On May 9, 2025, New York Governor Kathy Hochul signed Senate Bill S3006C into law which concerns New York State’s education, labor, housing, and family assistance budget for the 2025-2026 fiscal year. This budget, among many other things, amends New York Labor Law § 198 to limit the damages available in cases brought under NY Labor Law § 191, otherwise known as “frequency-of-pay cases.”
By way of background, NY Labor Law § 191(1)(a) requires that manual workers be paid on a weekly basis. The Labor Law defines a “manual worker” as a “mechanic, workingman, or laborer,” and the New York Department of Labor has issued guidance that manual workers are individuals who spend more than 25% of their employment hours engaged in “physical labor.”
Numerous cases have been brought by manual workers who were paid bi-weekly (or less frequently) claiming that the employers’ failure to pay weekly constituted a failure to pay wages and thus entitled them to recover 100% of those “unpaid” wages as liquidated damages that are available under the NY Labor Law. This statutory construct resulted in significant windfalls for manual workers (who had experienced no real damage) and considerable expense for employers who paid them bi-weekly instead of weekly.
This amendment to the Labor Law, while clarifying that a private right of action exists (a point about which the First Department and the Second Department issued conflicting decisions) eases the potential penalties for employers by limiting manual workers’ ability to seek liquidated damages in frequency-of-pay cases. Specifically, for first-time violations where an employer has paid its employees “on a regular payday, no less frequently than semi-monthly,” the employer is now liable only for “the lost interest found to be due for the delayed payment of wages.” For this purpose, interest will be calculated based on a daily interest rate under New York usury law (currently 16% per annum) for each day a payment is late. However, for repeat violations, employees become entitled to liquidated damages equal to 100% of the total amount of wages found to be due.
While the obligation to pay manual workers weekly remains on the books in New York State, this amendment provides relief to employers who have no prior history of violating the frequency-of-pay requirement. First-time violators will no longer be subject to expensive liquidated damages claims by employees. However, employers with a history of violations need to be mindful of the severe penalties that the legislature preserved under these amendments, and all New York employers should thus be sure to pay manual workers on a weekly basis.
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