent without intimidation, coercion or fear of adverse action by the employer for refusal to accept payment of wages by direct deposit or paycard; and
  • Does not make payment of wages by direct deposit or paycard a condition of hire or of continued employment.

The written notice and written consent may be provided and obtained electronically so long as an employee is provided with the ability to view and print both the notice and the consent while at work and without cost, and the employee is notified by the employer through the electronic process of the right to print the materials.

An employer must provide the written notice and written consent in English and in the primary language of the employee when a template notice and consent in such language is available from the DOL. The New York DOL provides notice templates for employers on its website, but currently they are only in English.

+12 NYCRR § 192-1.3.

An employer (or its agent) is prohibited from engaging in unfair, deceptive or abusive practices in relation to the method(s) of wage payment. An employer (or its agent), or the officer or agent of any corporation is prohibited from discharging, penalizing or in any other manner discriminating against any employee because the employee has not consented to receive their wages through direct deposit or paycard. +12 NYCRR § 192-1.2; +12 NYCRR § 192-1.3.

Direct Deposit

Under New York State law, without the advance written consent of an employee, an employer is prohibited from directly paying or depositing the net wage or salary of the employee in a bank or other financial institution. This limitation does not apply to any person employed in an executive, administrative or professional capacity whose earnings are in excess of $900 a week, or to employees working on a farm not connected with a factory. +NY CLS Labor § 192.

Under DOL regulations (in addition to those discussed above), an employer must also ensure that it:

  • Has the employee's written consent;
  • Gives the employee a copy of their consent;
  • Keeps a copy of the employee's consent for the full period of the employee's employment and for six years following the employee's last wage payment by direct deposit; and
  • Makes the direct deposits via a financial institution chosen by the employee.

+12 NYCRR § 192-2.2.

Paycards

Under New York State law, employers are generally permitted to pay employees using payroll debit cards (or paycards), subject to the following requirements and limitations:

  • The employer must have the employee's advance written consent;
  • The wages must be deposited in a bank or other financial institution for the benefit of the employee;
  • Employees may not be charged a fee for withdrawals (but fees may be charged by the bank for any additional banking services that the employee elects to use), and they must be able to make an unlimited number of withdrawals without incurring bank or ATM fees (and the employer is not required to ensure free ATM transactions);
  • Employees must be able to obtain wages immediately (e.g., delays and encumbrances such as holds for clearance of funds deposited, scarcity of bank branches or other methods for withdrawing funds from debit cards, minimum balances and tolerance factors used with point of sale transactions (e.g., those commonly imposed with pay-at-the-pump transactions, hotel rooms and rental cars are prohibited);
  • Employees must be able to access the full amount of their wages (e.g., if the employee's wages are $143.32, the employee must be able to receive $143.32 in cash); To avoid a violation, the employer must take positive steps to ensure that the employee is able to access the wages, such as ensuring that bank branches where employees can obtain the full amount of their wages are in close proximity to the employee's workplace or home and may be quickly and conveniently accessed; and
  • Employees must be given full notice and disclosure of all terms and conditions related to the use of paycards.

DOL Opinion Letters: RO-08-0001, RO-08-0045, RO-09-0022, RO-09-0086 (October 29, 2009); RO-09-0158 (January 15, 2010); RO-10-0018 (October 6, 2010); RO-10-0179 (December 23, 2010).

The following provisions of New York State Department of Labor (DOL) regulations clarify and supplement the general law regarding wage payments made by paycards (in addition to those discussed above):

When paying wages by paycard, an employer must:

  • Obtain the employee's consent;
  • Provide the employee with the information required by +12 NYCRR § 192-1.3(a) ( as discussed above); and
  • Receive the employee's consent at least seven business days before taking any action to issue the wage payment by paycard.

An employer must not pay wages by paycard unless each of the followiing is provided:

  • Local access to one or more automated teller machines (ATMs) that offer withdrawals at no cost to the employee; and
  • At least one method to withdraw up to the total amount of wages for each pay period or balance remaining on the paycard without the employee incurring a fee.

If an employee is covered by a valid collective bargaining agreement that expressly provides the method or methods by which wages may be paid to employees, the employer must also have the approval of the union before paying by paycard.

Fees and Accounts

An employer (or its agent) may not charge, directly or indirectly, an employee a fee for any of the items listed below:

  • Application, initiation, loading, participation or other action necessary to receive wages or to hold the paycard;
  • Point of sale transactions;
  • Overdraft, shortage or low-balance status;
  • Account inactivity;
  • Maintenance;
  • Telephone or online customer service;
  • Accessing balance or other account information online, by Interactive Voice Response through any other automated system offered in conjunction with the paycard (i.e., by phone), or at any ATM in network made available to the employee;
  • Providing the employee with written statements, transaction histories or the paycard issuer's policies;
  • Replacing the paycard at reasonable intervals;
  • Closing an account or issuing payment of the remaining balance by check or other means;
  • Declined transactions at an ATM that does not provide free balance inquiries; or
  • Any fee not explicitly identified by type and by dollar amount in the contract between the employer and paycard issuer, or in the terms and conditions of the paycard that are provided to the employee.

An employer (or its agent) must not pay wages into a paycard account that is linked to any form of credit, including a loan against future pay or a cash advance on future pay. However, an issuer is not prohibited from covering an occasional inadvertent overdraft transaction if there is no charge to the employee.

An employer must not pass on any of its own costs associated with a paycard account to an employee, nor may an employer receive any kickback or other financial remuneration from the issuer, paycard sponsor or any third party for delivering wages by paycard.

An employer or its agent must not pay wages by paycard unless the agreement between the employer and issuer requires that the funds on a paycard do not expire. Notwithstanding this requirement, the agreement may provide that the account may be closed for inactivity provided that the issuer gives reasonable notice to the employee and that the remaining funds are refunded within seven days.

At least 30 days before any change in the terms and conditions of a paycard takes effect, an employer must provide written notice in plain language, in the employee's primary language or in a language the employee understands and in at least 12-point font, of any change to the terms or conditions of the paycard account including any changes in the itemized list of fees. If the issuer charges the employee any new or increased fee before 30 days after the date the employer has provided the employee with written notice of the change in accordance with these provisions, the employer must reimburse the employee for the amount of that fee.

+12 NYCRR § 192-2.3

Penalties

Employers that fail to pay employees' wages will be fined $500 for each failure. The fine will be recovered by the Commissioner of Labor either in an administrative or civil action.

In addition, for the first offense, an employer that fails to pay wages in the proper form is guilty of a misdemeanor, with fines ranging from $500 to $20,000 and/or imprisonment for up to one year. A second offense committed within six years is a felony, with fines ranging from $500 to $20,000, and/or imprisonment for up to one year and one day.

+NY CLS Labor § 197; +NY CLS Labor § 198-a.

Pay Frequency

Manual Workers

Wages must be paid weekly and no later than seven calendar days after the end of the week in which the wages were earned. Manual workers for nonprofit organizations must be paid according to their agreed employment terms but no less frequently than semimonthly. Large employers of manual workers may apply to the Commissioner of Labor to pay those workers at least semimonthly.

Railroad Workers

Wages of railroad workers must be paid on or before Thursday of each week and must include wages earned during the seven-day period ending on the Tuesday of the preceding week.

Commissioned Salespersons

Wages of commissioned salespersons must be paid according to the terms agreed to in the written commission agreement. However, they must be paid at least once a month, and no later than the last day of the month following the month in which the wages are earned. If the amount of wages is substantial, additional compensation earned, including extra, or incentive earnings, may be paid less frequently than monthly.

Exempt Executives, Administrators and Professionals

Employees who are exempt from the federal Fair Labor Standards Act, such as executives, administrators and professionals, who earn more than $900 a week may be paid less frequently than semimonthly, but an employer is permitted to pay these individuals more frequently.

Clerical and Other Nonexempt Workers

Wages of clerical and other nonexempt workers must be paid according to the terms of employment agreed on but not less frequently than semimonthly.

Fast Food Employees

New York City has wage payment requirements pertaining to fast food employees whose work schedules change. See Local Requirements.

Lag Time

New York State requires different lag times for the following types of workers:

  • Manual workers must be paid no later than seven calendar days after the end of the week in which the wages are earned.
  • Railroad workers must be paid wages earned during the seven-day period ending on Tuesday of the preceding week by the Thursday of each week.

+NY CLS Labor § 191.

New York City has requirements regarding lag time. See Local Requirements.

Penalties

Employers that fail to pay employees' wages with the correct frequency will be fined $500 for each failure, and the fine will be recovered by the Commissioner of Labor either in an administrative or civil action. +NY CLS Labor § 197.

Permitted and Prohibited Wage Deductions

New York State law lists the specific types of wage deductions that employers are permitted to make. Any deduction types that are not on the following list are prohibited.

  • Deductions that are explicitly required by law, a court or a government agency in accordance with any requirements set forth by that law, court, or agency.
  • Deductions for the following purposes, if they are for the benefit of the employee and if the employee authorizes the deduction(s) in writing:
    • Payments for insurance premiums;
    • Pension or health and welfare benefits;
    • Contributions to charitable organizations;
    • Payments for US Savings Bonds;
    • Payments for dues or assessments for any labor organization; and
    • Payments that are similar to the five purposes listed immediately above.

Employers may not deduct from employees' wages the for cost of the following things:

  • Tools, equipment or uniforms;
  • Recovery of unauthorized expenses;
  • Breakage or spoilage of materials, or cash shortages and fines due to the employee's misconduct;
  • Fines or penalties for lateness, taking excessive leave, misconduct or quitting without notice;
  • Contributions to political action committees, campaigns and similar payments; and
  • Fees, interest or the employer's administrative costs.

In addition, deductions may not be made indirectly, for example, by requiring a worker to pay for shortages with a separate transaction. The total amount of all deductions that are "similar to" the first five items listed above cannot exceed 10% of the employee's gross wages.

+NY CLS Labor § 193.

Final Regulations

As noted above, the law permits certain deductions from wages that are authorized by, and for the benefit of, the employee. Those deductions are limited to the ones that are specifically listed in the law and to similar payments. Final regulations define these terms and include provisions for deductions for overpayments of wages and repayments of advances.

Authorized by the Employee

The final regulations clarify that an employee's authorization will be assumed if the deduction is agreed to in a collective bargaining agreement or in an agreement between the employer and the employee that is:

  • Express;
  • Written;
  • Voluntary; and
  • Informed.

An employee's authorization will be considered informed if the employee has been given advance written notice of all terms and conditions of the deduction, the benefits of the deduction, and the details about how the deductions will be made. The employer also must inform the employee of any change in the amount of a deduction, or of a substantial change in the benefits of the deduction (e.g., a reduction in the benefit received for the deduction). The regulations provide additional details regarding each of these elements.

For the Benefit of the Employee

Under the final regulations, deductions are for the benefit of the employee if they provide financial or other support for the employee, his or her family or a charitable organization. Support is limited to the following seven categories of benefits:

  • Health and welfare;
  • Pensions and retirement;
  • Child care and education;
  • Charity;
  • Dues and assessments;
  • Transportation; and
  • Food and lodging.

In addition, while each wage deduction may provide some level of convenience to employees in facilitating payments, convenience itself is not a recognized benefit for purposes of determining whether any given deduction is for an employee's benefit. On the other hand, while every deduction may provide some general indirect benefit to employers by helping to attract and maintain a stable and productive workforce, deductions that result in financial gain to the employer at the expense of the employee call into question whether the deduction provides a benefit to the employee. However, the regulations do not preclude an employer from making deductions in all cases where the employer derives a benefit.

Listed and Similar Payments

Payments that are for an employee's benefit and not otherwise prohibited will be considered similar and allowed if they fall into one of the seven benefit categories listed in the final regulations. The regulations provide non-exclusive examples within each of the seven benefit categories. They also provide a non-exclusive list of deductions that are not considered similar to those listed in the labor law and the seven categories.

Deductions for Overpayments

The regulations permit an employer to make deductions from an employee's wages for overpayments due to a mathematical or other clerical error of the employer, if the following conditions are met:

  • The employer must notify the employee of its intent to make deductions either three days or three weeks in advance, depending on the amount;
  • The employer must provide the notice within eight weeks after the overpayment occurs, and the wage deductions to recover the overpayment may be made over a maximum period of six years from the original overpayment;
  • Only one deduction is allowed per pay period per employee;
  • If an overpayment is less than or equal to the employee's net wages earned in the next pay period, the employer may deduct the entire amount from the next wage payment;
  • If an overpayment exceeds the employee's net wages earned in the next pay period, the employer must not deduct from that wage payment more than 12.5% of gross wages earned, and the deduction must not reduce the employee's effective hourly wage rate below the state minimum wage; and
  • Employers must adopt procedures for employees to dispute the overpayment and the terms and/or timing of the recovery.

Deductions for Repayments of Advances

The regulations also permit employers to make deductions for repayment of advances, salary or wages. An advance occurs when an employer provides money to an employee in anticipation of future wages. An employer that wishes to make deductions to recover an advance must adhere to the following rules:

  • Before giving the advance, the employer and employee must agree in writing to the timing and duration of the repayment deductions. Total repayment through one deduction from the employee's last wage payment upon his or her termination of employment is allowed;
  • An employer may only make one advance or deduction for an advance at a time. Prior existing advances must have been repaid in full;
  • For each employee, an employer is not permitted to make more than one deduction per pay period to recover an advance; and
  • Employers must adopt procedures for employees to dispute the amount and frequency of deductions and give prior written notice of the procedure to employees who receive an advance.

Under New York's Wage Theft Prevention Act (WTPA), an employer is required to obtain written authorization to make payroll deductions for wage advances. An employer may use the DOL's model form for this purpose, or create its own form as long as it includes all the information required by the WTPA.

Deductions Permitted Through November 6, 2020

New York employers are also permitted to make pay deductions for the following additional items or reasons through November 6, 2020, under amendments to the law (the amendments expired on November 6, 2018, but they were extended for an additional two years by the governor shortly thereafter on December 7, 2018):

  • Discounted parking or discounted passes, tokens, fare cards, vouchers or other items that entitle the employee to use mass transit;
  • Fitness center, health club and/or gym membership dues;
  • Cafeteria and vending machine purchases made at the employer's place of business;
  • Purchases at employer-operated gift shops, where the employer is a hospital, college or university;
  • Pharmacy purchases made at the employer's place of business;
  • School tuition, room, board and fees from preschool through post-graduate level;
  • Payments for housing provided at or below market rates by nonprofit hospitals or their affiliates; and
  • Purchases made at events sponsored by a bona fide charitable organization affiliated with the employer where at least 20% of the profits from such event are being contributed to a bona fide charitable organization.
  • To recover salary advancements and/or overpayments due to mathematical or clerical errors.

+NY CLS Labor § 193; Ch. 386, Oct. 26, 2015; AB 10615.

Penalties

Employers that make improper deductions and in effect fail to pay employees' wages will be fined $500 for each failure. The fine will be recovered by the Commissioner of Labor either in an administrative or civil action.

In addition, for a first offense, an employer that violates the pay deduction law is guilty of a misdemeanor punishable by fines ranging from $500 to $20,000 and/or imprisonment for up to one year.

For a second offense within six years, an employer is guilty of a felony with fines ranging from $500 to $20,000 and/or imprisonment for up to one year and one day.

+NY CLS Labor § 197.

Pay Statement Requirements

Employers must provide each employee with a pay statement with every payment of wages that lists the following items:

  • The dates of work covered by that payment of wages;
  • Name of employee;
  • Name of employer;
  • Employer's address and phone number;
  • Rate(s) of pay and basis thereof (e.g., hourly, shift, daily, weekly, salary, piece, commission;
  • Gross wages;
  • Deductions;
  • Allowances, if any, claimed as part of the minimum wage; and
  • Net wages.

For all employees who are not exempt from overtime compensation the pay statement must include:

  • The regular hourly rate(s) of pay;
  • The overtime rate(s) of pay;
  • The number of regular hours worked; and
  • The number of overtime hours worked.

For all employees paid a piece rate, the pay statement must include the applicable piece rate(s) of pay and the number of pieces completed at each piece rate. Upon the request of an employee, an employer must provide a written explanation of how the wages were computed. +NY CLS Labor § 195(3).

Employers, upon written request, must provide a commission salesperson a statement of earnings paid or due and unpaid. +NY CLS Labor § 191(c).

New York City has pay statement requirements pertaining to paid sick leave and certain fast food employees. See Local Requirements.

Electronic Pay Statements

Employers can give employees the option of choosing to receive pay statements either in paper form, or electronically accessible by computer or kiosk. The computers or kiosks from which the employees access and view the statements must be capable of printing the statements so employees can retain hard copies.

In addition, employees that choose to receive electronic pay statements must be able to view and print the statements without undue delay, effort or cost and on company time. An employer must provide a computer on company premises to view and/or print statements if an employee does not have access to a computer.

+NY CLS Labor § 195; DOL Opinion Letter, RO-10-0072 (July 13, 2010); DOL Opinion Letter, RO-10-0018 (October 6, 2010).

Penalties

Employers that issue incorrect pay statements, or issue them in an incorrect manner, may be charged $250 per violation by the DOL until the situation is corrected. +NY CLS Labor § 195.

Employee Notification Requirements

New York Wage Theft Prevention Act

New York's Wage Theft Prevention Act (WTPA) requires employers to provide written notice to new employees, no later than 10 days after the date of hire, including the:

  • Employee's pay rate(s), including overtime rate if applicable;
  • Employee's pay basis/frequency (e.g., hourly or by shift, day, week, piece, commission, etc.);
  • Employee's regular payday;
  • Employer's intent to claim allowances (e.g., tip or meal allowances) as part of the minimum wage;
  • Employer's business name(s);
  • Employer's main physical office address and mailing address, if different, and telephone number; and
  • Any other information requested by the Commissioner of Labor.

Notices under the WTPA must also be provided at least seven calendar days before a change in the information included on the notice, if the change is not listed on the employee's pay stub for the next pay period.

Employers are required to provide the notice both in English and in the employee's primary language (as identified by the employee) through translated notices provided by the DOL. If a notice is not available in the language identified by the employee, the employer must provide it in English.

The New York State DOL provides a series of sample notices that an employer may use depending on an employee's basis of pay, or industry for hospitality industry employees:

The WTPA also requires an employer to obtain written authorization to make payroll deductions for repayment of wage advances provided to an employee. An employer may use the DOL's model form, or create its own form that includes all the information required by the WTPA.

Once an employers provides an employee with any of these notices, the employer must have the employee sign a statement acknowledging receipt of the written notice in English and the employee's primary language. If an employee refuses to sign the notice, the employer should still give the notice to the employee and note the employee's refusal. Employers must keep written acknowledgments received from employees on file for six years.

Electronic Notices

Notices may be provided electronically if the employer has a system in place allowing employees to acknowledge receipt, and print copies, of the notices.

Penalties

Employers that fail to comply with the WTPA are subject to a penalty of $50 per day for each violation, up to $5,000.

Penalties from $1,000 to $20,000 may be imposed if an employer has previously violated the law in the past six years. For repeat, willful or eggregious violations, an employer may also be required to disclose certain wage data to the labor commissioner for posting on the state DOL website.

+NY CLS Labor § 195.

Termination Pay

Employers may pay terminated employees their remaining wages at time of termination or some other time before the payday on which the wages would have been due. However, they must be paid no later than the payday on which their next wage payment would have been due if they had not been terminated. Moreover, if the employee requests it, employers are required to mail the wages to the employees. +NY CLS Labor § 191.

Accrued Time

Whether an employer must pay for unused vacation time depends on the terms of the employer's vacation and/or resignation policy. New York courts have held that an agreement to give benefits or wage supplements, like vacation, can specify that employees lose accrued benefits under certain conditions. The loss of benefits is only valid, however, if the employer has advised employees in writing of the conditions that nullify the benefit. Glenville Gage Company Inc. v. Industrial Board of Appeals of the State of New York, Department of Labor, +70 AD2d 283 (3d Dept 1979), aff'd, +52 NY2d 777 (1980).

Effective September 30, 2020, under New York's sick and safe leave law, an employer is not required to pay an employee for unused accrued sick leave upon the employee's termination, resignation, retirement or other separation from employment.

New York City has requirements regarding payment of accrued time on termination of employment. See Local Requirements.

Penalties

An employer that fails to pay final wages may be liable for a $500 civil fine for each violation.

Criminal penalties may also apply. For the first offense, an employer may be guilty of a misdemeanor with fines ranging from $500 to $20,000 and/or imprisonment for up to one year; for a second offense within six years, the employer may be guilty of a felony, with fines ranging from $500 to $20,000 and/or imprisonment for up to one year and one day.

Deceased Employee Wages

Employers in New York State may pay up to $30,000 of the wages owed to a deceased employee, including bonuses, pensions, retirement or death benefits and profit-sharing payments. The wages may be paid to the employee's surviving spouse, unless another beneficiary has been designated, once the surviving spouse produces an affidavit showing that the payments owed total no more than $30,000.

Not less than 30 days after the date of the employee's death, the employer may pay up to $15,000 in wages owed to the following relatives of the deceased, or other listed individuals, (in the following order):

  • Surviving spouse;
  • Adult children;
  • Parent;
  • Sibling;
  • Niece or nephew; or
  • A creditor who has incurred the funeral expenses (if requested by the surviving spouse or one of the listed relatives).

The employer may not make this payment of up to $15,000 in wages until the surviving spouse (or relative to whom or at whose request the payment is made) produces an affidavit showing:

  • The deceased's date of death;
  • The deceased's relationship to the employee;
  • That an executor or administrator has not been appointed;
  • The names and addresses of payees; and
  • That the payment does not exceed $15,000.

Not less than six months after the date of death, the employer may pay up to $5,000 in wages after the surviving spouse produces a similar affidavit.

+NY CLS SCPA § 1310.

Unclaimed Wages

Organizations holding unclaimed property must provide a report to the New York State Comptroller's Office of Unclaimed Funds. Among the many organizations required to report are banks, insurance companies, corporations and courts.

Unclaimed wages are considered abandoned property after three years. Organizations must review their records annually and transfer accounts that have reached specified dormancy thresholds to the Comptroller, who serves as custodian of the funds until the rightful owners claim them.

The reporting year runs from January 1 through December 31. The report is due March 10 either on paper form AC 2686 or electronically. Remittance of the unclaimed wages can be made by check or via ACH transfer.

The legal concept of due diligence also requires employers to notify any employee affected that the wages will be reported to the state. Employer must adhere to the following procedure:

  • The employer must send a first class mailing to each employee whose name is expected to appear on the report at least 90 days prior to the final report/remittance date, unless:
    • The employee's address is unknown; or
    • The employer can demonstrate that the address it maintains for the employee is not the employee's current address; and
  • The employer must send a certified mailing, return receipt requested, to each employee whose name is expected to appear on that report if the abandoned wages exceed $1,000. This mailing must be sent at least 60 days prior to the final report/remittance date, unless:
    • A claim has been initiated since the first class mailing was sent; or
    • The first class mailing was returned as undeliverable.

+NY CLS Aban Prop § 1422.

The costs associated with completing a due diligence certified mailing may be charged individually to the abandoned accounts involved in the due diligence effort. The costs for completing the first class mailing requirements cannot be offset. Employers also may not take a bulk deduction against the report's total value. +NY CLS Aban Prop § 1315.

Penalties

Employers that fail to file full and complete reports or affidavits as required are subject to a penalty of $100 for each day the report or affidavit is willfully delayed or withheld. In addition, if an employer is late in paying over or delivering abandoned property, interest will accrue at the rate of 10 percent per year from the date the payment or delivery was due until the date the payment or delivery is made. +NY CLS Aban Prop § 1412.

Unclaimed Property Relating to General Corporations (Including Nonprofit, Mutual Funds, and State, Municipal, or other Public Stock/bond Issuers); New York State Office of the Comptroller Handbook for Reporters of Unclaimed Funds; NYCD Diskette Installation and User Manual, Office of Unclaimed Funds.

Local Requirements

New York City Paid Sick Leave

The New York City Earned Safe and Sick Time Act (ESSTA) was amended, effective September 30, 2020, to align with the statewide paid sick leave law. Int. No. 20-32.

The New York City Department of Consumer and Worker Protection (DCWP) released rules implementing the ESSTA and other resources for employers, including FAQs. The FAQs were updated to account for the amendments effective September 30, 2020. However, the rules have not yet been updated to account for the amendments effective September 30, 2020. FAQs do not have the force of law, but they do provide employers with information on how the enforcement agency may interpret the law.

Lag Time

Under the ESSTA, covered employers must pay earned safe and sick time to covered employees no later than on the payday for the next regular payroll period beginning after the time was used by the employee. If the employer has asked for written documentation verifying the use of leave, it does not have to pay until the employee complies. The ESSTA prohibits an employer from paying employees for time as it accrues, even if the employee agrees to it.

+6 RCNY 7-209; FAQ IV.154.

Permitted and Prohibited Wage Deductions

An employer may not deduct money from an employee's wages to cover the cost of paid safe and sick leave. FAQ V.14.

Pay Statement Requirements

Employees' pay statements, or some other separate writing provided to employees each pay period, must include the amount of safe and sick time they have accrued and used during the pay period and their total balance of accrued safe and sick leave. Employers are subject to a civil penalty of up to $50 per employee who is not notified as required. However, the DCWP announced that employers that could not meet the documentation requirement by September 30, 2020, but are working in good faith to implement it, have until January 1, 2021, to ensure compliance without incurring a penalty. +NYC Administrative Code 20-919; +6 RCNY 7-107.

Accrued Time

The ESSTA does not require an employer to pay an employee for accrued, unused safe and sick time upon separation of employment (e.g., retirement, resignation, termination). However, if an employer chooses not to pay out such time upon an employee's separation, it should make this clear in its safe and sick leave policy. +NYC Administrative Code 20-913.

For further information about these and other aspects of the ESSTA, see Paid Sick Leave: New York.

New York City Fast Food Employees' Schedule Change Premiums

Wage Payments and Pay Statements

The New York City Fair Work Practices Ordinances require New York City employers to pay schedule-change premiums to fast food employees at the same time the employer pays such employees wages owed for work performed during that work week. Any schedule change premiums paid must be separately noted on a pay statement, (including the dates and amounts paid) or other form of written documentation and provided to the employees for that pay period. +NYC Administrative Code 20-1222(b).

For additional information regarding these and several other important requirements under the New York City Fair Work Practices Ordinances, see Involuntary and Voluntary Pay Deductions: New York, and Shiftwork and Scheduling: New York.

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.

Additional Resources

New York Fringe Benefits Notice Poster

New York City Fast Food Fair Workweek Notice Poster

New York City Retail Fair Workweek Notice Poster