New York Modifies Manual Worker Timely Payment Penalty Rule

On May 9, 2025, Governor Kathy Hochul signed into law an amendment that modifies the penalties associated with employers failing to pay manual workers on a weekly basis. The amended law was effective as of the date of the Governor’s signature and is retroactive, applying to any pending legal claims.

Details

Background

Under existing law, with few exceptions, manual workers must be paid weekly and no later than seven calendar days after the workweek where wages were earned.    The law defines a “manual worker” to mean “a mechanic, workingman or laborer.”

In a frequently asked question (FAQ), the New York Department of Labor (NYDOL) added the following comment regarding the statutory definition:

“It has been the long-standing interpretation of this Department that individuals who spend more than 25% of working time engaged in “physical labor” fit within the meaning of the term “manual worker.” Furthermore, the term “physical labor” has been interpreted broadly to include countless physical tasks performed by employees.”

Only private-sector employers are subject to this pay frequency rule. The rule does not apply to individuals working in an executive, administrative or professional capacity who earn more than $900 a week.   Federal, state, and local government employers are also not subject to the rule.

Class action litigation regarding this weekly pay requirement rapidly increased after a 2019 New York case (Vega v. CM & Assoc. Constr. Mgt.) that held employees may sue employers over late wages (paid less frequently than weekly), even if they were fully paid, and can recover liquidated damages in the full amount of delayed wages. Consequently, an employee who earned $60,000 in a year but was paid bi-weekly instead of weekly would be entitled to $30,000 for that year in damages for late payment of wages.

New Amendment

With the amendment effective May 9, 2005, penalties for violations are  follows:

First Violation - If the employer paid wages on a regular payday at least semi-monthly then the penalty for a violation is no more than one hundred percent of the lost interest found to be due on the delayed wages in accordance with Section 14-a of the Banking Law, which is currently 16 percent per year (approximately 0.3 percent per week).  Thus, if manual workers are paid bi-weekly and have to wait seven days for their paycheck, their damages would be capped at 0.3% of the late wages. Consequently, an employee who earned $60,000 in a year but was paid bi-weekly instead of weekly would be entitled to $9,600 ($60,000 X 16%) as opposed to $30,000 as shown in the previous paragraph for that year in damages for late payment of wages.

Repeat Violations - In cases where the employer has been subject to one or more previous findings and orders for pay frequency violations, liquidated damages remain 100 percent of the wages found to be due.

Recommendations 

If you employ workers in New York, then work with your legal counsel to determine whether these New York workers might be considered “manual workers” for whom weekly payment is required.  
 
If you make the determination that a change to employee pay frequency is required, please notify your ADP service representative immediately to facilitate this change.