A merchant cash advance company in Manhattan just found itself facing a class action lawsuit¹ that could easily exceed six figures in damages. The company—Infusion Capital Group—stands accused of failing to pay minimum wage, failing to pay overtime, and in some cases, failing to pay employees at all. But here's what makes this case particularly devastating: even if the employer had paid every penny owed, they would still be facing statutory penalties for paperwork violations alone.

The lawsuit, filed in September 2025, highlights a reality that too many employers ignore: New York's Labor Law doesn't just care whether you pay employees correctly. It cares deeply about whether you document that pay correctly. Miss a wage notice? That's $5,000 in statutory damages per employee. Fail to provide accurate wage statements? Another $5,000 per employee. These penalties don't require proof of actual harm—just proof that you didn't follow the rules.

This case serves as a stark reminder that compliance isn't just about writing the right checks. It's about creating the right paper trail, providing the right notices, and building systems that prove you're paying people lawfully. When you skip the paperwork, you're not just risking fines—you're eliminating your ability to defend yourself when wage claims arise.

According to the complaint filed by Nicholas Vlisidis, Infusion Capital Group hired him in September 2023 as a Finance Specialist—essentially a sales role focused on cold-calling merchants and generating applications for cash advances. The company scheduled him to work 38 hours per week but regularly required him to work 48 to 55 hours per week without breaks.

Here's where things went sideways fast:

The result? A class action complaint alleging violations affecting 30-40 employees with extraordinarily high turnover—exactly the kind of situation that suggests systemic compliance failures.

New York doesn't trust employers to just "do the right thing" when it comes to wages. The state requires extensive documentation and disclosure at multiple stages of employment. You must provide a written wage notice when someone is hired. You must provide accurate wage statements with every payment. And if you're paying commission-only or using draws against future earnings, you need to document how that structure works and ensure it never drops below minimum wage.

The law assumes that employees who don't receive proper notices and statements are more likely to be underpaid, and case law consistently supports that assumption. When employers can't produce these basic documents, courts tend to side with employees on wage calculations and often extend the statute of limitations because the paperwork violations are considered ongoing.

Employers must provide written notice to employees at the time of hiring that includes:

This notice must be provided within 10 business days of hiring and must be acknowledged by the employee in writing. Employers must retain these notices for six years.

Every time you pay an employee, you must provide a statement showing:

For commission-based employees, this gets more complex. The statement must show the commission earnings for the period, any draw taken, and enough detail for the employee to verify that their total compensation meets minimum wage requirements for all hours worked.

The statutory damages are severe and don't require proof of actual financial harm:

These damages are per employee, meaning a company with 35 employees could face up to $350,000 in statutory penalties alone—before calculating unpaid wages, overtime, or liquidated damages.

Let's break down the financial exposure in the Vlisidis case based on the allegations in the complaint:

If even half of the alleged class members have similar claims:

Total potential exposure: $800,000 to $1 million+

This doesn't account for the reputational damage, management distraction, or the chilling effect on recruiting when prospective employees Google the company and find class action wage theft litigation.

Here's what makes the paperwork violations so dangerous: they eliminate your defenses.

Without § 195.1 Wage Notice:

Without § 195.3 Wage Statements:

In the Infusion Capital case, the plaintiff claims the employer never provided either document. That means the company has no contemporaneous records to refute his allegations about hours worked, pay received, or the terms of his employment.

By contrast, consider a Manhattan staffing agency that pays recruiters on commission. Here's what they do differently:

At Hire:

Every Pay Period:

Quarterly Audits:

The result? Zero wage claims in five years of operation, despite employing 40+ commission-based employees. The investment in paperwork and systems pays for itself many times over.

If you pay commissions, you face additional compliance burdens:

It's not enough for commissions to average out over time. Each pay period must satisfy minimum wage for hours worked that period. If an employee works 50 hours but earns $400 in commissions, you owe additional wages:

Many employers provide commission "draws"—regular payments against future earnings. These are fine, but draws don't satisfy minimum wage if no commissions materialize, you can't deduct unearned draws from future wages if it drops pay below minimum, and draws must be documented as advances, not guaranteed wages.

Paying employees "commission only" with no base wage is extremely risky because it requires perfect time tracking to calculate minimum wage, any week with low sales creates exposure, and it creates accounting complexity. Consider hybrid structures: base hourly rate plus commission.

Beyond missing the § 195.1 notice and § 195.3 statements, employers make these related mistakes:

An offer letter is not a substitute for the statutory wage notice. The notice must include specific information in a specific format. Use the DOL's model notice or have counsel draft compliant versions.

The law requires notice within 10 business days of hiring. If orientation is two weeks after start date, you're already non-compliant. Provide notices on day one.

Any time pay rates, pay structure, or payday changes, you must provide updated § 195.1 notice within 7 days before the change. Many employers provide one notice at hire and never update.

Many payroll systems don't include all required fields by default. Verify your wage statements show dates covered, hours worked, rate(s) of pay, gross wages, each deduction with explanation, and net wages.

You can provide notices and wage statements electronically, but only if employee consents in writing, employee has reasonable access to electronic records, and you can prove delivery/receipt.

Here's what you can't argue in litigation without proper documentation:

Every defense in a wage case relies on documentation. Without it, you're arguing against the employee's sworn testimony with nothing but your word. Courts don't find that compelling.

The Vlisidis case underscores a harsh reality: employers who fail to pay correctly rarely document correctly either. And when both fail, the liability compounds exponentially.

Even companies that pay perfectly can face five-figure penalties per employee for missing paperwork. But more commonly, the companies that skip wage notices and wage statements are also cutting corners on actual pay—which means they're facing unpaid wage claims, liquidated damages, statutory penalties, attorney's fees, and reputational damage all at once.

The solution isn't complicated. It's systematic. Nail down your pay structure before hiring. Provide compliant notices on day one. Issue perfect pay stubs every time. Track time religiously. Audit regularly. When you find problems, fix them immediately.

Documentation creates accountability. Accountability creates compliance. And compliance protects your business when former employees call plaintiff's attorneys looking for payday.

New York's Labor Law is industry-agnostic and unforgiving. Whether you're running restaurants or financial services firms, retail shops or tech startups, the rules are the same. Pay people correctly. Document it properly. And build systems that prove you're doing both.

The paperwork isn't optional. It's the evidence that saves you when everything else goes wrong.

Keep fighting the good fight.

Disclaimer: This article provides general information about New York employment law and should not be construed as legal advice for any specific situation. Employment law is highly fact-specific and varies by jurisdiction. Employers facing wage and hour issues should consult with qualified employment counsel to assess their specific circumstances and develop appropriate compliance strategies.