Approved New York State Budget Limits Damages for Late Payment of Earnings
As a part of the bill approving the 2025-2026 New York state budget, legislators have amended the state’s labor law to limit the amount of damages a worker may be entitled to if not paid in a timely manner. The statute permanently amends Section 198 of the New York Labor Law by establishing a cap on the damages a worker may recover if his or her employer within the period required by law, limiting the total amount of damages to 0.3% of all wages paid late.
The legislative interest in amending the law came in the aftermath of a New York state appellate court opinion that gave employees a private right to sue their employers for damages when their employers violate Section 191(1)(a) of the New York Labor Law, which requires that anyone who works as a “manual” worker must be paid any wages no later than seven days after the work is performed. The decision, Vega v. CM & Associates Construction Management, LLC, led to extensive litigation by workers, with potential damages of 50% of late wages for a period of up to six years.
Under the provisions set forth in the budget bill, Section U, the potential recovery is now limited to “no more than 100 % of the lost interest found to be due.” That amount is currently set at 0.3% per week. The damage limitations set forth in the statute went into effect immediately when the budget went into effect on May 9, 2025.
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At the Romero Law Group, PLLC, we handle a wide range of legal issues for employees in Westchester County, Rockland County and Orange County in New York; and across Northern New Jersey. We offer a free initial consultation to any employee with a potential employment law dispute. To schedule an appointment, contact our offices online or call us at (631) 257-5588.