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Over Dissent, Second Department Sets Up Split Over Frequency-of-Payment Suits

New York Labor Law § 191 provides that most "manual worker[s]" must be paid weekly. In Vega v. CM & Assoc. Constr. Mgmt., LLC, 175 A.D.3d 1144 (2019), the First Department held that a manual worker who is not paid weekly is entitled to liquidated damages. The First Department reasoned that the statute, like the federal Fair Labor Standards Act, "provides a liquidated damages remedy for the 'failure to pay the statutory minimum on time.'" Id. (quoting Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 707 (1945)). Even if the employer pays all wages due eventually, an employee paid biweekly when they are entitled to be paid weekly is, in effect, being paid half their wages one week late -- every single paycheck.


Vega set off a cascade of litigation in New York based on employers' failure to pay wages weekly. In some cases, there might have been a genuine dispute as to whether the workers were "manual workers" protected by the statute; in others, employers had no doubt simply ignored a statute that had been laxly enforced, if at all, assuming they would never be held to account. Much of this litigation is ongoing.


In Grant v. Global Aircraft Dispatch, 2024 NY Slip Op 00183 (Jan. 17, 2024), the Second Department "disagree[d] with the reasoning of Vega and decline[d] to follow it," setting up a clear departmental split that may be headed to the Court of Appeals. The Second Department expressly held that "Labor Law § 198 does not expressly provide for a private right of action to recover liquidated damages, prejudgment interest, and attorneys' fees where a manual worker is paid all of his or her wages biweekly, rather than weekly, in violation of Labor Law § 191(1)(a)."


What happens when there's a split this clear? New York practitioners will be familiar with the "general rule... that, in the absence of a relevant decision in its own Department, inferior courts are bound to follow applicable decisions in another Department of the Appellate Division.” Daniel v. Mvaic, 181 Misc.2d 941, 952 (Civ. Ct. Bx. Cty. 1999) (citing Mountain View Coach Lines v. Storms, 102 A.D.2d 663, 664 (2d Dep’t 1984)). But “where [as here] the Court of Appeals has not spoken and there is no applicable Appellate Division decision in its own Department, conflicting decisions in the other Departments are not binding on an inferior court," as there is no basis for the court to choose which such decision it must follow. Id. (emphasis added). "[I]t is then free to fashion a decision which it deems to be appropriate and consistent with the overall objectives sought to be achieved by the applicable statute.” Id.


The Second Department's decision is plainly wrong and seriously harms the low-wage manual workers the statute was meant to protect. Until the Court of Appeals resolves the split, practitioners in the Third and Fourth Departments should be prepared to explain why courts should follow Vega rather than Grant.

One of Grant's several legal failings is apparent in the following paragraph:


The First Department's reasoning that the "moment an employer fails to pay wages in compliance with section 191(1)(a), the employer pays less than what is required" (Vega v CM & Assoc. Constr. Mgt., LLC, 175 AD3d at 1145), seems to be based upon the premise that a payment was due after the first week of the biweekly pay period and that the employer therefore failed to pay the wages due after that first week. However, where an employer uses a regular biweekly pay schedule, that employer's payment of wages is due, under the employment agreement between the employer and an employee, every two weeks. Such an agreed-upon pay schedule between an employer and a manual worker violates the frequency of payments requirement (see Labor Law § 191[2]), but is not equivalent, in our view, with a nonpayment or underpayment of wages subject to collection with an additional assessment of liquidated damages.


Simply put, the Second Department held that even though the statutory language of Labor Law § 191 is unambiguous -- "[a] manual worker shall be paid weekly and not later than seven calendar days after the end of the week in which the wages are earned" -- the parties can privately contract to "violate[] the frequency of payment requirement" and make wages "due" less often than the law says. That is inconsistent with the whole scheme of minimum-standards employment legislation, which is supposed to protect workers from unfair terms and conditions of employment precisely by invalidating certain contracts that substantively violate the law. For example, the parties could certainly "agree" that the employee would earn $1 an hour -- but the minimum wage would still be "due" on the regular payday for each and every hour worked. See Labor Law § 198(1-a).


The First Department had it right. The plain text of the statute tells us when the wages are "due": "not later than seven days after the end of the week in which the wages are earned." The statute means what it says. The First Department was correct that if the wages remain unpaid after that time, they are late, and the employer has "pa[id] less than what is required." In contrast, the Second Department cited no authority for its view that wages are "due" on the regular payday even when the regular payday is admittedly inconsistent with a statute requiring more frequent payment.


Unfortunately, other courts now have authority for that view in Grant. Until the Court of Appeals ultimately sets things straight, the employee-side bar should familiarize itself with Grant and Grant's failings, in an effort to ensure the Third and Fourth Departments uphold the law as correctly stated in Vega.


Burdick Law PLLC works to stay abreast of the rapidly evolving case law and statutory law governing employment relationships in New York State. If you need advice or representation concerning your rights as a working person in New York, send us a message using the "Contact" button at the top of your screen, or by emailing ben@burdick.law.

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