Jeff Ruzal Featured in “W&H Expert Says Future of NY Manual Worker Claims Unclear”

Jeffrey (Jeff) H. Ruzal, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was featured in Law360 Employment Authority, in “W&H Expert Says Future of NY Manual Worker Claims Unclear,” by Daniela Porat. (Read the full version – subscription required.)

Following is an excerpt:

Jeff Ruzal, a former U.S. Department of Labor attorney, said the recent amendment to New York's Labor Law reducing the steep liability for frequency-of-pay claims is welcome reform for the state's employers, but the change is narrow and questions remain about key threshold issues. …

Ruzal, who is a member of management-side firm Epstein Becker & Green PC, said frequency-of-pay claims may remain a fixture, but the plaintiffs' bar will likely focus less on such claims thanks to this amendment.

"I'd like to believe that based on the amendment, it spells the sun setting of these claims at least perhaps on a class-wide basis with the, no pun intended, amount of frequency that we've been seeing them," he said. "I don't think it's the end of frequency-of-pay actions. I just think that the plaintiffs bar is probably not going to focus on it as much as they had been."

Here Law360 speaks with Ruzal, an expert in New York wage and hour law, about the future of frequency-of-pay claims. …

Why is this amendment to New York Labor Law on frequency-of-pay significant?

The reason this amendment is so significant is because the measure of damages that were available in private actions for frequency-of pay-violations — which is to say payment of wages later than seven days from the date upon which a manual worker had earned them — was severe as defined by up to 100% liquidated damages equal to the amount that had been paid late.

When you multiply that by the number of individuals in one's workforce who are manual and you further multiply that by a six-year statute of limitations, which is what's available pursuant to the New York labor Law, it provides for a very substantial amount in damages for what effectively were wages that were fully paid.

The amendment has changed it so that it becomes rather than liquidated damages an interest-based penalty for violating 191 for first violations as of the date of the amendment.

So that to the extent that any amount was paid late, there would still be a penalty available pursuant to this amendment, however, instead of 100% of the value of each wage that was paid late, it becomes the daily interest multiplied by the number of days that it was late, which would be a fraction of what the liquidated damages award would have provided in the past. ... 

What other open questions remain on the frequency-of-pay issue following this amendment?

Another interesting point to raise is that there really have not been many findings of fact with respect

to which classifications of different job positions in different industries actually are 'manual.'

"Manual worker" is defined very broadly by the [New York Department of Labor] as any worker engaged in physical labor for at least 25% of the time. But it's not further defined than that.

There's been no finding that I'm aware of that any employee is a manual worker in big box retail or any other industry as a matter of per se, or as a matter of fact, and while there's been some decisional case law by [the New York State Industrial Board of Appeals] or DOL opinions as to who in the past specifically is constituted a manual worker here or there, it's very sparse.

One could argue as a threshold matter, these lawsuits should never have even been brought against the various industry specific employers in the first place.

These windfall settlements that occurred in the wake of Vega should never have even happened, but because of a dearth of guidance and precedent with respect to which industries and occupations fall within the definition of manual laborer, it resulted in a lot of early settlements before the issue was tested in court.

Perhaps testing it on that threshold question now where the stakes are significantly less or lower, it might foreclose litigation completely with respect to certain industries. The stakes might still be too high, even if it is only interest for a first-time violation.

But it still remains an open question.