3 Changes to New York Labor Laws Included in the Latest State Budget

When it comes to labor rules and protections, the state’s latest $254 billion budget is a mixed bag for blue-collar New Yorkers, advocates said.

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The $254 billion New York State budget passed last month included several measures to address the state’s poverty and affordability crises—like increased tax credits for families and the creation of the first statewide housing voucher program for the homeless.

However, when it comes to labor rules and protections, the budget is a mixed bag for blue-collar New Yorkers, advocates said.

One thing many New Yorkers agree on, including Gov. Kathy Hochul and worker advocates, is the need to address the high costs of living. During her State of the State speech in January, Hochul said that New York’s future depends on “the ability of every family to afford the essentials of life.”  

“When we raised the minimum wage and tied it to inflation,” Hochul added, “it was because I believe that when costs go up, your wages should too.”

However, advocates argue that raising wages is pointless if strong protections aren’t in place to ensure workers receive their wages on time, and without having to fight for them through the lengthy wage theft claims process.

Here’s a look at what the budget included around labor and wages. 

Pay frequency for manual workers

The budget included changes to Section 191 of the New York Labor Law, which regulates workers’ payment frequency. Manual workers (someone who spends more than 25 percent of their work time each week doing physical labor) have to get paid weekly, and no later than seven days after those wages were earned.

In the past, if a payment was late, the employer had to pay damages equal to 100 percent of the wages owed. With the budget change, manual workers won’t be able to receive those damages for the first late payment violation, but only when a violation occurs for a second time.

When asked about the change, the New York State Department of Labor (DOL) referred to the governor’s previous May press release on workforce changes in the budget.

“Many small businesses are unaware of the weekly requirement for classes of manual workers or that a certain classification of work is deemed manual work, pay the workers in-full and semi-monthly, and then are sued for large amounts of money despite already paying their employees full wages,” the announcement at the time explained. 

Under the new rules, “once an employer is put on notice that the class of workers are manual, they owe interest for the weeks in which the workers were paid semi-monthly rather than weekly,” the press release added. “If the employer does not pay those manual workers weekly going forward then they may be subject to liquidated damages.”

Labor advocates were upset about the amendment, saying it helped ensure workers get paid on time.“The penalties applied to these violations “[were] an effective deterrent to non-payment/late payment,” said Natalia Aristizabal, deputy director of Make the Road New York. 

Advocates also argue that it is often big companies, not the small businesses the governor cites, that frequently violate the law.

“The main beneficiaries are large companies, like large retail and fast-food chains and companies in the building services industry, that have been accused of routinely paying their workers late,” said Richard Blum, a staff attorney in the employment law unit at the Legal Aid Society. 

The change took effect with the budget’s passage last month, and applies retroactively to pending cases.

Wage theft

Each year in New York, more than 2 million workers don’t get their full pay, amounting to a combined $3.2 billion in unpaid wages and benefits, according to advocates.

In New York, wage theft can mean different things: failure to pay the minimum wage, overtime, or tips, or not giving an employee their required meal and rest breaks. Both the state and federal labor departments enforce wage standards. In New York City, the greatest number of state wage investigations are in the midtown Manhattan area, with hundreds of cases from 2017 to 2025, according to the DOL’s online dashboard.

This year, the budget gives the DOL more power to enforce wage theft laws, including the ability to seize a violator’s financial assets and place liens on property following an unpaid wage theft judgment.

“These strengthened penalties empower the Department [of Labor] to better protect the paychecks of hardworking New Yorkers and safeguard the young, and often most vulnerable, members of our workforce,” a DOL spokesman said via email.

The DOL commissioner can now give a county sheriff a warrant to seize and sell the property of wage theft offenders who owe monetary penalties. The sheriff has to pay any collected funds to the DOL within 60 days. 

“Wage theft is one of the cruelest, most rampant crimes we don’t talk about enough,” said Senator Jessica Ramos, chair of the Labor Committee and a candidate running to be the city’s next mayor, via email. 

“This year’s budget makes some strides toward the accountability we seek for bad employers, but we remain hopeful that our efforts will continue to empower workers to come forward with real tools like liens and stop-work orders, so there are real consequences for stealing a paycheck,” she added.  

While these new powers give the state a little more teeth, advocates argue that they can only be used after a lengthy court process, and only for DOL’s own cases. New York State Attorney General Letitia James and district attorneys also combat wage theft through investigations, settlements, and legal action.  

“The budget tweaks the powers of the Department of Labor to enforce its own orders in wage theft cases only at the end of a years-long process during which wage thieves can already have hidden all their assets,” said Blum.

Blum said that for years, advocates and legislators have been pushing for the approval of the “Empowering People in Rights Enforcement (EMPIRE) Worker Protection Act,” which would allow an affected employee, or an organization that represents them, to start a legal case on behalf of the labor commissioner.

Supporters plan to rally for passage of the proposal in Albany Wednesday. They highlight the difficulty of private enforcement in smaller workplaces and rural communities, and say the DOL lacks the resources needed to effectively investigate and prosecute wage theft on a large scale.

The changes in the budget don’t go far enough, Blum said.

“Unlike the EMPIRE Worker Protection Act, this tweak does not give the Department the resources it needs to conduct timely investigations,” Blum added via email. “It does not give workers the tools they need to prevent wage thieves from transferring their assets to avoid collection well before the end of a case against them.”

In 2019, state lawmakers passed the “Securing Wages Earned Against Theft” (SWEAT) bill, which would have allowed employees to place a lien on their employer’s property for the value of a wage claim. But former governor and current New York City mayoral candidate Andrew Cuomo vetoed it, citing “technical aspects.” 

Child labor

New York’s child labor laws mainly regulate the hours and conditions under which young people can work. Youth under 14 can’t work—with some exceptions—and those 14 and older can, but with limits on the number of hours per day and week, especially during school season. 

Teens between 14 and 17 years old also need an employment certificate, or “working papers,” issued by school districts. 

Currently, neither the State Education Department, New York City Department of Education, nor the NYS Department of Labor have data on the number of working papers issued. The state DOL plans to offer digital working papers in the future, and expects to maintain a database of those by May 2027.

According to the DOL’s Child Labor Case Data, the number of child labor cases in New York has increased since 2022, coinciding with a nationwide rise.

“In the past 10 years, the U.S. Department of Labor has seen a 316 percent increase in the number of children employed in violation of child labor laws across the country,” explains the governor’s press release.

In her executive budget released in January, Hochul said the state wanted to “align child labor law penalties with severity of violation,” advancing legislation to raise the maximum civil penalties.

“The union movement has always prioritized protecting our youth and ensuring their safety in the workplace. That is why we strongly supported increasing penalties for employers who violate child labor laws,” said Mario Cilento, New York State AFL-CIO president.

The final budget increased civil violations from a prior maximum of $1,000 for first-time offenders to up to $10,000; from $2,000 to at least $10,000 (but no more than $25,000) for second violations; and from $3,000 to at least $10,000 (but no more than $55,000) for third violations.

“By increasing penalties, New York is taking a critical step toward ensuring that employers who violate the law are held accountable and that illegally employing minors isn’t just the cost of doing business,” said Nina Mast, a policy and economic analyst at the Economic Policy Institute.

While the increases seem high, lawyers find some problems in the language included in the budget for the penalty assessment, as it asks the DOL commissioner to give consideration to “the good faith of the employer to believe that its conduct was in compliance with the law,” among other factors.

“It is almost certain that the Department of Labor will have to litigate over and over the meaning of the phrase ‘good faith belief,’” Blum said. “The phrase is an invitation to employers to exploit child labor and then litigate this vague defense if they are caught.”

The budget also raises the fines for injury or death of a minor worker.   

Now, for a first-time violation, the minimum fine is $3,000, but can go up to $30,000. For a second violation, it’ll start at $6,000 and can go up to $75,000. And for a third violation, the fine will range from $30,000 to $175,000.
“The updates New York is making to state child labor standards are particularly essential amid rising violations in New York and across the country, continued attempts to weaken existing standards in many states, and the risk of diminished federal wage and hour enforcement,” Mast said.

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