In New York State’s 2026 budget signed by Governor Kathy Hochul on May 9, 2025, the legislature has amended the New York Labor Law (“NYLL”) to remove an employee’s right to be paid liquidated damages for almost all types of first time “manual worker” pay frequency claims under NYLL § 191.
Employment lawyers will recall the decision in Vega v. CM & Associates Construction Management LLC, 175 A.D.3d 1144, 107 N.Y.S.3d 286 (2d Dep’t 2019) where the First Department held that qualifying “manual workers” had a private right of action to sue their employers for violations of the weekly pay frequency requirement. There the court held that an employee could recover 100% of their untimely wages as liquidated damages due to the employer’s failure to pay the employee in a timely fashion even if the employee had been paid in full on a different timetable, i.e., biweekly instead of a weekly schedule. Many employers found this decision provided an unfair windfall to such workers.
Then came the decision in Grant v. Global Aircraft Dispatch, 223 A.D.3d 712, 204 N.Y.S.3d 117 (2d Dep’t 2024) in which the Second Department expressed its disagreement with the First Department’s holding in Vega holding directly to the contrary, to wit, that manual workers do not have a private right of action under NYLL § 198 to pursue potential liquidated damages. Neither of these decisions made it to the Court of Appeals leaving the legislature to address the split in the Departments.
The legislature has done so, such that, beginning May 9, 2025, applicable to all pending actions or any actions commenced after that date, New York Labor Law § 198 now provides that: if an employer is a first time violator of the provision and the employees are still paid on a no less than semi-monthly basis, in any claim under NYLL 191, an employee would only be permitted to recover lost interest due to delayed payment calculated using a daily interest rate set by the State of New York.
However, if an employer engages in repeated unlawful pay frequency practices, the employee will be able to recover liquidated damages equal to 100% of their late paid wages. This could occur where employees make claims against an employer following the effective date of the statute and have been:
In other words, employers that have actually been subject to a final order or determination made by the Commissioner of Labor related to similarly situated employees will still be on the hook for liquidated damages. In splitting the baby, as it were, the legislature issued a warning that employers will get only one bite of the apple in this situation so they should pay close attention to their pay practices to avoid the severe consequences of a second violation.