New York has a $237 billion state budget, three weeks behind schedule.
Lawmakers added $4 billion in spending to the $233 billion proposed by Gov. Hochul in January, and everyone filled the budget with all kinds of non-budget stuff, as usual.
But at the last minute, lawmakers abandoned a Hochul proposal critical to small businesses: changing a long-pending state law that suddenly requires companies to pay years of additional back wages to workers.
It may be obscure, but it’s a good illustration of how dysfunctional Albany is.
In 1890, lawmakers decreed that mining, manufacturing, “trading” and other companies would have to pay blue-collar workers weekly.
The goal, as lawmakers noted nearly a half-century later, was to protect workers from companies that would disappear before paying them their wages.
Until recently, most modern businesses – think retailers, not quarries – didn’t think this law applied to them and paid their employees every two weeks.
But in 2019, an appeals court ruled that individuals, not just state regulators, could sue, finding that a construction company had violated the law by paying every two weeks.
The consequences handed down by the court were surprising: it decided that the construction company should pay 100% of the “overdue” wages as damages.
In other words, for every other week the worker was paid a week “late,” under this interpretation, the worker would receive an additional paycheck.
And it turns out that many workers suddenly fall under the definition of physical workers: people who get out of bed a quarter of the time and are paid less than $900 a week.
Given that workers can claim six years of damages, that’s a lot of money – retroactively increasing low-wage workers’ wage costs by 50%.
Trial lawyers have filed hundreds of lawsuits.
The defendants range from Victoria’s Secret to Bed Bath & Beyond, from Duane Reade to Petco, from doctors’ offices to ice cream stands.
The situation became murkier this year when another appeals court ruled in another lawsuit, involving a Queens airline, that workers I could not carry such cases.
The state’s highest court must resolve the issue, but it could take years.
The problem lies in the ambiguity of the law – and that is why in January, Hochul tried to clarify the situation.
His budget proposal would have amended the law to eliminate the liquidated damages provision in cases “where the employee was paid in accordance with the agreed-upon terms of employment,” meaning paid every two weeks.
It was a pragmatic compromise: it did not propose to gut the underlying law requiring weekly payment for manual workers.
And she has been open to even more compromise, discussing ways to address the issue with lawmakers during budget season.
Yet last week, Sen. Jessica Ramos (D-Queens) abruptly canceled the deal.
Ramos made fallacious arguments, telling New York Focus that “it’s disappointing to see the governor’s insistence on defending multinational corporations that want to displace workers” and “disappointing that such a far-reaching labor law is negotiated in the dark.
In fact, the companies facing disproportionate penalties here are small businesses, not large ones.
As for whether it is good to negotiate “in the dark”, no, it is not.
By this logic, Ramos should not support Nothing in the budget because the entire document is negotiated in the dark, at the last minute, with no public hearings or testimony on critical last-minute changes.
If Ramos didn’t want to do it the “wrong” way in the state budget, fine, she should do it the right way.
As chair of the labor committee, she should convene hearings, inviting all interested people – large and small businesses, law firms, so-called aggrieved workers – to testify.
The question is simple: what is the purpose of this law? Today?
Is it a question of imposing the payment of a weekly salary on people carrying out physical work?
Or is the initial goal to protect overnight company employees who might disappear without paying wages?
If the purpose of the law has changed, why not change the law to explicitly require a weekly wage for everyone who will be paid hourly in the future, rather than leaving it to trial lawyers to select the wage the most lucrative. pass cases?
And fix it by June, the end of the session.
Otherwise, more companies will have to pay out old claims, sacrificing their future growth – and their future ability to hire – to pay massive penalties for past behavior that harmed no one.
Nicole Gelinas is editor-in-chief of the Manhattan Institute’s City Journal.
New York Post
