Just when you thought the job market might be starting to get back to normal after COVID they throw another wrench at you. This is happening in New York City, though the effect could impact the entire state. The tale involves a woman named Irma Vega, a construction worker in the Bronx. She had lost her job, but her attorney came up with a “clever” way to cash in on the situation. Like most workers, Vega had been paid every two weeks, but New York has had a law on the books dating back to 1890 declaring that “a manual worker shall be paid weekly.”   It applies to manufacturing, mining or quarrying, lumbering, and mercantile workers, but the law defined such employment as anyone who was earning less than $900 a week and who does “physical labor.” That applies to any job where the worker is standing up more than 25% of the time.

Vega’s lawyer convinced a court that by paying his client every two weeks, one-half of her checks had been “late.” The court somehow agreed and awarded her 100% damages for each “late” check, equal to one-half of the pay she had received for the entire time she had worked there. You can see where this is going. (NY Post)

In 2018, though, a construction worker named Irma Vega won a judgment against a New York firm, CM & Associates. A Bronx civil court found that CM, in paying her every other week, had violated the law. In 2019, an appeals court upheld the ruling.

But the novel aspect of the Vega ruling was that the New York court reinterpreted the consequences of not following the law in an entirely new way.

The court found that Vega could recoup as “damages” a dollar value equal to 100% of the wages paid late.

This is simply nuts. The wording of the law specifies that it is meant as protection against employers who make bad faith underpayments. The plaintiff in this case was paid for every hour she worked on the same schedule as the rest of the employees.  The wording of the law also provides a reason workers back in the late 19th century might have needed protection. Some employers would hold off on paying workers and then simply close up shop and “disappear.”

The law has a six-year statute of limitations. The upshot of all of this is that every employer in the state who pays their employees who do physical labor every two weeks could be on the hook for up to one-half of any worker’s salary for six years. You might be thinking, ‘no way. Nobody would do anything that shady.’

You would, of course, be wrong. Multiple attorneys who smell blood in the water have filed class action suits and are still signing up new plaintiffs. The original case is under appeal and this might still be turned around by a higher court. But this is New York we’re talking about. Never assume that common sense will prevail in any given situation.

Another remedy would be to have the legislature pass a bill amending the law to further clarify that workers who wind up receiving their pay in a routine, timely fashion have not experienced any damages and would not qualify. Such a bill has been filed in the Assembly, but no action on it has been taken and there is no companion bill in the state Senate.  This is one of the wildest legal stories I’ve seen in a while and it may drag on for some time to come.