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Following amendment, employers will no longer be required to pay 100 percent liquidated damages for late wage payments to “manual workers,” who must be paid on a weekly basis. Instead, employers will only be responsible for interest on these late wages, so long as the employer has not been previously found liable for the same violation.

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Previously, manual workers were eligible to recover 100 percent of their late wages if they were not paid weekly, even when they received the full amount of their wages owed biweekly, which led to a deluge of litigation and costly settlements in recent years.

The amendment takes effect immediately and applies to new and pending lawsuits.

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The recently passed 2025 New York State budget bill includes an amendment to the New York Labor Law that will have major implications for employers sued for late wage payments. The changes significantly reduce the potential damages that employees can be awarded in these lawsuits, which will alter the landscape for current and future litigation.

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While many employees are paid on a biweekly or semimonthly basis, New York Labor Law Section 191 requires that businesses pay “manual workers” – those who spend more than 25 percent of their working time performing physical labor – on a weekly basis. This is an oftentimes overlooked requirement that can subject employers to enormous penalties, typically via class action litigation. Failure to pay manual workers within seven days of when their wages are earned results in 100 percent liquidated damages of the amounts that were paid late, even when those late payments arrive the following week in their biweekly paychecks.

Under the revised New York Labor Law Section 198(1-a), manual workers can now only recover <em>interest</em> on late wage payments – not liquidated damages in the total amount of delayed wages – so long as they receive their full paycheck on at least a semimonthly basis. Interest will be calculated on a daily rate for each day payment is late based on the annual rate of interest then in effect (currently 16 percent). The amendment is welcome news for employers, which have been hit with a spate of litigation in recent years after a New York state appellate court ruled in 2019 that manual workers have a private right of action for such frequency of pay claims.

Despite the changes to the New York Labor Law, not all employers are off the hook for liquidated damages. If an employer has previously been found liable for late wage payments to manual workers, full liquidated damages will be available. The employer will be responsible for 100 percent liquidated damages of the amounts that were paid late. These increased penalties kick in only after the initial order from the New York State Department of Labor or a court that is no longer subject to appeal or judicial review. Further, the amendment does not change the New York State Department of Labor’s right to issue liquidated damages to employers for late wage payments – up to 100 percent of unpaid wages or 300 percent for willful violations.

Notably, the amendment states that these changes take effect immediately and apply both to cases filed after May 9 and to those causes of action that are still pending.

BakerHostetler’s Labor and Employment Practice Group has significant experience in counseling clients and defending against these claims and is available to advise employers about this amendment and the litigation of these claims going forward.

Brakes Pumped on New York Labor Law’s Manual Worker Claims

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