New York’s Appellate Division, Second Department, created a split among the state’s appellate courts on whether individuals have a private right of action to recover damages for violations of the frequency of payments provision of New York Labor Law (NYLL). In Grant v. Global Aircraft Dispatch, Inc., the Second Department held that individuals could not bring an action to recover damages for violations of NYLL § 191 affirmatively disagreeing with the First Department’s 2019 decision in Vega v. CM & Associates Construction Management LLC, which had reached the opposite conclusion. This split between the First Department and Second Department will presumably be resolved by the Court of Appeals, New York’s highest court.
New York’s Frequency of Pay Requirements
The provisions of when and how often employees must be paid under New York law are set forth in NYLL § 191. Notably, NYLL § 191(1)(a) requires private employers to pay manual workers weekly, rather than biweekly or semimonthly. The NYLL defines “manual worker” as a “mechanic, workingman or laborer.” The New York Department of Labor (NYDOL) interprets the term more broadly. Specifically, the NYDOL considers “individuals who spend more than 25% of working time engaged in “physical labor” to fit within the meaning of the term “manual worker.” Furthermore, the NYDOL deems “physical labor” to include countless physical tasks performed by employees.
The requirement to pay manual workers on a weekly basis has been the law in New York for over 100 years. Over the last 60 years, prior to the First Department’s decision in Vega, enforcement of NYLL § 191 was handled exclusively by the NYDOL. Violations of the weekly pay requirement led to the imposition of modest penalties issued by the NYDOL.
The First Department’s 2019 Vega Decision
In 2019, the Vega court radically altered the legal landscape. Prior to Vega, the vast majority of courts held that only the NYDOL could enforce the requirements of NYLL § 191. Individuals could not file lawsuits to enforce its provisions. The Vega court changed this. In Vega, the First Department held that there was a private right of action to enforce New York’s weekly pay requirements for manual workers. As such, manual workers (or individuals who claimed they were manual workers) who were paid on a basis other than weekly could pursue a claim for the employer’s purported violation of NYLL § 191. These actions could go forward even if the aggrieved individual received all wages due on a regular (but not weekly) basis. In such actions, plaintiffs seek liquidated damages (in the amount of 100% of all wages that were not paid timely), attorneys’ fees, and prejudgment interest.
Since the Vega decision, both state and federal courts have been inundated with NYLL § 191 claims by individuals who asserted they were manual workers who were not paid weekly. Often, these claims are filed as class actions. Due to the broad definition of “manual worker” and a six-year statute of limitations period, defendant-employers often face significant exposure when these cases are filed; exposure that may run well into the seven figures if not higher. Thus, a seemingly harmless violation of this law could realistically lead an employer to financial ruin.
The Second Department’s January 2024 Grant Decision
In Grant, the Second Department has offered employers a lifeline by creating a split among New York appellate courts concerning whether individual could sue for NYLL § 191 violations. The Grant court held that no private right of action existed and that only the NYDOL could enforce the requirements of NYLL § 191, including its requirement that manual workers be paid on a weekly basis. Indeed, explicitly disagreeing with the holding of the First Department’s decision in Vega, the Grant court held that an individual who believes they should have been paid on a weekly basis can file a complaint with the NYDOL, but cannot file a complaint in court.
Practical Implications and Next Steps
It is almost certain that the Grant decision will be appealed to the New York Court of Appeals. The Grant decision does not (and could not) affirmatively overturn the Vega decision; Vega remains good law in the First Department (defined below). Until and unless the Court of Appeals renders a decision on the issue, both decisions will concurrently remain in effect in their respective jurisdictions.
Thus, individuals who are employed within the First Department – Bronx and New York Counties – continue to have a private right of action to recover damages for violations NYLL § 191. Meanwhile, individuals who are employed within the Second Department – Dutchess, Kings, Nassau, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and Westchester Counties – do not have such a right.
All New York employers should err on the side of caution and continue to and/or begin paying manual workers on a weekly basis. Indeed, employers who fail to pay their manual workers on a weekly basis are exposing their business to the potential for excessive liability that could cripple the business, especially if they operate in the First Department or should the Court of Appeals agree with the First Department rather than the Second Department. New York employers should review – and modify where necessary – their pay frequency policies to ensure compliance.
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