Quick Hits

• The 2025–26 New York state budget includes significant amendments to the New York Labor Law, impacting wage-and-hour enforcement, liquidated damages, and child labor penalties.
• The amendments bring long-awaited clarity to New York pay frequency claims, including interest-only damages for a first violation.
• The amendments grant the New York State Department of Labor (NYSDOL) enhanced enforcement powers, including the ability to impose a 15 percent surcharge on unsatisfied wage judgments and allow employees to enforce wage orders directly.
• The budget also mandates a comprehensive overhaul of minor employment certification and recordkeeping, centralizing the process under the NYSDOL, effective May 9, 2027.

The amendments to the NYLL are now law, effective immediately, and apply to pending and future actions unless otherwise specified. The legislation significantly recalibrates wage-and-hour enforcement, modifies liquidated damages, expands enforcement powers, and increases penalties for child labor violations. Moreover, the legislation overhauls employment certification and recordkeeping for minors, though these changes take effect in two years (on May 9, 2027).

The NYLL was modified to expressly acknowledge a private right of action for violations of NYLL § 191(1)(a)—which requires employers to pay “manual workers” on a weekly basis. The Labor Law has also been amended to narrow the potential liquidated damages exposure that currently accompanies the requirement that “manual workers” be paid on a weekly basis—a hot-button issue that has spawned a wave of class action litigation against employers who pay “manual workers” on a biweekly basis rather than every week.

The NYLL was also amended to dramatically expand the New York State Department of Labor’s (NYSDOL) enforcement toolkit by giving the labor commissioner “quasi-sheriff” powers, authorizing the NYSDOL to impose an additional 15 percent penalty on unsatisfied wage judgments, and—most notably—allowing employees themselves to step into the shoes of the labor commissioner to docket and execute collection action on wage orders directly. The amendments also include significant increases to civil penalties for child labor violations.

Finally, the budget includes a comprehensive overhaul of the minor employment certification process. Under the new provisions of the NYLL, minor employment certifications will be centralized under the NYSDOL, which must develop and implement a new electronic database system for child labor certification. While this major overhaul was long overdue, it will become effective in two years (May 9, 2027).

Modifications to NYLL § 198(1-a)

NYLL § 198(1-a) now provides the following:

• Liquidated damages for most underpayment violations remain capped at 100 percent of the total amount of wages found to be due, and up to 300 percent for willful violations of NYLL § 194 (requiring equal pay based on gender).
• For violations of the pay frequency requirement under NYLL § 191(1)(a) (requiring weekly wage payment to “manual workers”), where the employer paid wages on a regular payday at least semi-monthly:
  • For a first-time violation, if the employer had a good-faith basis for its pay practice, liquidated damages are limited to no more than 100 percent of the lost interest on the delayed wages (not the late wages themselves), calculated daily at the rate set by Banking Law § 14-a (currently 16 percent per annum).
  • For repeat violations (after a final, unappealed order for the same violation covering employees performing the same work), liquidated damages are 100 percent of the total amount of late wages found to be due (along with interest on that amount).

These changes are now in effect and apply to all pending and future cases.

Modifications to NYLL §§ 218–219 (Civil Penalties)

Modifications to §§ 218–219 of the NYLL include the following, and are now in effect and apply to future cases:

• The NYSDOL commissioner may file wage orders with the county clerk, which immediately become liens with a civil judgment’s full force and effect.
• The commissioner is authorized to add a 15 percent surcharge to any outstanding amount when filing a wage order.
• The commissioner has all the powers of a sheriff under Article 25 of the Civil Practice Law and Rules to levy and sell an employer’s assets, but without the customary marshal or sheriff fees.
• At an employee’s request, the commissioner must assign the wage, supplement, interest, and liquidated damages portion of the order to the employee, who may then docket and enforce the order personally, including levying property and garnishing bank accounts.
• These provisions also apply to wage supplement claims (e.g., vacation pay, expense reimbursement).

Increased Civil Penalties for Child Labor Violations (NYLL § 141)

The maximum civil penalties for violations of child labor laws have been significantly increased:

• Up to $10,000 for a first violation.
• $2,000–$25,000 for a second violation.
• $10,000–$55,000 for a third or subsequent violation.
• For violations involving serious injury or death of a minor, penalties range from $3,000–$30,000 for a first violation, $6,000–$75,000 for a second, and $30,000–$175,000 for a third or subsequent violation.

Overhaul of Minor Employment Certification and Recordkeeping

The budget agreement also includes the following changes to the state requirements for minor employment certification and recordkeeping:

• The NYSDOL, in consultation with the New York Department of Education, will create and maintain a confidential database for the employment of minors.
• Employers hiring minors under eighteen years of age will be required to register in the database, providing detailed information about the business and the minors employed.
• Employers will be required to file employment certificates or permits electronically or physically at the place of employment, accessible to authorized persons.
• Minors will be required to register in the database and update their employment certificate or permit for each employer.
• Employment certificates and permits will be issued electronically within the database.
• The labor commissioner, rather than school officials, will be responsible for issuing and revoking employment certificates and permits.
• Employers will be required to destroy any physical or electronic copies of a minor’s employment certificate upon termination of employment.
• Temporary service employers will be required to keep employment certificates on file and provide copies to each establishment where a minor is assigned.
• The modifications regarding minor employment incorporate necessary changes to the State Education Law (to remove responsibility for issuing employment certificates from local school officials).

These modifications will go into effect in two years (May 9, 2027).

Overview of the New York Labor Law Amendments

The wage-and-hour component of the budget legislation (found in Part U of the ELFA Bill) strikes a new balance between employer certainty and employee recoverability. By simultaneously softening damages for technical pay-frequency missteps and arming workers with streamlined collection mechanisms, lawmakers appear intent on reducing litigation volume while ensuring that bona fide wage theft is swiftly remedied.

Limiting Liquidated Damages for Frequency-of-Pay Violations

Under current law, an employer that pays manual workers on a biweekly basis—even where the correct amount is ultimately paid—may be liable for liquidated damages equal to 100 percent of the late-paid wages (plus 9 percent statutory interest and attorneys’ fees). The First Department’s 2019 decision in Vega v. CM & Associates Construction Management, LLC, upended many employers over a century-long belief that NYLL § 191(1)(a) did not provide for a private right of action, spurning enormous class-action litigation (and potential exposure) for what many employers view as a technical timing infraction. A competing decision issued in 2024 by New York’s Second Appellate Department in Grant v. Global Aircraft Dispatch, Inc., resulted in a split among the state’s appellate divisions, creating further uncertainty in this legal landscape. This judicial split has now been resolved, with the legislature clarifying that employees can assert a cause of action for violating NYLL § 191(1)(a).

The NYLL has also been modified as follows:

• Preserves the commissioner’s and courts’ ability to award up to 100 percent liquidated damages for most underpayment violations, and up to 300 percent for willful equal-pay violations; but
• Carves out frequency-of-pay cases where the employee was, in fact, paid on a regular payday on a semimonthly or faster cadence.
  • For a first-time violation, where the employer had a “good-faith basis” for believing its pay practice was lawful, liquidated damages would be limited to interest only, calculated daily at the rate established by Banking Law § 14-a 16 percent) per annum); and
  • Employers with a prior, final, and unappealed order for the same violation (covering employees who perform “the same work”) to 100 percent liquidated damages on the underlying wages for subsequent infractions.

By tethering first-offense damages to lost interest rather than duplicating principal wages, the law seeks to curtail outsized settlements in pay frequency cases while preserving meaningful deterrence for repeat violators. These changes went into effect on May 9, 2025, and apply to pending actions and any future litigated frequency-of-pay cases.

Expanding NYSDOL and Employee Enforcement Powers

The amendment to NYLL §§ 218-219 (found in Part V of the Education, Labor and Family Assistance (ELFA) Bill) allows the labor commissioner to repurpose long-standing tax-collection tools for wage enforcement, including the following.

• Automatic Judgment Liens. Once an order to comply is issued by the NYSDOL (or a final decision rendered by the Industrial Board of Appeals) and is docketed with a county clerk, it “shall have the full force and effect of a judgment.” The lien attaches immediately to the employer’s real and personal property.
• 15 percent) “Non-Payment” Surcharge. If the employer fails to satisfy the order to comply before filing, the labor commissioner may unilaterally increase the amount due by 15 percent).
• Sheriff-Style Levy Authority. Whether executed through county sheriffs or NYSDOL personnel, the labor commissioner may impose a levy on and sell an employer’s assets as if executing on a court judgment—without paying the customary marshal or sheriff fees.
• Mandatory Assignment to Employees. Upon request, the labor commissioner must assign to the employee “without consideration or liability” the order’s wage, supplement, interest, and liquidated-damages portion. The employee may docket and enforce the order personally, including levying property and garnishing bank accounts, all under the Civil Practice Law and Rules.
• Parallel Provisions for Unpaid Wage Supplements. Identical language appears in amended NYLL § 219, which governs wage-supplement claims (e.g., vacation pay, expense reimbursement).

In effect, these amendments reduce agency workload while incentivizing employers to resolve wage matters promptly.

Increased Civil Penalties for Child Labor Violations

The maximum civil penalties for violations of child labor laws have been significantly increased. For a first violation, the penalty is up to $10,000; for a second violation, $2,000–$25,000; and for a third or subsequent violation, $10,000–$55,000. Where a violation involves serious injury or death of a minor, penalties range from $3,000–$30,000 for a first violation, $6,000–$75,000 for a second, and $30,000–$175,000 for a third or subsequent violation.

Overhaul of Minor Employment Certification and Recordkeeping

The amendment to the provisions of the NYLL and State Education Law (found in Part X of the ELFA Bill) requires the NYSDOL, in consultation with the Department of Education, to create and maintain a confidential database for the employment of minors.

Employers hiring minors under eighteen years of age must register in the database, providing detailed information about the business and the minors employed. Employers must file employment certificates or permits electronically or physically at the place of employment, accessible to authorized persons. Minors must register in the database and update their employment certificate or permit for each employer. Employment certificates and permits are now issued electronically within the database.

Rather than school officials, the labor commissioner will become responsible for issuing and revoking employment certificates and permits. Employers must destroy any physical or electronic copies of a minor’s employment certificate upon termination of employment. Temporary service employers must keep employment certificates on file and provide copies to each establishment where a minor is assigned.

Several sections of the Education Law relating to minor employment certification, procedures, and recordkeeping have been repealed or amended to align with the new NYLL requirements, since the process for issuing, revoking, and maintaining employment certificates will be centralized under the NYSDOL. These changes to the employment of minors will go into effect in two years (on May 9, 2027).

Practical Impact on Employers 

These profound modifications to the NYLL create a two-tiered enforcement climate:

• Reduced Class-Action Leverage in Pay Frequency Cases. Plaintiffs’ counsel may find it less lucrative to pursue frequency-of-pay class actions now that the maximum liquidated-damages exposure is limited to interest for first-time violators; however, willful or repeat offenders would be liable for 100 percent of liquidated damages and will no longer be able to rely on the current uncertainty in the law to leverage better settlements.
• Recordkeeping and Good-Faith Defense. Demonstrating a “good-faith basis” will be critical to avoid wage-doubling damages in first-time pay frequency cases. Employers may want to document reliance on agency guidance, legal opinions, or industry practice.
• Strategic Settlement Considerations. Once the NYSDOL issues an order, the prospect of a swift, judgment-like lien may tilt settlement negotiations in the employee’s favor, encouraging earlier resolution.
• Heightened Collection Risk on Substantive Wage Claims. Employers that ignore NYSDOL orders could face accelerated enforcement, immediate liens, and asset levies initiated either by the commissioner or directly by employees, now sweetened by a 15 percent) surcharge.
• New Requirements for Employment of Minors. Once these changes go into effect on May 9, 2027, employers of minors must register with the NYSDOL’s database and comply with the new electronic recordkeeping and certification requirements.

Next Steps

Employers may want to consider the following steps:

• Auditing Pay Frequencies. Employers—particularly those with “manual worker” populations—may want to confirm that pay schedules comply with the requirements set forth in NYLL § 191.
• Preparing for Enhanced Post-Order Collection. Consider reviewing asset-protection strategies and ensure prompt payment procedures for NYSDOL orders to avoid the 15 percent surcharge and immediate liens.
• Updating Wage and Hour Policies. Consider incorporating the proposed damages framework into internal compliance manuals and manager training, emphasizing the continuing risks for willful or repeat violations.

The enactment of the 2025–26 state budget represents a sweeping overhaul of New York’s wage and hour laws, enforcement mechanisms, and minor employment regulations. Most changes are already in effect and apply to pending and future matters.