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President CATHERWOOD. Thank you, Mr. Reierson.
In New York, wage claims constitute an important part of the work of our Division of Labor Standards, of which Dan Daly is the assistant director. A very large part of this work is concentrated in the New York metropolitan area. A large part of it is concerned with employers that are small, ill financed, uncertain in their economic and financial status. We have an amazing number of telephone calls and visitations in connection with wage claims.
I am going to ask Dan Daly to cover very briefly, not everything that we do or all of the legislation, but in the same manner that Minister Reierson from Canada did to the problem and approach.
DAN DALY, New York Department of Labor We have had a wage payment-wage collection law for many, many years. We look at this law in a very serious vein for two reasons. One, if any one of us were not getting our paycheck for the full amount, we would be upset about it. We look at other individuals in industry in the same light. We consider the wage payment law almost as seriously as we do the minimum wage law. If a person is entitled to be paid his wages, our law does require that he be paid, if he is a manual worker, weekly or within 7 days subsequent to the date that the wages are earned. We do have some problems in connection with it. We, more or less, combine our activities in the enforcement of the wage claim law with our minimum wage inspection work. During the time we are making that inspection, we also inquire as to whether they are being paid in accord with the agreed terms of employment. So it is a very important phase of our work.
We do go out and investigate the wage claims that come into us. I might say that we collected about $465,000 in 1965, covering approximately 6,000 workers. We give an employer every opportunity to comply with these provisions. First, we might send out a letter. Second, we make a physical inspection. Third, if we do not collect a check at that time, we will call this employer into a hearing. If we do not get the money at the hearing, then we go on, if we have sufficient evidence, to a criminal action. Last year we instituted about 270 criminal actions. Now, those are not always fruitful. There are many times when we do not know who committed the crime—the investigator making the investigation or the fellow who does not pay the wages. But basically, we have very good results from our efforts.
With that, I will add one other thing. We have had an amendment to our wage-payment law which now gives us quite broad coverage. Almost every employer is required to keep records. He is required to give notice to the employee as to what his agreed wage will be and what the payday will be. So this is going to be helpful to them. Before he can make a change in these wage payment days, he must give the employee prior notice.
DISCUSSION President CATHERWOOD. Are there any questions or observations ?
Commissioner DUVALL. Dan, where it is indicated that bankruptcy has been filed, do you have any followup procedure beyond that point?
Mr. Daly. We look at the person who is filing the petition of bankruptcy first. We want to find out whether there was any intent in the beginning of this particular claim that the employer who filed the action had drained the reserves of the corporation. We will follow it up. In some instances, we will go on with the criminal action. Just because he files a petition for bankruptcy does not relieve him of the obligation of complying with our law. We can still go through with a criminal action. However, we usually will give the complainant a form to file as a preferred claim with the referee in bankruptcy. But if we find some deliberate intent to avoid paying the wage by filing this bankruptcy, we will pursue it with criminal action, if necessary.
Mr. BORTZ. Mr. Chairman, since there is such a spirited and harmonious relationship between New York and New Jersey, and since there are quite a number of workers and employers that cross the Hudson tubes and otherwise move from New York to New Jersey, do you have any problems in wage collection for New York workers working in New Jersey—a situation of that sort ?
Mr. Daly. Well, I would say it is about the same number of problems that New Jersey may have with New York. [Laughter.] I would say that if you were to go to the other end of the country, say California, that California asks us to assist in wage collections. But we will try to help the person get his wages. We cannot go any further with it. Because if the wage is earned in the State of New Jersey, we cannot institute any kind of an action. But we do try to help the person.
President CATHERWOOD. Increasingly, however, we have had from a number of different States occasional letters. Efforts have been made to be helpful. It is true in this field, as in many other fields, that a large proportion of your cases yield to treatment without having to get to the stage of prosecution, and, amazingly, for a number of different reasons. But I wonder who can speak for New Jersey here in terms of what Nelson Bortz said ?
Director CLARK. I receive three or four letters from New York a month. We refer three or four to New York a month. We take the position in New Jersey that if a New York resident was working in New Jersey, we would take that claim and call up that employer. If our complaint involves another State, we have a fair measure of success. We take the position that if the work took place in New Jersey we handle the complaint. There is quite a bit of cooperation between the two States. It amounts to about three or four letters a month. I find in wage collection work that we use our statute maybe two or three times out of every 10 complaints. The major part of wage collection work is done by calling up the employer and letting him know what the problem is. In that way, we are able to solve most of our problems. Very seldom do we have to resort to the statute.
President CATHERWOOD. Nelson, do you have anything further?
Mr. Bortz. Mr. Chairman, I gather that this is strictly an informal interstate accommodation.
President CATHERWOOD. It is completely informal, as far as New Jersey is concerned. If there is any problem that requires or would be helped by a larger degree of formalization, it has not come to my attention.
Director ROUMELL. I want to direct myself to the statement that Mr. Welsh made. It is important to take into account your larger employers in passing a bill of this kind. Would you elaborate on that a little bit, please? I do not quite get the gist of your statement in that you are not going to pass a law to accommodate Bethlehem Steel. You must have some logic.
Deputy Commissioner WELSH. I believe that you are from Kentucky.
Director ROUMELL. No; Michigan.
Deputy Commissioner WELSH. Dealing with a general assembly of a State is a very remarkable thing. It is something that most of the gentlemen here appreciate; certainly, Mr. Boggs does. You have to play it by ear. I had no idea that Bethlehem Steel would be opposed to Mr. Boggs' wage payment collection law, which we put in the general assembly verbatim. All of a sudden I received some calls from Bethlehem, Pa.
Director ROUMELL. What was your provision in the law? Perhaps this will approach the problem. What was the provision that they opposed ?
Deputy Commissioner WELSH. Every 2 weeks or twice a month; they have some people there that they pay once a month.
President CATHERWOOD. Was this salary levels or at hourly rated levels?
Deputy Commissioner WELSH. Mr. Boggs could explain his law to you much better.
Commissioner Boggs. Our law requires that hourly paid employees be paid at least every 2 weeks, and salaried employees be paid at least once a month. We do not care when you pay them once a month, but it has to be at least that. We do exclude executive personnel from our provisions because we are getting into this father-son business, and holding half interest, and vice presidents of these large companies, and we would waste our time fooling with that.
We were interested in the low paid employees. There is a penalty that carries a jail sentence for failure to pay. We have had very few court cases. We have had cooperation from the State of New York to the tune of a little over $2,000. We asked them to get in contact with one of their contractors. They contacted him and he paid it. We have contacted many other people for Virginia contractors who have refused to pay. We have collected the money for some of them and some we have not. There is nothing legally we can do about it if they refuse to pay but we do put the heat on.
President CATHERWOOD. On the question that Mr. Roumell raises, were you aware of Bethlehem's opposition to the legislation at the time that you had it?
Mr. Boggs. I have no opposition; no, sir. I have none whatsoever on wage collections, and I have no limitations on wage collections.
Deputy Commissioner WELSH. That does it.
Deputy Commissioner LEFKOWITZ. We recently expanded the coverage of our wage payment law in New York City to extend it to nonprofit-making institutions and household employers and to extend it in the dollar cutoff. Up until this year, it had $100 a week earnings on which we had a weekly payroll. We thought we would go up to $200 a week for a weekly payroll. Beyond that, the law does apply but applies for a payroll which you have to pay according to the terms of employment, rather than going to any statutory specific terms. We thought of going up to as high as $10,000 a year, $200 a week, for semimonthly payments.
At this point, a number of the employers, not immediately but belatedly, registered some objections, among them were Bethlehem Steel, General Electric, and a few other firms. They indicated that they thought they had a number of employees in the semiadministrative categories that they were paying on a monthly payroll. They
felt it would create inconveniences for them to shift from a monthly payroll to a semimonthly payroll on these. But in any event, we did compromise with them and mandated the semimonthly payment at $7,500 a year annual salary. Beyond that we do apply our wage payment law, but this is a requirement that they pay the agreed terms of employment.
We do not impose specific times. I think it may be a question, really, of recordkeeping inconveniences and shifting of bookkeeping rather than inherent opposition to a wage payment law that motivated Bethlehem in your case. At least, that is what motivated some of the employer organizations in New York.
President CATHERWOOD. Thank you, Jerry Lefkowitz.
Commissioner CRANE. I would like a clarification from Dan. Did I understand you to say that your law required the worker be paid within 7 days of work performed ?
Mr. DALY. Manual worker.
Mr. DALY. Yes. He must be paid weekly or within 7 days subsequent to the work in which the wage was earned.
Commissioner CRANE. It can be held back a week!
Commissioner CRANE. That is what confused me. Most of our employers hold back a week, you see, so they can work up the payroll and everything.
Mr. DALY. Right.
What Deputy Commissioner Lefkowitz was talking about, I do not quite follow it all the way through. I think he was referring to executive, administrative, and professional employees, obviously, when he was talking about this $200 maximum—$400 under the old law. But there is a question coming up for many large corporations who are going into the computer system of payroll.
CONFEREE. We have centralized payroll. We have one that makes up payroll in California and I don't know how many in New York.
Mr. Daly. The problems in that regard are from big corporations who now want to do it twice a month rather than every other week. That is correct.
President CATHERWOOD. The gentleman in the first row.
CONFEREE. I would like to congratulate Mr. Welsh on getting his wage payment law through. We in the District of Columbia collect wages for employees who have worked in Maryland but who were hired in the District. This last fiscal year, we collected about