Client Alert

New York Second Department Court Holds Manual Workers Do Not Have a Private Cause of Action in Frequency of Pay Claims

On January 17, 2024, the Appellate Division of the New York Supreme Court for the Second Department held that a private right of action under New York Labor Law 198(1-a) does not apply to frequency of payment claims under Section 191.
 
In Grant v. Global Aircraft Dispatch, Inc., 2024 N.Y. App. Div. LEXIS 180, the question before the Second Department court was whether Labor Law § 198(1-a) expressly provides a private right of action for a manual worker paid on a biweekly basis in violation of Labor Law § 191(1)(a) to recover liquidated damages, interest, and attorneys’ fees.  The court found that the plain language of Labor Law § 198(1-a) supports the conclusion that this statute addresses nonpayment and underpayment of wages, and not frequency of payment.  The court held that payment of full wages on the regular biweekly payday does not constitute nonpayment or underpayment.
 
This decision is significant because in 2019, the Appellate Division of the New York Supreme Court for the First Department, held that New York employers may be liable for liquidated damages for violating the “Frequency of Pay” requirements under New York State law. Vega v. CM & Assoc. Constr. Mgt., LLC, 175 A.D.3d 1144, 107 N.Y.S.3d 286 (1st Dept. 2019).
 
Specifically, in the Vega decision, the court held that “manual workers” who receive full pay but are paid “late” (on a biweekly or later basis) in violation of the frequency of payment provision of the New York State Labor Law (“NYLL”) have a private cause of action and can recover liquidated damages. The First Department determined that such a private right of action exists, concluding that the “wage claim[s]” to which section 198 refers include not only instances of nonpayment or partial payment of wages, but also late payment of wages (see Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1145- 1146).
 
The Second Department court disagreed with the First Department’s holding in Vega, which creates a split between the appellate departments over whether a private cause of action exists under the law. Therefore, cases located in the Second Department (cases emanating from the superior courts located in the counties of Dutchess, Brooklyn, Nassau, Orange, Putnam, Queens, Staten Island, Rockland Suffolk, and Westchester) will now be required to follow the holding in Grant. Trial courts within the First Department (in Manhattan and the Bronx) will continue to follow the Vega decision. 
 
It is likely that this issue could be appealed to the New York Court of Appeals for an ultimate decision on whether a private cause of action exists in frequency of pay cases. We will continue to monitor any developments that may arise and will keep you apprised of same.  Should you have any questions regarding this decision and/or how it may affect your business, please contact Ali Law Group.

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