Worker Pay Drops in New York: Understanding Changes in Workers’ Comp
The
State of New York
Has recently made major alterations to the regulations affecting numerous manual laborers. Starting from May 9, 2025, being paid later than agreed will not qualify these workers for significant additional pay, even when employers break state labor laws.
By signing Bill A03006C as part of the fiscal years 2025-2026 budget,
Governor Kathy Hochul
significantly diminishes the compensation employers have to provide when they do not adhere to the weekly payment stipulations for manual laborers as outlined in Section 191 of New York’s Labor Law.
What was the previous wording of the law?
Following the 2019 Vega v. CM & Associates Construction Management, LLC ruling, manual laborers gained the ability to file lawsuits against their employers for failing to pay them on a weekly basis, as mandated by law. Despite receiving complete compensation, delays in payment qualified them for liquidated damages equivalent to 100 percent of the overdue wages.
In reality, this resulted in significant payments. For instance:
- A manual laborer making $50,000 annually when paid every two weeks might be eligible for $25,000 yearly in compensation claims.
- The law permitted claims covering up to six years, which could result in potential payments of $150,000 for each employee.
- A firm having 100 of these workers might confront $15 million in potential legal liability.
What modifications does the new law introduce?
Section U of the recent legislation reverses this structure. As a result, manual laborers will not be able to claim 100% of overdue wages as compensation if they receive payment tardily.
They can only assert compensation for missed interest, computed according to Article 14-a of New York’s Banking Law, which is presently established at an annual rate of 16%, equivalent to roughly 0.3% each week.
Under the new regulation: If someone owes you $1,000 and pays up one week late, you can no longer demand an additional $1,000. Instead, you are now eligible for approximately $3 in interest.
Who does this affect?
This change targets so-called “manual workers”, defined by the State Labor Department as those who spend at least 25% of their time doing physical labor (lifting, cleaning, cooking, building, etc.).
For these workers, weekly pay isn’t a luxury, it’s a financial necessity. Many live paycheck to paycheck, and late wages often mean relying on credit cards, late fees, or emergency loans.
Are there any exceptions?
Certainly. The legislation permits complete compensation (equivalent to missed wages) if an employer has previously faced penalties for breaking the weekly payment regulation and persists in doing so.
Employers may seek approval from the State Labor Department to reduce the frequency of payments. However, unless granted this permission, paying employees weekly remains legally mandatory.
What implications does this have for employees?
Although the legislation maintains the requirement for weekly payments, eliminating the financial penalty undermines practical enforcement. With little repercussions at stake, employers who delay payment now encounter negligible risks.
This legal shift tilts the balance toward employers and leaves manual workers with one less effective tool to defend their rights, especially in sectors where delayed wages are common and working conditions already precarious.
This decrease in compensation for delayed wages might be a reaction to the flood of class-action lawsuits that inundated businesses in New York. However, viewed through a lens focused on citizens’ rights, this change significantly diminishes the legal safeguards available to manual laborers, leaving them with less protection against ongoing issues of delayed payments.
Check: