Rochester Democrat & Chronical: State labor law penalizes small businesses
April 28th, 2025
The following column appeared in print on Sunday, April 27, 2025.
Imagine you operate a mom-and-pop grocery store, a salon, or a small information technology shop. Would you assume that your employees are manual workers?
The designation seems more appropriate for roofers, plumbers, masons and factory workers. However, under New York state’s arcane labor laws, specifically Labor Law § 191, grocery clerks, hair stylists and computer technicians can all be considered manual workers. And this failure to properly categorize employees is costing individual businesses in New York State millions of dollars.
Under that law, manual workers must be paid weekly. However, many employers unwittingly paid their employees every two weeks, which is the standard payment period in every other state, and even for New York state and local government workers. Due to the vague and complex process of determining whether an employee is a manual worker, it made sense that for decades the Department of Labor would enforce this 1890s-era requirement through a modest fine.
However, in 2019, a court in New York City inexplicably determined that an employer that paid their “manual” workers biweekly, rather than weekly, was committing “wage theft.” What followed is the reason New York’s business climate is often ranked near the bottom nationally – lawyers began filing and winning multi-million-dollar lawsuits simply because an employer paid their employees every two weeks.
The reason this became so lucrative to the trial lawyers is that, even though the employees were already paid every cent owed, “wage theft” penalties entitle the plaintiffs to recover liquidated damages, prejudgment interest, and attorneys’ fees. The liquidated damages are often millions of dollars because they are 50 percent of each worker’s wages going back up to 6 years. A shocking penalty for a business owner who simply paid their workers biweekly rather than weekly.
Lawyers filing these multi-million-dollar lawsuits claim that corporate giants are deliberately withholding pay from people who can’t wait to be paid every two weeks. This is extremely misleading and harmful to New York’s business environment.
In fact, only the so-called “corporate giants” have access to waivers from the weekly pay requirement. Labor law allows employers with 1,000 employees or more to be exempt from the weekly pay requirement, and many such large employers have long relied on this exemption due to their payroll systems being national in scope.
There is no such waiver, however, for the mom-and-pop shops and family businesses.
This is another example of New York State creating an absurdity, and a cottage industry for attorneys out of what was once a practical law to ensure prompt payment of weekly and daily wages to 1890s-era workers who lacked basic labor protections, including a minimum wage. New York must immediately enact a commonsense law to stop these lawsuits based on an antiquated law that harms New York’s ability to attract and retain jobs in an increasingly onerous business environment.
Justin Wilcox is the Executive Director of Upstate United.