BILL NUMBER: S4473
SPONSOR: RAMOS
 
TITLE OF BILL:
An act to amend the labor law, in relation to liquidated damages for
labor law violations
 
PURPOSE:
To align the rights of plaintiffs in state court with those in federal
court, where class action plaintiffs can claim liquidated and statutory
damages for certain wage violations.
 
SUMMARY OF PROVISIONS:
Section 1 would provide the title of the act. "Labor Law Enforcement
Parity Act."
Section 2 would provide the legislative intent.
Section 3 amends the labor law by Subdivision 3 of section 198, permit-
ting plaintiffs in state court to recover statutory and liquidated
damages in wage theft class actions.
Section 4 amends the labor law by Subdivision 1 of section 663, author-
izing plaintiffs in class actions to recover statutory damages in state
court
Section 5. This act shall take effect immediately and shall apply to all
actions concerning labor law violations that occurred within the six
years prior to this act's effective date.
 
JUSTIFICATION:
The Legislature has recently made efforts to enhance the Labor Law's
protections against wage theft. However, a lesser-known section of the
Civil Practice Law and Rules has been a barrier for many workers seeking
to recover unpaid wages, liquidated damages, and statutory damages under
the Labor Law on a class-wide basis. The Labor Law Enforcement Parity
Act (LLEPA) aims to align the rights of plaintiffs in state court with
those in federal court, where class action plaintiffs can claim liqui-
dated and statutory damages. Several New York state courts have ruled
that class action plaintiffs enforcing the Labor Law in state courts are
not entitled to liquidated damages (which are awarded in individual
actions as amounts equal to unpaid wages) due to a restriction in CPLR §
901(h) against recovering "penalties" in class actions. See, e.g.,
Divlijanovic v. Saks & Co., 201$ N.Y. Slip Op. 30236, at *12-13 (N.Y.
Sup. Ct. 2018). This stance persists despite recognition by numerous
federal and state courts that recent amendments to the Labor Law made
liquidated damages compensatory rather than penal. For instance, Rana.
v. Islam. 887 F.3d 118, 123 (2d Cir. 2018), and Vega v. CM & Assocs.
Constr. Mgmt., LLC, 175 A.D.3d 1144, 1146 (1st Dept( 2 019) acknowledged
the amendments aimed to align with the Fair Labor Standards Act (LISA).
emphasizing compensation over deterrence. However, some courts, like
in. Divlijanovic and Griffin v. Gregorys Coffee Mgmt. LLC, 2019 N.Y.
Slip Op. 31125 (N.Y. Sup. Ct. 2019), have overlooked the legislative
intent to categorize liquidated damages under the Labor Law as compensa-
tory. Moreover, class-wide claims for statutory damages under the Wage
Theft Prevention Act have been disallowed by New York State courts based
on their interpretation of CPLR 901(b). which limits class-wide claims
involving statutory minimum recoveries. This interpretation forces work-
ers pursuing class actions in state court to forgo their right to liqui-
dated damages, effectively losing up to 50% of the damages they are
owed. Additionally, it prevents them from making any class-wide claims
for violations of the Wage Theft Prevention Act. Conversely, in federal
court, such actions allow for the recovery of these damages on a class-
wide basis, as seen in Shady Grove Orthopedic Assocs., P.A. v. Allstate
Ins. Co., 559 U.S. 393. 413 (2010) and Vargas v. Howard, 324 F.R.D. 319
(S.D.N.Y. 2018).
The frequent inability to pursue Labor Law claims in federal court
(because there is no basis for federal jurisdiction, such as a federal
claim or diversity of citizenship) leaves workers without an effective
means to recover liquidated damages for wage theft violations and statu-
tory damages for Wage Theft Prevention Act violations. This is partic-
ularly harmful to low-wage workers and workers with smaller claims, for
whom individual suits are unfeasible and class actions are critical in
allowing them to vindicate their rights. LLEPA's amendment to Sections
198 and 663 of the Labor Law will give state court plaintiffs seeking
class-wide relief the same rights as those in federal court to seek
liquidated and statutory damages, thus ensuring that the Labor Law is
enforced equally in state and federal courts.
 
LEGISLATIVE HISTORY:
2024: S.8852 - Referred to Labor
 
FISCAL IMPACT:
To Be Determined.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all actions
concerning labor law violations that occurred within the six years prior
to this act's effective date.

Statutes affected:
S4473: 198 labor law, 198(3) labor law, 663 labor law, 663(1) labor law