Clarifies that the statutory damages available for certain wage violations are not punitive in nature and are designed to compensate workers

◆ The sponsor's argument

Why Jessica Ramos says this is needed

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.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.