New state bills on wage theft, overdraft fees signed into law

ALBANY, N.Y. — During his final days in office, then-Gov. Andrew Cuomo signed bills focused on wage theft and requiring banks to take several actions that prevent overdraft fees. 

Details on both bill signings were announced Aug. 19.

Wage theft

One of the measures that Cuomo signed relates to strengthening laws prohibiting wage theft. It also closes a loophole created by litigation, clarifying that liability for failure to pay wages has “no exceptions.”  

The “No Wage Theft Loophole Act” serves to amend sections New York’s Labor Law to clarify that wage theft remains illegal with no exception, furthering the intent of the statute to protect the wages of workers. 

Previously, language throughout the statute was “narrowly interpreted” by courts, depriving workers of the wages they’ve rightfully earned, the former governor contended. The legislation closes that loophole and strengthens the rights of workers to be paid all they are owed.

Overdraft fees

Cuomo also signed legislation requiring banks to take several actions that prevent overdraft fees. 

The legislation requires banking institutions that maintain checking accounts to pay checks in the order they are received. If a bank receives a check for a greater amount of money than the balance in the account, it may decline to pay the check. 

However, the banking institution must honor any smaller checks that can be paid with the existing account balance. 

Under current law, if a banking institution receives a check for a larger amount of money than the funds in the account, it will not only dishonor that check, but all subsequent checks, even if there are sufficient funds in the account to pay them. 

This measure requires banks to honor subsequent checks if they can be paid using funds in the account.