By Rachel H. Khedouri, Esq. and Sharina Rodriguez, Esq
“Pay frequency” lawsuits have become a cottage industry in New York in recent years. The trend began following the 2019 Appellate Division decision in Vega v. CM & Assoc. Constr. Mgmt., LLC, in which the court held that workers have a private right of action for claims under New York Labor Law § 191 (“Section 191”). Section 191 generally requires private sector employers to provide full pay to manual workers on a weekly basis (and not later than seven days after the end of the week in which the wages were earned). Although there are several cases currently on appeal that could change the landscape of these claims, New York employers should be cautious when determining the pay frequency for their employees, especially those who arguably could be considered manual workers. Here are some FAQs to help New York employers better understand this little-known law:
Who is a “manual worker”?
Guidance is relatively limited when it comes to interpreting the definition of “manual worker” under the law. Section 190(4) of the New York Labor Law defines a manual worker as “a mechanic, workingman or laborer,” however the New York Department of Labor (“DOL”) historically has interpreted the term more broadly to mean an individual who spends more than 25% of their working time engaged in physical labor. The DOL has issued various opinion letters determining that certain employees across diverse industries – such as cashiers, hairdressers, customer service representatives, sales associates, janitors, carpenters, pizza makers, restaurant workers, supermarket employees, and pharmacist technicians – are manual workers. The DOL has made clear that the determination of whether an individual is a manual worker is to be made on a case-by-case basis with a focus on the actual work performed by the employee, irrespective of job title.
Are there any exceptions to the requirement to pay manual workers on a weekly basis?
Yes. For example, “professional, executive and administrative” employees who earn at least $900.00 per week are exempt from the pay frequency requirements of Section 191. Manual workers for non-profit entities also are not required to be paid on a weekly basis, and instead, must be paid as agreed by the employee and employer, but not less frequently than semi-monthly. Larger employers – those with an average of 1,000 employees in New York for the prior three years or an average of 3,000 out-of-state employees for the prior three years and 1,000 New York employees for one year – may apply to the Commissioner of Labor for permission to pay manual workers on a bi-weekly or other basis, although it is not clear how readily these exceptions are granted and whether this would expose employers to DOL scrutiny. The form to request an exception can be found HERE.
What are the penalties for not paying manual workers on a weekly basis?
Employers may be required to pay liquidated damages in the amount of 100% of the delayed wages — which in practice can amount to 50% of the employee’s paid wages – for up to six years, plus interest and attorneys’ fees and costs. In fact, employers may be subject to payment of damages even where the employee actually has been paid in full for their work hours, albeit on a bi-weekly or other basis. Increasingly, these claims are being brought as large class action suits, making potential damages significant.
What should employers do? Given the vague statutory definitions and the DOL’s reasoning, New York employers should consider whether their employees could be deemed manual workers by conducting an individualized analysis of job duties for each position. For those jobs that fall into a grey area, employers may wish to confer with counsel to determine whether to pay on a weekly, bi-weekly or other basis.
If you have any questions relating to pay frequency or other compensation policies, please feel free to reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.