New York Amends Labor Law To Limit Damages For Late Payments to Manual Workers
Introduction
On May 9, 2025, New York State Governor Kathy Hochul signed a bill as part of the 2026 Fiscal Year budget, amending New York Labor Law (“NYLL”) Sections 191 and 198. The purpose of the amendment is to limit liquidated damages recoverable for late wage payments to manual workers. The amendment—which took immediate effect and applies retroactively—affirms that employers must continue to pay manual workers on a weekly basis. Going forward, however, employers who are paying manual workers at least semi-monthly are not liable until their second offense.
Notably, the amendment does not resolve a key legal question: whether employees have a private right of action under NYLL § 191 to directly sue their employer for late wages. The New York State Appellate Courts for the First and Second Judicial Departments have issued conflicting answers to this question, and the issue is now pending review before the New York Court of Appeals.
Background
New York has historically required manual workers to be paid weekly. What constitutes a “manual worker,” however, is a matter of debate. While the NYLL defines “manual worker” as “a mechanic, workingman or laborer,” the New York State Department of Labor (“NY DOL”) has defined “manual workers” as individuals who spend more than twenty-five percent of working time engaged in “physical labor.” Courts have interpreted the term “physical labor” to include numerous physical tasks, including those performed by airport chauffeurs, pizzeria workers, and hairdressers. Due to the ongoing debate surrounding the definition of “manual worker,” the NY DOL makes determinations on a case-by-case basis, focusing on the work performed by the employee rather than their job title.
Currently, NYLL § 191 requires employers to pay manual workers weekly. This law was designed to ensure prompt payment for manual workers who typically rely on their weekly earnings for financial support. Certain employers, however, may seek authorization from the DOL to pay manual workers on a semi-monthly basis if they have either (i) an average of 1,000 employees in New York State for three years preceding the application; or (ii) an average of 3,000 out-of-state employees for the three years preceding the application, and an average of 1,000 employees in New York State for the year preceding the application.
Private Right of Action Under NYLL § 191
The New York State Appellate Courts for the First and Second Judicial Department have decided the issue of whether employees have a private right of action to sue employers for late wage payments differently. In Vega v. CM & Associates Construction Management, LLC,1 the First Department held that manual workers who are paid biweekly have a private right of action for untimely payment of wages under NYLL § 191, even when the full amount of wages has been paid. Conversely, in Grant v. Global Aircraft Dispatch, Inc.,2 the Second Department disagreed with Vega and held that §§ 191(1)(a) and 198 do not create a private cause of action for late wage payments. Grant is currently pending before the New York Court of Appeals.
In the wake of the First Department’s decision in Vega, frequency-of-pay class actions have become common in New York, often resulting in significant monetary settlements. For example, in Bannister v. Kedrion Biopharma Inc.,3the defendant employer agreed to pay close to $1.5 million to settle claims for untimely payment of wages under NYLL § 191.
2025 Amendment
Governor Hochul’s budget bill amending NYLL § 198(1-a) provides that employees may not recover liquidated damages where the employer pays manual workers on regular paydays at least twice per month, and limits damages available for violations of the weekly pay requirement set forth by NYLL § 191. As a result of the changes to New York law:
- If an employer is a first-time offender, an employee can only recover lost interest on the delayed wage payments, calculated using a daily interest rate for each day the payment is late, and based on the annual rate of interest then in effect.
- For violations occurring after May 9, 2025, employees may recover liquidated damages (equal to 100% of delayed wages), but only if the employer is a repeat offender. An employer is a repeat offender if they have been subject to one or more previous findings and “order for violations” where no appeal or review is pending and the time for initiating these proceedings has expired. The “order for violations” can be issued by either the NY DOL or a court of competent jurisdiction. Further, the prior and subsequent violations must pertain to employees who perform the same work in order for the employer to be considered a repeat offender.
Takeaways For Employers
- Employers should review payroll practices to ensure compliance with New York’s frequency-of-pay provision.
- The amendment does not resolve whether NYLL § 191 permits a private right-of-action for frequency-of-pay violations, so class-action lawsuits for late wage payments remain a possibility especially for employers located in the First Department (which includes New York City).
- The amendment also fails to clarify the definition of “manual worker,” making it likely that the frequency-of-pay provision will continue to be applied to jobs that only involve a minimal amount of physical labor.
- Employers should monitor legal developments related to NYLL § 191 and consult counsel as necessary.
Mayer Brown is available to help employers successfully develop and implement employment policies and advise on potential risks and actions that employers can take.
Special thank you to summer associate Devon Bombassei for their contributions to this Legal Update.
1 175 A.D.3d 1144 (1st Dep’t 2019)
