Wage Theft Laws in NY | TBM Payroll Compliance

Wage theft is growing in New York, costing employees millions yearly and putting businesses at serious legal and financial risk. For employers, the stakes are high—not just in potential penalties but also in the damage it can do to their reputation. Whether committed accidentally or intentionally, wage theft can disrupt operations, hurt employee morale, and put compliance at risk.  

This guide is here to help New York employers navigate wage theft laws, understand the Wage Theft Prevention Act, and see how working with a Professional Employer Organization (PEO) like TBM can protect your business. We'll cover the basics, key compliance requirements, and practical steps to help you stay on the right track. 

What Is Wage Theft? 

Wage theft is the illegal withholding of wages or failing to pay employees the full amount they are owed for their work. Common examples include: 

• Unpaid overtime  
• Illegal deductions  
• Failing to pay minimum wage  
• Requiring off-the-clock work  
• Withholding final paychecks  

Wage Theft in Numbers 

U.S. workers lose an estimated $60 billion every year to wage theft. New York is one of the biggest hotspots for this issue, with industries like hospitality, construction, and retail being hit the hardest. Understanding wage theft laws isn’t just about compliance—it's about building a fairer, more trustworthy workplace. 

The Wage Theft Prevention Act (WTPA) 

New York's Wage Theft Prevention Act (WTPA), in effect since 2011, directly addresses wage theft by providing robust protections for workers. The law also enforces strict compliance requirements for employers, promoting fair labor practices across the state. 

Key Highlights of the WTPA 

Wage Notices:  

• Employers must provide a written notice of wage details when hiring or if anything changes.  
• This notice should include pay rates, payday schedules, and any allowances or deductions.  
• It must also be in the employee’s primary language (if the Department of Labor has translations available).  

Pay Statements: 

• Employees must get detailed pay stubs with every paycheck.  
• These stubs should show hours worked, pay rates, gross/net wages, and deductions. 

Recordkeeping: 

• Employers need to keep payroll records for at least six years.  
• Keeping accurate records helps avoid disputes and legal trouble. 

What Happens If You Violate the WTPA? 

Not following the WTPA can get expensive:  

• Employers can be fined up to $5,000 per employee for not providing wage notices.  
• Another $5,000 per employee applies for missing or incorrect pay stubs.  
• Repeat violations could even result in criminal charges. 

By staying compliant, employers not only dodge penalties but also build trust, improve transparency, and boost employee morale—helping reduce turnover in the long run. 

The Fair Labor Standards Act and Wage Theft 

The Fair Labor Standards Act (FLSA) is a federal law that sets the rules for:  

• Overtime pay  
• Minimum wage  
• Recordkeeping  

It works alongside New York’s wage theft laws, though the FLSA often has broader requirements.  

What Happens If You Violate the FLSA?  

Breaking either state or federal labor laws can lead to more than just fines. You could face:  

• Lawsuits from employees  
• Costly class-action cases  
• Damage to your reputation, making it harder to hire and keep good talent  

Staying compliant with the FLSA and WTPA is essential for New York employers. Their overlap can get tricky, so putting compliance first is key. 

How a PEO Can Help Ensure Payroll Compliance 

Navigating wage theft laws can be overwhelming, particularly for small and mid-sized businesses. This is where a Professional Employer Organization (PEO) like TBM can transform your payroll management. 

What Is a PEO? 

A PEO provides businesses with outsourced HR support and payroll services. When you partner with a PEO, they take on administrative tasks, including: 

• Processing payroll accurately 
• Ensuring labor law compliance 
• Managing records and reporting requirements  

Benefits of Using a PEO for Payroll Compliance 

• Streamlined Payroll: With a PEO, you no longer need to worry about complex wage notices, pay stub accuracy, or misclassification issues. 
• Risk Mitigation: Errors in payroll or recordkeeping can cost businesses thousands. A PEO like TBM minimizes this risk with airtight processes. 
• Efficiency: Free up internal resources by allowing payroll to be professionally managed, giving you more time to focus on growth and strategy. 

Why Choose TBM for Compliance Solutions? 

With over 30 years of experience in payroll and HR compliance, TBM helps businesses nationwide. Operating in one of the most heavily regulated states, we’ve built our reputation by tackling some of the strictest labor laws. Here’s why businesses across the nation trust us: 

• NY Compliance Expertise, Nationwide Impact: TBM’s proven ability to navigate New York's strict compliance laws ensures your business meets federal and state standards—wherever you operate. 
• Dedicated Support: Every client gets a dedicated account manager who knows your business inside and out. 
• Proactive Solutions: We go beyond compliance to help you optimize payroll, reduce overhead costs, and improve efficiencies. 
• Proven Track Record: TBM has consistently helped businesses avoid costly penalties and protect their bottom line. 

Protect Your Business from Wage Theft Today 

Staying compliant with New York's wage theft laws doesn’t have to be difficult. By getting familiar with the Wage Theft Prevention Act, following FLSA rules, and teaming up with a PEO like TBM, you can protect your business from penalties while building a workplace based on trust and fairness. 

Take the next step today and discover how Total Benefits Management (TBM) can protect your business.