Attorneys have noticed a growing trend of employees suing their employers over late wages under New York labor law.
A New York State appellate court decision clarified that manual workers can sue companies over late wages, even if the wages have been fully paid.
Manual workers must be paid on a weekly basis, not biweekly. The key element is knowing who should be considered a manual worker, not an administrative employee.
“There are shades of gray,” said Alex Granovsky, a lawyer with Granovsky & Sundaresh in New York City. “If you want to be the safest, err on the side of being conservative,” meaning lean toward classifying people as manual laborers.
“Compared to the liability, it seems like a small price to pay,” he added. “The exposure is high, and it’s a funky little law that a lot of business owners don’t know about. … It’s an area where the liability and the standards against an employer are pretty strict.”
Employers that violate the pay frequency law must pay the full amount of delayed wages, plus attorney fees and interest. Paying liquidated damages (an estimate of losses to the plaintiff) is mandatory even if the manual workers were paid in full the following week, explained Kathryn Barcroft, a lawyer with Bleakley Platt & Schmidt in White Plains, N.Y.
“The extent of liability in actions brought by employees is unsettled and is being actively litigated,” said Stephanie Schuster, an attorney with Morgan Lewis in Washington, D.C.
Private-sector employers are covered under this rule, but federal, state and local government employers are not. Charter schools, private schools and not-for-profit corporations are subject to the rule.
“Certain large employers may apply to the New York State Department of Labor for an exemption” to the rule, Schuster said. To be eligible for the exemption, an employer must have an average of 1,000 or more employees in New York during the last three years, or an average of 1,000 or more employees in New York during the last year and an average of 3,000 or more employees outside New York during the last three years.
Business groups recently filed an amicus brief in the case, arguing that the liquidated damages are excessive and wrong.
Defining Manual Worker
To correctly determine whether your employees are manual laborers, you need to recognize what their daily tasks are, not rely on what the written job description or job title implies.
The state defines a manual worker as a mechanic, workingman or laborer who spends more than 25 percent of working time engaged in physical labor. “Common tasks classified as physical labor include heavy lifting, stocking shelves, unpacking boxes and bagging purchases, cleaning, and standing and walking for long periods of time,” Barcroft explained.
The pay frequency rule does not apply to individuals working in an executive, administrative or professional capacity and earning more than $900 a week.
“In order to qualify as a bona fide administrative employee, the employee’s primary duty must consist of the performance of office or nonmanual fieldwork, directly related to management policies or general operations, and the employee must customarily and regularly exercise discretion and independent judgment,” Barcroft said.
Sometimes workloads change and tasks are reassigned as needed, so keeping up-to-date on what individuals are actually doing is important. Payroll procedures may need to be adjusted when someone starts handling more manual tasks.
“It’s the real work on the ground that matters. If that person spends their day sweeping floors, that person is a manual worker,” Granovsky agreed. “It’s a matter of being very realistic about what your employees are actually doing, not what the job description or title is.”
In some cases, an employee considered exempt for overtime purposes could still qualify as a manual laborer under the pay frequency law.
“Courts and the New York Department of Labor are likely to continue to interpret the definition of manual worker broadly in view of Department of Labor opinion letters regarding this subject matter,” Barcroft noted.