NY Manual Worker Pay-Delay Suits Spike After a Century on Books

For nearly 130 years, New York courts rarely saw litigation over a state law outlining how often employers should pay manual laborers. Then an appellate panel told workers they can sue and the floodgates opened.

New York requires employers to pay people who perform such labor weekly, instead of using the two-week pay period common for many jobs. But it wasn’t until an intermediate-level appellate court decision in Vega v. CM & Associates Construction Management LLC, released just over four years ago, that workers realized they had the right to enforce the law themselves rather than rely on the state to do it.

So far, they’ve sued hundreds of companies including Apple Inc., clothing chain Zara, and craft store Jo-Ann. The judges in those three particular cases—all filed in federal courts in New York—have refused to dismiss the claims and said they’re following the private-right-of-action outcome in Vega because New York’s top court has yet to weigh in on the issue.

The cases are still making their way through the court system.

Attorneys on both sides of the employee-employer divide credited that 2019 opinion in Vega v. CM & Associates with the increase in suits claiming companies failed to pay manual workers on time under New York Labor Law Section 191(1)(a).

Vega, issued by the Supreme Court of New York, Appellate Division-First Department, “clarified that workers have the private right to join together and object to untimely pay,” Michael C. Danna, an Outten & Golden LLP associate who works on pay-delay cases, told Bloomberg Law.

Workers filed “only a handful of cases” involving the law between 1890 and 2019, but since Vega, they’ve lodged more than 400 suits claiming they weren’t paid on time, Deborah White, president of the Retail Litigation Center, told Bloomberg Law.

“You can see that the numbers tell the story,” White said.

Who’s a Manual Worker?

Under New York labor law, mechanics, workingmen, and laborers all count as manual workers. The state’s Labor Department has interpreted the manual worker pay frequency statute as covering those who spend more than a quarter of their work hours performing physical labor.

That “broad definition” and a “lack of meaningful guidance” is part of what’s spurred litigation in the wake of Vega, Howard M. Wexler, a Seyfarth Shaw LLP partner who represents employers, told Bloomberg Law. Now there’s “class action litigation seeking damages for untimely wages on behalf of purported manual workers in the form of hundreds, if not thousands,” of filed or threatened cases, he added.

There’s “little doubt” that the term encompasses people who perform hourly work in industries ranging from retail to restaurants to warehouses, Danna, who represents workers, said. Those jobs often involve physical tasks such as stocking products, organizing merchandise, and cleaning the workplace.

But workers have to make the case that they meet the 25% manual labor threshold, as a Manhattan federal judge noted in temporarily tossing a pay-delay suit against cosmetics retailer Bluemercury. The sales associate in that suit has since filed an amended complaint.

Big-Employer Exemptions

Some companies have seen the post-Vega case numbers and voluntarily switched to a weekly pay schedule, Danna said.

The cost of such a move is “little or nothing,” Brian S. Schaffer, a Fitapelli & Schaffer LLP partner, told Bloomberg Law. Schaffer, who represents workers in pay-delay suits against companies such as the Lowe’s home improvement chain and Zara, estimated that the changes could affect thousands of New York workers.

But companies that meet certain requirements for size—at least 1,000 workers—and length of time doing business in the state can also ask the state’s labor agency for an exemption to the weekly-pay requirement. Exemptions are “routinely granted to financially stable businesses,” the Retail Litigation Center’s White said.

More than 100 companies have received an exemption since 2019, Schaffer said. They were “always free to obtain the exemption,” but many “outright flouted” the pay frequency law before Vega, he added.

One company that’s long properly used the exemption is Lowe’s. Wexler led a team that convinced a federal judge to grant the home improvement chain summary judgment in a pay-delay case because it’s held that exemption since 1999, two decades ahead of Vega‘s release.

Other State Litigation

But Vega‘s reign as the only on-point state court decision won’t last forever. A different quadrant of New York’s intermediate appellate court is set to rule on the pay-delay issue in Grant v. Global Aircraft Dispatch Inc. after hearing oral argument earlier this year.

“If that state court rules that there is no private right of action, the federal courts would not feel the same compunction to follow Vega,” White said.

Her organization led a coalition of retail and restaurant industry groups in filing a proposed amicus brief, making that argument in support of Global Aircraft Dispatch. The Grant court declined to accept amicus briefs in an Oct. 17 order.

But at least one federal judge has already cautioned that an opposite outcome in Grant wouldn’t necessarily foreclose workers’ pay-delay claims, Danna said.

The employer’s win would merely present federal courts with “conflicting guidance as to how to project the likely determination” of New York’s highest court, Chief Judge Laura Taylor Swain of the US District Court for the Southern District of New York said in May.