People v. Vetri

Cohn, J.

Pursuant to leave granted by a Justice of the Appellate Division, Second Department, the defendant appeals from an order and judgment of that court affirming a judgment of a Court of Special Sessions held by a City Magistrate, Borough of Brooklyn, convicting him of a violation of section 1272 of the Penal Law in that he failed to pay the wages of his employees in accordance with the provisions of subdivision 2 of section 196 of the Labor Law.

On September 24, 1952, defendant entered into a two-year collective bargaining contract with Truck Drivers Local Union No. 807, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Among other things the contract provided for vacations, the length of which was dependent upon the number of days worked during the 12-month period ending on March 31st of each year. For the first 120 workdays, one day of vacation was allowed for each 30 days. Thereafter vacation days accrued on the basis of 15 or 20 additional workdays until a maximum of a 14-day vacation period was reached. The agreement required the employer to post the vacation schedule not later than May 1st.

While the agreement was in effect, defendant discontinued business. He made all payments required under the agreement save for the accrued vacations of six of his employees ranging from four to fourteen days. Upon complaint of these employees who were members of the union, defendant was convicted on an information charging him with a violation of subdivision 2 of section 196 of the Labor Law in that on March 31, 1954, he failed to pay the wages due the complainants who were employed by him “ for various periods during the past year ”.

So far as here pertinent, subdivision 2 of section 196 of the Labor Law provides: “ Every person carrying on a business by lease or otherwise * * * shall pay weekly to each employee the wages earned to a day not more than six days prior to the date of such payment.”

The relevant portion of section 1272 of the Penal Law provides : ‘1 Each person * * * who does not pay the wages of all his * * * employees in accordance with the provisions of the labor law is * * * guilty of a misdemeanor, and upon conviction therefor, shall be fined not less than one hundred nor more than ten thousand dollars or imprisoned for *405not more than one year, or punished by both such fine and imprisonment for each such offense.”

The sole question presented by the appeal is whether vacation pay constitutes wages within the meaning of the above-quoted sections of the Labor Law and the Penal Law. The trial court held that since vacation pay represented part of the employee’s compensation for services rendered, it fell within the purview of the statutes under consideration.

The requirement that an employer pay his employees their wages weekly was first imposed in 1890 (L. 1890, ch. 388, § 1). After several amendments it was carried over as section 10 of the Labor Law (L. 1897, ch. 415), from which the present section 196 was derived. The purpose of the law was to assure prompt payment of daily wages to those employed in a subordinate capacity and who depended upon their earnings for support on a per diem rather than on a salary basis. (Erie R. R. Co. v. Williams, 233 U. S. 685, 704.) It was not intended to include the so-called fringe benefits found in present-day collective bargaining contracts, which were relatively foreign to per diem hirings at the time of the original enactment of the statute.

In the present case the daily and hourly rates of pay are set forth in section 1 of the collective bargaining contract which deals exclusively with “ wages ”. Failure to pay the amounts prescribed under that section within six days after they are earned, and not a failure to pay vacation money, is what would constitute a violation of the statute.

Section 196 of the Labor Law is a police power regulation intended for the protection of those who are dependent upon their wages for sustenance (New York Central & H. R. R. R. Co. v. Williams, 64 Misc. 15, 27, 28, affd. 136 App. Div. 904, affd. 199 N. Y. 108, affd. sub nom. Erie R. R. Co. v. Williams, 233 U. S. 685, supra). A violation of its provisions is malum prohibitum and not malum in se, and, as such, the statute should be ‘ ‘ strictly construed ’ ’. (People v. Taylor, 192 N. Y. 398, 400; People v. Werner, 174 N. Y. 132, 134.) Acts otherwise innocent and lawful do not become criminal unless there is a clear and positive expression of legislative intent to make them criminal ”. (People v. Adamkiewicz, 298 N. Y. 176, 179.) See, also, People v. Benc (288 N. Y. 318, 323) and People v. Grogan (260 N. Y. 138, 145). In People v. Shakun (251 N. Y. 107, 113-*406114) the doctrine is set forth as follows: “It is well settled that a criminal statute should narrowly be construed; that acts otherwise innocent and lawful, do not become crimes, unless there is a clear and positive expression of the legislative intent to make them criminal. (People v. Phyfe, 136 N. Y. 554; Burks v. Bosso, 180 N. Y. 341.) In People v. Phyfe the court said: ‘ The citizen is entitled to an unequivocal warning before conduct on his part, which is not malum in se, can be made the occasion of a deprivation of his liberty or property.’ ”

Mere failure to pay wages within the time prescribed by the statute automatically constitutes a violation of the law and exposes the employer to criminal prosecution (People v. Werner, supra; People v. Kibler, 106 N. Y. 321, 323); hence the language of the statute is to be given the meaning it conveys to the ordinary employer as to what must be done and what must be avoided, to the end that he may know how to comply with its requirements. (People v. O’Gorman, 274 N. Y. 284, 287.) As pointed out in United States v. Brewer (139 U. S. 278, 288): “ Laws which create crime ought to be so explicit that all men subject to their penalties may know what acts it is their duty to avoid. * * * Before a man can be punished, his case must be plainly and unmistakably within the statute.”

If the term ‘ ‘ wages ’ ’ as used in the Labor Law is to be construed according to its fair import, “ vacation pay ” cannot be embraced in that term by implication. The courts may not by forced construction create a crime. (People v. Stoll, 242 N. Y. 453, 463.)

In support of the People’s position, reliance is placed upon section 21 of the Penal Law, which provides: ‘ ‘ The rule that a penal statute is to be strictly construed does not apply to this chapter [Penal Law] ”. However, it is to be noted that the section goes on to state that its provisions 1 ‘ must be construed according to the fair import of their terms, to promote justice and effect the objects of the law.” A construction of the language of subdivision 2 of section 196 of the Labor Law which makes penal that which is not plainly written in the statute, would hardly promote justice or effect the object of the law which is to compel prompt payment of daily wages to the small wage earner. (People v. Grass, 257 App. Div. 1; New York Central & H. R. R. R. Co. v. Williams, supra, p. 26.)

*407That the Legislature intended “ wages ” as used in the Labor Law to mean the daily rate of pay earned during the preceding six days is forcefully demonstrated by recent amendments to section 71 of the Stock Corporation Law and section 22 of the Debtor and Creditor Law. By one act (L. 1952, ch. 794) the Legislature amended both those sections by defining “ wages ” as used therein to include all benefits payable by an employer for personal services rendered by an employee, specifically including vacation, holiday and severance pay; payments into insurance, welfare or pension funds; and any other amounts due from or payable by the employer. However, the definition of “ wages ” effected by the amendment is expressly limited to the purposes of those two sections. This limitation coupled with the failure to include, in the amending statute, a similar expanded definition for the word wages ” as used in the Labor Law is significant. It shows that “ wages ” as used in the Labor Law was not intended to include vacation pay or other fringe benefits but was to be restricted to the basic rate of pay.

To be sure, the term “ wages ” broadly interpreted includes all of the benefits, monetary or otherwise, which an employee derives from a master and servant relationship. However, the sense in which it is used in a given statute depends not only upon the wording of the statute but upon the purpose of the law as well. The liberal interpretation placed upon it in actions involving civil remedies of employees does not apply to the word as used in a criminal statute. The decisions in civil actions are based upon different considerations and they may not enlarge an employer’s criminal responsibility beyond that indicated by the criminal statute itself.

It is true that for the purpose of giving priority to wage earners over other creditors under the Bankruptcy Act (§ 64, subd. [a], par. [2], U. S. Code, tit. 11, § 104, subd. [a], par. [2]) the Federal courts have held that “ A vacation with pay is in effect additional wages ” (Matter of Wil-low Cafeterias, 111 F. 2d 429, 432); so too with respect to severance pay (Matter of Public Ledger, 161 F. 2d 762). See, also, Matter of Brooklyn Citizen (1 Misc 2d 162, 168). In computing the amount to be awarded an injured employee under the New York Workmen’s Compensation Law, bonuses were held to be part of the *408employee’s wages. (Matter of Ciarla v. Solvay Process Co., 184 App. Div. 629, affd. 226 N. Y. 566) and, similarly, with respect to tips received by an employee from his employer’s customers. (Matter of Sloat v. Rochester Taxicab Co., 177 App. Div. 57, affd. 221 N. Y. 491; Matter of Bryant v. Pullman Co., 188 App. Div. 311, affd. 228 N. Y. 579.) Though these cases involving only civil remedies construe wages to include vacation pay, severance pay, voluntary bonuses and tips, the same construction may not be extended to penal provisions where there is no statutory obligation placed on the employer in the Labor Law or in the Penal Law to make such payments.

Moreover, under the welfare provisions of the collective bargaining contract here, the employer is required to provide and maintain insurance and hospitalization for the benefit of his employees and their families. These benefits accrue immediately upon employment and before any work is performed. While they too fall within the broad interpretation of “ wages ”, they nevertheless do not constitute wages earned six days prior to the date of payment within the meaning of the Labor Law. It would appear, therefore, that the word 1 ‘ wages ” as used in the Labor Law was not intended to include every type of benefit derived by an employee from a master-servant relationship and which might fall within the general category of wages.

The law affords wage earners ample civil remedies for the purpose of assuring them full payment of all additional benefits accruing to them under their contract of employment. If the Legislature desires to provide that failure to pay vacation moneys or other benefits due an employee be deemed criminal, this purpose can readily be effected by appropriate amendment to the Labor Law or to the Penal Law. Under the language of these statutes as now written, defendant was guilty of no criminal act.

Accordingly, the judgment appealed from should be reversed and the information dismissed.