NY State Senate Bill 2023-S9811

Current Bill Status - In Senate Committee Labor Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 31, 2024	referred to labor

2023-S9811 (ACTIVE) - Details

Current Committee:: Senate Labor
Law Section:: Labor Law
Laws Affected:: Amd §§191 & 198, Lab L

2023-S9811 (ACTIVE) - Summary

Removes the requirement that an employer has employed an average of one thousand or more persons in the past three years in order to pay less frequently than weekly, but not less frequently than semi-monthly; provides for damages for violations where the employer paid the employee wages on a regular payday, no less frequently than semi-monthly.

2023-S9811 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9811

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the labor law, in relation to payments, costs and
damages

 
PURPOSE:

The purpose of this bill is to clarify and provide penalties for
violations of the frequency of pay requirement.

 
SUMMARY OF PROVISIONS:

Section 1: Amends subparagraph (ii) of paragraph a of subdivision 1 of

§ 191 of the labor law to provide that the Commissioner of Labor may
authorize any employer to pay its manual workers no less frequently than
semi-monthly if the Commissioner determines that the employer has a
history of meeting its payroll responsibilities or other financial
information to demonstrate an ability to meet payroll responsibilities;

the employer has proof of workers' compensation and disability coverage;
the employer has no outstanding warrants from the Department of Taxation
and Finance or the Department of Labor related to failure to remit state
personal income tax withholding or unemployment insurance contributions;
and the employer has computerized record keeping system for payroll
identifying hours worked, rate of pay, gross wages, deductions and date
of pay for each employee.

Section 2: Amends subdivision 1-a of § 198 of the labor law to provide
penalties that are available for frequency of pay violations, including
that an employer would be subject to a penalty of 100 percent of lost
interest found to be due for the delayed payment of wages for each manu-
al worker for a first violation. An employer would be subject to a
penalty of 300 percent of lost interest found to be due for a frequency
of pay violation for each manual worker for any employer subject to a
previous order for a pay frequency violation for which no proceeding for
administrative or judicial review is pending and the time for initiation
of such proceeding shall have expired and it must relate to the employ-
ees performing the same work as the prior violation. An employer would
be subject to liquidated damages equal to 25 percent of the total amount
of the wages found to be paid only if the employer, after the effective
date, has been issued two or more separate administrative orders to
comply for pay frequency violations for which no proceeding for adminis-
trative or judicial review is pending and the time for initiation of
such proceeding shall have expired and they must relate to the employees
performing the same work as the prior violations.  An "order" shall be a
single order regardless of the number of employees or the timer period
that was subject to such order.

Section 3: Provides that this act shall take effect immediately and
shall apply to causes of action pending or commenced on or after the
effective date.

 
JUSTIFICATION:

The 2019 Appellate Division, First Department decision in Vega v. CM &
Associates Construction Management, LLC held that payment of wages to
"manual" workers other than on a weekly basis (e.g., semi-monthly
payment) is subject to the private right of action and substantial
penalties associated with wage theft (Labor Law § 198(1-a)), even though
workers are otherwise fully paid the wages owed. Pursuant to Labor Law §
198(1-a), and due to the Vega decision, these frequency of payment
claims have been brought seeking liquidated damages equal to half of all
wages paid up to 6 years (the statute of limitation), plus attorneys'
fees. The result of this interpretation of the law is that private
employers have been subject to significant claims in the hundreds of
millions of dollars for some employers - in instances where employees
were fully compensated. These are not claims where employees have not
been paid their wages; they have received all of their wages. Payroll
was simply processed biweekly instead of weekly.

In 2024, the Appellate Division, Second Department, in Grant v.  Global
Aircraft Dispatch, rejected the Vega decision and held violations of the
pay frequency provisions are not subject to private lawsuits, but rath-
er, enforced administratively by the Department of Labor. The conflict-
ing cases has caused confusion and uncertainty.

New York employers subject to frequency of pay claims have been subject
to lawsuits seeking millions of dollars and have paid tens of millions
of dollars settlements from these cases. New York's employers already
are dealing with increased costs for goods and services, unemployment
insurance, bank lending, and wages, including the recently increased
minimum wage. The Vega decision was wrongly decided and the Grant deci-
sion was correct. This legislation will clarify the law and provide
certainty regarding the penalties that are available under the law to
punish an employer who violates the law that balances the interests of
employers and employees.

 
FISCAL IMPACT ON THE STATE:

None.

 
LEGISLATIVE HISTORY:

New bill.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply retroactively to
causes of action pending or commenced on or after the effective date.

2023-S9811 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9811
 
                             I N  S E N A T E
 
                               May 31, 2024
                                ___________
 
 Introduced  by  Sen.  COONEY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Labor
 
 AN ACT to amend the labor  law,  in  relation  to  payments,  costs  and
   damages
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraph (ii)  of  paragraph  a  of  subdivision  1  of
 section  191  of  the labor law, as amended by chapter 38 of the laws of
 1989 and the opening paragraph as amended by chapter 168 of the laws  of
 1993, is amended to read as follows:
   (ii)  The  commissioner  may  authorize  an employer [which has in the
 three years preceding the application employed an average of  one  thou-
 sand  or  more  persons  in this state or has for one year preceding the
 application employed an average of one thousand or more persons in  this
 state  and  has  for  three  years preceding the application employed an
 average of three thousand or more persons outside the state] to pay less
 frequently than weekly but not less frequently than semi-monthly if  the
 employer furnishes satisfactory proof to the commissioner of its contin-
 uing ability to meet its payroll responsibilities. In making this deter-
 mination  the commissioner shall consider the following: (A) the employ-
 er's history meeting its payroll responsibilities in New York  state  or
 if  no  such  history  in  New  York state is available, other financial
 information, as requested by the commissioner,  which  will  assist  the
 commissioner  in determining the likelihood of the employer's continuing
 ability to meet payroll responsibilities; (B) proof  of  the  employer's
 coverage  for workers' compensation and disability; (C) proof that there
 are no outstanding warrants of the department of taxation and finance or
 the department of labor against the employer for failure to remit  state
 personal  income  tax  withholdings  or  unemployment insurance contrib-
 utions; and (D) proof that the employer has a computerized record  keep-
 ing system for payroll which, at a minimum, specifies hours worked, rate
 of  pay,  gross wages, deductions and date of pay for each employee.  If
 the employers' manual workers are represented by a  labor  organization,
 the  commissioner shall not grant an employer's application for authori-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15819-01-4
 S. 9811                             2
 
 zation under this subparagraph unless that labor  organization  consents
 thereto.
   §  2.  Subdivision  1-a of section 198 of the labor law, as amended by
 chapter 362 of the laws of 2015, is amended to read as follows:
   1-a. On behalf of any employee paid less than the wage to which [he or
 she] SUCH EMPLOYEE is entitled under the provisions of this article, the
 commissioner may bring any legal action necessary, including administra-
 tive action, to collect such claim and as part of such legal action,  in
 addition  to  any other remedies and penalties otherwise available under
 this article, the commissioner shall assess  against  the  employer  the
 full amount of any such underpayment, and an additional amount as liqui-
 dated damages, unless the employer proves a good faith basis for believ-
 ing  that  its  underpayment  of  wages  was in compliance with the law.
 Liquidated damages shall be calculated by the commissioner  as  no  more
 than  one  hundred percent of the total amount of wages found to be due,
 except such liquidated damages may be up to three hundred percent of the
 total amount of the wages found to be due for  a  willful  violation  of
 section  one  hundred  ninety-four of this article.  NOTWITHSTANDING THE
 PROVISIONS OF THIS SUBDIVISION, LIQUIDATED DAMAGES SHALL NOT BE APPLICA-
 BLE TO VIOLATIONS OF PARAGRAPH A  OF  SUBDIVISION  ONE  OF  SECTION  ONE
 HUNDRED  NINETY-ONE OF THIS ARTICLE WHERE THE EMPLOYER PAID THE EMPLOYEE
 WAGES ON A REGULAR PAYDAY, NO LESS FREQUENTLY  THAN  SEMI-MONTHLY.  SUCH
 VIOLATIONS SHALL BE SUBJECT TO DAMAGES AS FOLLOWS:
   (I)  NO MORE THAN ONE HUNDRED PERCENT OF THE LOST INTEREST FOUND TO BE
 DUE FOR THE DELAYED PAYMENT OF WAGES CALCULATED USING A  DAILY  INTEREST
 RATE  FOR  EACH DAY PAYMENT IS LATE BASED ON THE ANNUAL RATE OF INTEREST
 THEN IN  EFFECT,  AS  PRESCRIBED  BY  THE  SUPERINTENDENT  OF  FINANCIAL
 SERVICES  PURSUANT  TO  SECTION  FOURTEEN-A  OF  THE BANKING LAW FOR THE
 EMPLOYER'S FIRST VIOLATION; OR
   (II) THREE HUNDRED PERCENT OF THE LOST INTEREST FOUND TO  BE  DUE  FOR
 THE  DELAYED PAYMENT OF WAGES CALCULATED USING A DAILY INTEREST RATE FOR
 EACH DAY PAYMENT IS LATE BASED ON THE ANNUAL RATE OF  INTEREST  THEN  IN
 EFFECT, AS PRESCRIBED BY THE SUPERINTENDENT OF FINANCIAL SERVICES PURSU-
 ANT TO SECTION FOURTEEN-A OF THE BANKING LAW FOR ANY EMPLOYER SUBJECT TO
 A PREVIOUS ORDER ISSUED UNDER SECTION TWO HUNDRED NINETEEN OF THIS CHAP-
 TER  FOR  VIOLATIONS  OF  PARAGRAPH  A OF SUBDIVISION ONE OF SECTION ONE
 HUNDRED NINETY-ONE OF THIS ARTICLE FOR WHICH NO PROCEEDING FOR  ADMINIS-
 TRATIVE  OR  JUDICIAL  REVIEW AS PROVIDED IN THIS CHAPTER IS PENDING AND
 THE TIME FOR INITIATION OF SUCH PROCEEDING SHALL HAVE EXPIRED AND RELAT-
 ING TO EMPLOYEES PERFORMING THE SAME WORK; OR
   (III) FOR A VIOLATION OCCURRING AFTER THE EFFECTIVE DATE OF THE  CHAP-
 TER  OF  THE LAWS OF TWO THOUSAND TWENTY-FOUR THAT AMENDED THIS SUBDIVI-
 SION, LIQUIDATED DAMAGES EQUAL  TO  TWENTY-FIVE  PERCENT  OF  THE  TOTAL
 AMOUNT  OF  THE  WAGES  FOUND  TO BE PAID IN VIOLATION OF PARAGRAPH A OF
 SUBDIVISION ONE OF SECTION ONE HUNDRED NINETY-ONE OF THIS ARTICLE IF THE
 EMPLOYER, AFTER THE EFFECTIVE DATE OF THE CHAPTER OF  THE  LAWS  OF  TWO
 THOUSAND  TWENTY-FOUR THAT AMENDED THIS SUBDIVISION, HAS BEEN ISSUED TWO
 OR MORE SEPARATE ORDERS UNDER SECTION TWO HUNDRED NINETEEN OF THIS CHAP-
 TER FOR VIOLATIONS OF PARAGRAPH A OF  SUBDIVISION  ONE  OF  SECTION  ONE
 HUNDRED  NINETY-ONE OF THIS ARTICLE FOR WHICH NO PROCEEDING FOR ADMINIS-
 TRATIVE OR JUDICIAL REVIEW AS PROVIDED IN THIS CHAPTER  IS  PENDING  AND
 THE TIME FOR INITIATION OF SUCH PROCEEDING SHALL HAVE EXPIRED AND RELAT-
 ING TO EMPLOYEES PERFORMING THE SAME WORK.
   FOR PURPOSES OF THIS SECTION, AN ORDER UNDER SECTION TWO HUNDRED NINE-
 TEEN  OF  THIS CHAPTER SHALL CONSTITUTE A SINGLE ORDER REGARDLESS OF THE
 NUMBER OF EMPLOYEES OR THE TIME PERIOD THAT WAS SUBJECT TO  SUCH  ORDER.
 S. 9811                             3
 
 In  any action instituted in the courts upon a wage claim by an employee
 or the commissioner in which the  employee  prevails,  the  court  shall
 allow  such employee to recover the full amount of any underpayment, all
 reasonable  attorney's  fees, prejudgment interest as required under the
 civil practice law and rules, and, unless the  employer  proves  a  good
 faith  basis to believe that its underpayment of wages was in compliance
 with the law, an additional amount as liquidated damages  equal  to  one
 hundred percent of the total amount of the wages found to be due, except
 such  liquidated damages may be up to three hundred percent of the total
 amount of the wages found to be due for a willful violation  of  section
 one hundred ninety-four of this article.
   §  3. This act shall take effect immediately and shall apply to causes
 of action pending or commenced on or after such effective date.

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Senate Bill S9811

Sponsored By

Current Bill Status - In Senate Committee Labor Committee

2023-S9811 (ACTIVE) - Details

2023-S9811 (ACTIVE) - Summary

2023-S9811 (ACTIVE) - Sponsor Memo

2023-S9811 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S9811

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Sponsored By

Jeremy A. Cooney

Current Bill Status - In Senate Committee Labor Committee

2023-S9811 (ACTIVE) - Details

2023-S9811 (ACTIVE) - Summary

2023-S9811 (ACTIVE) - Sponsor Memo

2023-S9811 (ACTIVE) - Bill Text download pdf

Comments