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Attention Restaurateurs: Are your pay stubs compliant?

The NY Wage Theft Prevention Act (WTPA), which became effective on April 9, 2011, significantly increased the record keeping burdens on New York State employers. While the annual rate of pay notice forms received a lot of attention, one of the lesser known elements of the WTPA required employers to include additional information on employee pay stubs.


Specifically, the WTPA provided that all pay stubs must identify the:

  • Employee’s name
  • Employer’s name, address, and phone number
  • Dates covered by payment
  • Hours worked – (regular and overtime)
  • Rate or rates of pay (regular / overtime)
  • How the employee is paid: by the hour, week, commission, etc.
  • Employee’s gross and net wages
  • Itemized deductions
  • Itemized Allowances and credits claimed by the employer,
    if any (tip, meal and lodging allowances or credits)

Unfortunately, it did not take long for the plaintiffs’ bar to begin capitalizing on the technical requirements of the WTPA. Carolyn Richmond, co-chair of Fox Rothchild’s Hospitality Practice Group, states in her Hospitality Alert from October 2012 that she has seen a number of plaintiffs’ lawyers file claims against restaurants where one of their primary claims is that the pay stubs that the employer provided to employees neglected to identify the allowances (primarily the tip credit allowance) taken. In addition, these plaintiffs are arguing that the penalty for neglecting to identify the tip credit allowance on the pay stub is that the employer forfeits the right to take advantage of the tip credit for each employee, for each week in which the pay stub was deficient.

It goes without saying that penalties can be significant. Employers that do not issue compliant wage statements may have to pay damages of up to $100 per week, per employee! It behooves you to make sure your payroll provider is producing a pay stub that ensures that you are in compliance with the WTPA’s technical requirements.

Valiant Can Help You Comply With The Pay Stub Requirement

Most payroll companies are generic in nature. Valiant, has made the business decision to go against that trend and focus on a specific vertical market, the restaurant industry. As such, it puts us in the position of consultant and not just service provider. It allows us to address issues which only affect our industry. This is quite evident in dealing with the Wage Theft Protection Act in NY. As stated above, restaurants must include specific data on their employee’s paystub. Some information, like hours worked and rate of pay, would be easily tracked and reported on any provider’s pay stub. However, something like a tip credit, not so. The tip credit is unique to the restaurant industry. It is an allowance which can be legally deducted from minimum wage as long as an employee earns tips equal to or in excess of the amount of the credit. This tip credit is an item not tracked by a generic payroll system, but it is an intricate part of Valiant’s system and pay stub. Valiant’s pay stub has been reviewed and deemed WTPA compliant by leading labor attorneys and by the NYSDOL.

For more information on this topic please email Rick Casmass at Valiant or Click Here for a free assessment.


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