Article contributed by Alexander Soric, Ellenoff Grossman & Schole LLP
New York Labor Law (“NYLL”) Section 191 mandates that employers must pay “manual workers” on a weekly basis within seven calendar days of the week during which the wages are earned. If manual workers are not paid on this weekly basis, employees have a private right of action under Section 191 to seek to recover liquidated damages, which are now mandatory under Section 198(1-a), even though the “manual workers” were paid in full the following week.
Employees who are successful in establishing their “late payment” claims are entitled to recover liquidated damages in the amount of 100% percent of their delayed wages, in addition to interest, attorneys’ fees and costs. It is extremely difficult to defend these “delayed wage” claims in cases where employees are considered to be “manual workers” within the meaning of Section 191. Perhaps the most difficult issue for employers is in determining who qualifies as a “manual worker,” as even an unintentional misclassification of a worker can result in significant liability. To be clear – full payment of wages is not a defense if those wages were not paid weekly as required.
The New York Labor Law defines a manual worker as “a mechanic, workingman or laborer,” who spends more than 25% of working time engaged in physical labor. Common tasks classified as physical labor include heaving lifting, stocking shelves, unpacking boxes and bagging purchases, cleaning, and standing and walking for long periods of time. The term “manual worker” can therefore refer to individuals working in retail, customer service, and certainly hospitality.
The NYS Department of Labor (“DOL”) has issued various opinion letters over the years stating that the following job classifications, among others, should be considered as “manual workers”: customer service and sales associates; cashiers; hairdressers; restaurant workers; supermarket employees; pharmacy technicians; security guards; janitors; carpenters; pizza makers and chauffeurs. As made clear by these DOL opinion letters, the term “manual worker” is not necessarily classified by job title, but rather job description and duties. Employers must exercise caution in properly classifying employees, as the cost and consequences of defending these claims and resulting liability are significant, especially considering the NYLL has a six year statute of limitations.
The NYLL provides for separate pay frequency requirements for “clerical and other workers” who might otherwise be considered “manual workers” and exempts from this pay frequency law “professional, executive and administrative” employees who earn at least $900 per week. To qualify as a bona fide administrative employee, the employee’s primary duty must consist of the performance of office or non-manual fieldwork, directly related to management policies or general operations, and the employee must customarily and regularly exercise discretion and independent judgment, among other things.
This private right of action was first recognized by the NYS Appellate Division, First Department (which covers New York and the Bronx counties), in its 2019 decision in Vega v. CM & Associates Construction Management, LLC, and has continued to be uniformly followed by both federal and NYS courts even though none of the other three Appellate Divisions, nor New York’s highest court, the Court of Appeals, have affirmed that such a private right of action exists under Section 191. Prior to the Vega decision, companies faced a $1,000 fine for the first offense of violating this payday law, $2000 for the second offense, and $3000 for subsequent violations, and the state and federal courts in New York had maintained that there was no private action for untimely payments under Section 191.
More recently, an employee exercised that private right of action and filed a pay frequency class action lawsuit in New York federal court against Walmart. The employee alleged she was employed by Walmart as an hourly-paid maintenance worker at its store in East Setauket from about 2003 to January this year. She says she was a “manual worker” within the meaning of NYLL 191, as over 25 percent of her duties were physical tasks, including cleaning, stripping and waxing the floor, cleaning and maintaining the inside and outside of the store and standing for long periods of time. The employee claimed that Walmart failed to pay her and other employees “on a weekly basis and not later than seven calendar days after the end of the week in which the wages are earned.” Plaintiff also wanted to represent all others similarly affected employees and sought injunctive and declaratory relief, compensatory damages, liquidated damages, punitive damages, attorneys’ fees and other appropriate relief for herself and a putative class. Ultimately, in February 2022, Walmart settled the case, likely fearing that a single plaintiff action could turn into a class including thousands of manual workers.
As a result of the Vega decision, and the cases following it, including the Walmart case, Hospitality employers are strongly encouraged to review their payroll methods and ensure adherence to the NYLL Section 191 and make wage payments to manual workers weekly.
Alexander Soric is of counsel at Ellenoff Grossman & Schole LLP in New York City and practices in the firm’s Labor and Employment Practice Group. As a first chair, Mr. Soric represents management in labor relations, including in numerous arbitration hearings, collective bargaining, mediations and in matters before the National Labor Relations Board. He has represented management in several class actions brought under the Fair Labor Standards Act, the Davis-Bacon Act and State wage-hour matters in federal and state courts and in federal, state and local agencies. Alexander Soric can be reached at asoric@egsllp.com or via phone at 212-370-1300.
