New York State Budget Eliminates Damages for Most Frequency of Pay Claims

Under New York Labor 191, employers are required to pay manual workers every week. But, what happens if an employer pays all the wages that are due to an employee, but pays them late? For example, if an employer pays a manual worker every other week, can the employee sue the employer for violating the frequency of pay law? This question has split appellate courts in New York. New York Governor Hochul’s 2025 budget, however, resolves the question by eliminating the bulk of damages that were previously available to employees. Today’s New York employment law blog discusses the history of frequency of pay claims and the changes the 2025 budget makes to the law.

New York Labor Law §193, Frequency of Pay, and Key Court Decisions: Vega and Grant

New York State has long maintained strict labor protections designed to ensure employees are paid fairly and on time. Two key statutes—Labor Law §193 and Labor Law §191—govern wage deductions and the frequency of pay, particularly for manual workers. Appellate court interpretations, especially the decisions in Vega v. CM & Associates Construction Management, LLC and Grant v. Global Aircraft Dispatch, Inc., have reshaped how these laws are enforced and what remedies are available to workers.

Labor Law §193: Unlawful Deductions

Labor Law §193 prohibits employers from making unauthorized deductions from an employee’s wages. Permitted deductions are limited and must be expressly authorized in writing by the employee or permitted by law, such as deductions for taxes or union dues. While §193 doesn’t specifically address when employees must be paid, it sets the foundation for wage protections in New York and interacts closely with §191 in certain legal contexts.

Labor Law §191: Frequency of Pay for Manual Workers

Labor Law §191(1)(a) requires that manual workers be paid weekly and no later than seven calendar days after the end of the workweek. The New York State Department of Labor defines “manual workers” as employees who spend more than 25% of their working time engaged in physical labor. These rules were designed to protect workers who are often lower-wage earners and are more vulnerable to financial hardship if their pay is delayed.

The Vega Decision

In 2019, the Appellate Division, First Department issued a groundbreaking ruling in Vega v. CM & Associates Construction Management, LLC. The court held that even if a manual worker is eventually paid in full, the failure to pay on a weekly basis, as required by §191, constitutes a violation of the Labor Law. This means an employee can recover “liquidated damages” under Labor Law §198—potentially 100% of the delayed wages—as a penalty for the delayed payment.

Prior to Vega, some courts dismissed pay frequency claims if the employee had received all owed wages, albeit late. Vega shifted the legal landscape by recognizing timely payment as a substantive right, not just a procedural technicality.

The Grant Decision

Following Vega, the legal debate continued over whether similar claims could proceed under other circumstances. In Grant v. Global Aircraft Dispatch, Inc. (2024), the Appellate Division, Second Department offered a contrasting interpretation, deepening the divide in the judiciary.

In Grant, the court declined to follow Vega, holding that Labor Law §198’s liquidated damages provision did not apply where wages were paid late but in full. The Grant court emphasized that §198 did not expressly authorize damages for late payment alone, absent underpayment or deduction.

This disagreement between appellate departments has created a split in authority in New York. While Vega remains binding in the First Department (which includes Manhattan and the Bronx), Grant governs the Second Department (covering Brooklyn, Queens, Long Island, and surrounding counties), making the legal outcome of a frequency-of-pay claim partially dependent on where the lawsuit is filed.

The 2025 Budget Settles the Law

The 2025 New York State Budget amends Section 1983 of the Labor Law. Effective as of May 9, 2025, the amendments effect all cases pending as of or commenced on or after May 9.

Specifically, the amendment limits damages available to employees who have been paid all their owed wages, but who may not have received timely wages under the frequency of pay law. The damages are generally capped to lost interest, set in accordance with the New York Banking Law.

But, for employers with a history of frequency of pay violations, employees may be entitled to liquidated damages equal to the wages due. To trigger this category of damages, the employer must have been subject to a finding or order. In other words, the employer must have been adjudicated in some way as having violated the law; prior allegations in a lawsuit or lawsuits concerning similar claims which were settled before adjudication, would not trigger liquidated damages.

What do the Amendments Mean

Certainly, the amendments are bad news for employees and plaintiff-side employment lawyers. The Vega decision triggered a wave of frequency of pay cases which highly lucrative for law firms, but very damaging for business. The amendments essentially quash an entire area of litigation. But, the flip side is good news for employers who tried to follow the law in good-faith, but may have made a mistake through mere ignorance of a tricky area of law.

Regardless of which side you’re on, the budget amendments settle an unsettled question of law. An issue that was set to be decided by the New York Court of Appeals, has now been settled by lawmakers and the governor. Clarity in the law is almost always a good thing.

Notably, the amendments do not change the availability of traditional wage and claims. Employees can still sue employers for failing to pay minimum wage and overtime. Liquidated damages of 100% also remain available for such claims.

If you have questions about frequency of pay claims, contact a New York minimum wage and overtime lawyer at Famighetti & Weinick PLLC at (631) 352-0050.

Additional resources:

Newsday issued an article here.

Governor Hochul’s press release is here.

The Long Island Employment Law blog is now available on Feedspot as a Top 30 employment discrimination law blog in the country!