Labor Law Amendments Limit Exposure to NY Employers for Pay Frequency Claims, by Keith Gutstein, Esq., Matthew Cohen, Esq., and Solomon Abramov, Esq., 6-3-2025

On May 9, 2025, New York State Governor Kathy Hochul signed into law amendments modifying the state’s Labor Law that will now substantially limit potential damages for pay frequency claims.

Specifically, the amendments curtail damages for violation of New York Labor Law § 191(1)(a), which requires New York employers to pay “manual workers” weekly and “not later than seven calendar days after the end of the week in which the wages were earned” (with certain exceptions). 

A manual worker is defined in NYLL Section 190(4) as “a mechanic, workingman or laborer.” Generally speaking, it has been the long-standing interpretation of the NYS Department of Labor that individuals who spend more than 25% of working time engaged in “physical labor” fit within the meaning of the term “manual worker,” according to the DOL’s frequency of pay FAQ.

Background

 The amendments, which were passed as part of the FY 26 budget proceedings, are welcome news for employers who in recent years have been faced with an increase in frequency of pay class action litigation in part due to a 2019 NYS Appellate Division, First Department ruling Vega v. CM & Associates Construction Management, LLC. This ruling cleared the way for manual workers to recover liquidated damages equal to 100% of the late-paid wages via a private Court action when paid in violation of the weekly pay requirement. A January 2024 ruling by the Appellate Division, Second Department came to the opposite conclusion creating some ambiguity. 

Key Provisions

 With the recent amendments, those in violation of NY Labor Law’s § 191(1)(a) frequency of pay requirement are subject to the following damages:

• No more than 100% of the lost interest due for the delayed payment of wages (as opposed to 100% of the delayed wages) for a first violation calculated using a daily interest rate for each day the payment is late.  This daily interest rate will be based on the annual rate of interest then in effect, as prescribed by the superintendent of financial services (presently 16%). 
• Of note, liquidated damages equal to 100% of the total amount of wages due in violation of the pay requirement may still be sought for any employer who has been subject to one or more previous findings and orders (i.e., court or NY DOL) for violations of Section 191(1)(a) following the amendments effective date.

“A final order or determination” for purposes of determining the penalty for a frequency of pay violation refers to “a single final order or determination made by the commissioner or a court of competent jurisdiction.” 

It remains to be seen if a court order approving a settlement during the Fair Labor Standards Act (FLSA) Cheeks process would be considered such an Order. While that issue may be the subject of future litigation, it appears like there would be a strong argument that Court-approved settlements should not increase the penalty amount for a future claim. 

The amendments took effect May 9, 2025 and applies to causes of action pending or commenced on or after that date.

While this change in the law substantially improves the landscape for defending against frequency of pay claims, employers should still be cognizant of their pay obligations under NY Labor Law in order to avoid penalties and the risk of the employee receiving an attorney’s fees award.

Authors: Keith J. Gutstein, Chair of KD’s Labor and Employment Law Practice Group and Co-Managing Partner of the Long Island Office, Partner Matthew Cohen, and Partner Solomon Abramov