New York Quietly Rewrote the Rules on Pay Frequency Claims This Year; What Employers Should Understand Now

For years, New York employers, particularly in construction and other labor-intensive industries, have been living with an uncomfortable legal reality: even when employees were paid every dollar they earned, the timing of those payments could trigger massive liability. That tension has now been significantly reduced.

In May 2025, New York State enacted a change to its Labor Law that clarified how courts should treat pay-frequency violations and, in doing so, substantially limited employer exposure for what had become a wave of highly technical lawsuits. The underlying rule has not disappeared, but the consequences of violating it have changed in a meaningful way. To understand why this matters, it helps to start with how the issue arose in the first place.

How a Technical Payroll Rule Became a High-Stakes Litigation Risk

New York Labor Law § 191 has long required that so-called “manual workers” (generally employees who spend more than 25 percent of their working time performing physical labor) be paid on a weekly basis, no later than seven days after the workweek ends. The statute draws a sharp line between manual workers and other employees, who may typically be paid semi-monthly or biweekly.

For decades, many employers paid manual workers on a biweekly schedule, particularly in construction, where payroll systems are often standardized across job categories. These workers were not shorted wages and were not paid late in any meaningful sense. They simply received their full pay every two weeks instead of every week.

That practice rarely resulted in litigation until 2019, when a New York appellate court decided Vega v. CM & Associates Construction Management. In that case, the court held that paying manual workers biweekly, even if wages were fully paid, could be treated as an “underpayment” of wages under the Labor Law. The result was startling. Employers could be exposed to 100 percent liquidated damages on the allegedly “late” portion of wages, even though the employee ultimately received everything owed. The decision opened the door to a surge of class action lawsuits focused almost entirely on payroll timing. In many cases, employers faced claims seeking millions of dollars based on six years of biweekly paychecks, despite the absence of any wage theft in the ordinary sense of the term.

A later appellate decision in 2024 limited this exposure, but the split between courts created uncertainty. That uncertainty lingered until the Legislature stepped in.

What Changed in May 2025, And What Did Not

In May 2025, as part of the state budget, New York amended the Labor Law to clarify the remedies available for pay-frequency violations. The amendment took effect immediately and applies not only to new cases, but also to cases that were already pending. Crucially, the law did not eliminate the weekly pay requirement for manual workers. Employers are still expected to comply with that rule. What changed is the financial consequence of failing to do so when wages are otherwise paid in full and on a regular schedule.

Under the amended law, when an employer pays workers consistently and at least semi-monthly, such as on a biweekly payroll, the draconian liquidated damages that had driven so much litigation are no longer available for a first violation. Instead, recovery is limited to interest on the delayed wages, calculated at the statutory interest rate. In practical terms, that interest is often minimal, particularly where the delay is only a matter of days on a biweekly cycle.

The law preserves harsher penalties only for repeat offenders. If, after May 9, 2025, an employer violates the weekly pay rule again following a prior final court judgment or Department of Labor order involving similar violations, full liquidated damages may still be imposed. So, the message is clear: technical missteps are no longer treated the same as repeated noncompliance.

Why This Should be a Relief, Not a Shock, for Construction Employers

For employers in the construction industry, this change was not unexpected. The Vega decision had created extraordinary exposure for companies with large manual workforces, and the resulting litigation environment was widely viewed as untethered from the realities of payroll administration.

By early 2025, Governor Hochul’s budget proposals signaled an intent to rein in these claims, and the final amendment reflected months of discussion and negotiation. The reform was understood as a legislative effort to distinguish between true wage violations and technical timing issues that had been inflated into high-dollar lawsuits.

Rather than rolling back worker protections, the amendment recalibrates the balance between compliance and punishment.

What Employers Should Take Away From This

The practical effect of the amendment is significant. Employers who have been paying manual workers on a regular biweekly or semi-monthly schedule, and who have fully paid wages, now face dramatically reduced exposure for past and pending pay-frequency claims. Many cases that once carried seven-figure theoretical damages now amount to little more than nominal interest. At the same time, the weekly pay requirement remains part of New York law, and employers should not treat the amendment as a license to ignore it. Claims can still be brought, attorneys’ fees may still be at issue, and repeat violations carry real consequences.

For many businesses, this is an opportunity to step back, reassess classifications and payroll practices, and make informed decisions about whether to transition manual workers to weekly pay going forward. For others, it provides clarity and leverage in resolving existing disputes that had previously seemed disproportionate to the conduct at issue.

The Bottom Line

New York’s May 2025 amendment does not eliminate pay-frequency rules, but it does restore a sense of proportionality to how those rules are enforced. Employers who pay workers consistently and in full are no longer subject to windfall damages for technical timing issues, while those who repeatedly ignore the statute remain exposed to meaningful penalties.

For construction companies and other employers with manual workforces, the change represents a long-anticipated shift toward fairness and predictability in an area of the law that had become unnecessarily punitive.

If you have questions about how this change affects your payroll practices, existing claims, or compliance strategy going forward, we feel free to schedule a 15 minute call here today.