Federal Court Affirms Constitutionality Of New York Labor Law Amendment Limiting Liquidated Damages

In a July 18, 2025 article, we discussed an amendment to New York Labor Law (NYLL) §191 (now codified at NYLL §191(1)(a)) that eliminated liquidated damages in cases involving the late payment of wages for manual workers if certain conditions are met. These conditions are that the employer must not have been previously found to have violated the law, and that the employees were paid at least semi-monthly. The amendment expressly states that it applies retroactively to cases pending at the time of the amendment.

In the first case we are aware of to address these issues, a federal court has now held that the amendment comports with the New York State Constitution and applies retroactively to bar claims under §191(1) where the above conditions have been satisfied. Bryant, et al., v. Buffalo Exchange, Ltd., Slip Copy, 2026 WL 1240054 (S.D.N.Y. May 6, 2026) (Subramanian, J.).

Damages Available to an Employee Under NYLL §191

To recap the controversy, assume a New York employee who qualifies as a “manual laborer” under the NYLL is regularly paid every two weeks. §191 requires that manual laborers be paid weekly. Perhaps unaware of this requirement, or perhaps in disagreement that a particular employee or class of employees is, in fact, manual laborer(s), an employer regularly pays every two weeks. Under the amended §191(1) (a), the employee(s) may sue for the (alleged) late payment of their wages. But, what damages are available?

Bryant answers this question. First, our hypothetical employee is entitled to their actual damages, which would appear to be the time-value of the wages that were not paid within the time required by §191 (for example, interest), plus their reasonable attorney’s fees. But if the employer is not a “repeat offender”—i.e., has not been previously found to have violated NYLL §191—and regularly paid the employee at least semi-monthly, then liquidated damages are not available. Bryant, 2026 WL 1240054 at *1.

The elimination of liquidated damages can be economically significant. Liquidated damages under the NYLL are 100% of economic damages. NYLL §198(1-a). Assume, for example, that our employee earned $800/week ($20/hour x 40 hours/week) and was paid every other week. In a four-week cycle, the employee was therefore paid late twice, resulting in liquidated damages of $1,600, a far greater amount than the time value of the $1,600 for the (aggregate) two weeks during which the employee did not have possession of their wages.

Bryant Rejects Constitutional Challenges to the Amendment

The Bryant court rejected several arguments that the amendment violates the New York State Constitution. The court found that the amendment was properly enacted, disagreeing with the plaintiffs’ argument to the contrary. The court also rejected the plaintiffs’ argument that the amendment exceeded the governor’s powers under Sections 2 and 3 of the New York Constitution. Bryant, 2026 WL 1240054 at *1.

The court also rejected the plaintiffs’ argument that the retroactivity of the amendment violates the Due Process clause of the New York Constitution. Plaintiffs had relied on a decision of the New York Court of Appeals, Regina Metro. Co., LLC v. New York State Div. of Hous. & Cmty. Renewal, 35 N.Y.3d 332 (2020) (per curiam), that struck down the retroactivity provisions of a statute imposing stiffer penalties on landlords who overcharge tenants because, as Judge Subramanian put it, “the New York Court of Appeals held that a portion of the law that gave rise to massive damages for lease contracts that might have expired decades earlier constituted a due process violation.” Bryant, 2026 WL 1240054 at *4 (citing Regina, 35 N.Y.3d at 382-83).

Regina explained that a statute cannot impair “vested rights” and that “the retroactive nature of the legislation [must be] ‘supported by a rational basis commensurate with the degree of retroactive effect.’” Bryant, 2026 WL 1240054 at *5 (citing, inter alia, Regina, 35 N.Y.3d at 38283). Distinguishing Regina, Judge Subramanian explained that the amendment to NYLL §191 does not eliminate any right at all (much less a “vested” right), merely a particular remedy (liquidated damages).

Further, Subramanian found a rational basis commensurate with the degree of retroactive effect, noting that the degree of retroactivity of the amendment is much less than was present in Regina. The statute in Regina “created significant liability for lease contracts that had expired decades earlier—potentially turning a case with damages of approximately $10,000 to one with more than $285,000.”Bryant, 2026 WL 1240054 at *5.

Here, the amendment only affected cases that both fall within the NYLL statute of limitations and where the action is not yet final. Bryant, 2026 WL 1240054 at *5. Finally, the judicial recognition of a right to liquidated damages in this context was first recognized in 2019 in the First Department’s Vega decision, but with the Second Department coming to “the opposite conclusion” a few years later in Grant. Bryant, 2026 WL 1240054 at *5. For all of these reasons, “any retroactive effect is muted.” Bryant, 2026 WL 1240054 at *5.

Conclusion

Bryant confirms what seemed clear from the face of the amendment: that NYLL §191, as amended, now prohibits the imposition of liquidated damages on an employer who is not a repeat offender and who regularly paid its employees at least semi-monthly. Bryant rejected several challenges to the amendment under the New York State Constitution.

Originally published by New York Law Journal.

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