The Wage Payment Integrity Act: Closing New York’s Bonus and Severance Loophole

New York lawmakers have passed the Wage Payment Integrity Act (S2236A /A2222A), a bill aimed at closing a loophole that has let some employers walk away from their commitment to pay workers bonuses and severance. The bill cleared the Senate and Assembly with strong bipartisan support and now awaits Governor Kathy Hochul’s signature.

The Bonus and Severance Loophole

Under current New York Labor Law, courts have narrowly interpreted the definition of “wages” in Section 190. Many judges have held that a bonus does not count as a wage under Article 6, even when an employer clearly promised it ahead of time, as long as the bonus can be tied to any factor besides the individual employee’s own performance, such as the performance of a team or the company as a whole.

That reading does not match how most workplaces actually pay bonuses. A salesperson’s bonus might depend partly on the broader market. A group of attorneys might all bill hours toward a client one of them brought in. Under the current loophole, an employer can promise a bonus for that kind of work and then refuse to pay it, arguing it was never legally a “wage” in the first place.

How the Wage Payment Integrity Act Closes the Loophole

The Wage Payment Integrity Act, sponsored by State Senator Andrew Gounardes and Assembly Member Jo Anne Simon, fixes this in four ways:

1. Clarifies the definition of “wages.” Any compensation, including a bonus, counts as a wage and is protected under Article 6, unless the employer clearly, prominently, and in writing told the employee in advance that the payment was purely discretionary.
2. Creates a rebuttable presumption when an employer skips required wage notices. If an employer fails to provide the written terms of employment required under Labor Law Section 195, the terms the employee describes are presumed to be the agreed terms. This mirrors a protection commissioned salespeople already have under Section 191(c).
3. Protects earned severance and benefits. The bill clarifies that withheld severance, benefits, and wage supplements are subject to Article 6’s civil remedies (including liquidated damages and attorney’s fees) even where criminal liability under Section 198(c) does not apply.
4. Closes off “kickback” schemes, making Article 6’s civil remedies available to workers whose employers demand that they return part of their earned wages.

Why New Yorkers Need The Wage Payment Integrity Act

According to attorney Scott A. Lucas, a member of the wage theft legislation subcommittee of the National Employment Lawyers’ Association- NY Chapter and drafter of the bill, this loophole is especially damaging for severance claims, which often build up over years and can be hard to litigate. He explained to Law.com how a worker owed $100,000 in unpaid severance can still struggle to find a lawyer willing to take the case on contingency, since these claims involve significant work and risk to litigate. The bill is supported by NELA-NY, the National Employment Law Project, and several other workers’ rights group.

The Wage Payment Integrity Act would not stop employers from offering discretionary bonuses. It simply requires them to say so, clearly and in advance, instead of sending what Lucas called “mixed messages” that lure workers in with promises the employer never intends to keep.

Broad, Repeated, Bipartisan Support

This is not a bill that squeaked through on a party-line vote. Earlier versions of the Wage Payment Integrity Act (introduced as S4973) passed the New York Senate without a single “no” vote in both 2023 and 2024:

• June 6, 2023: 62 Yea, 1 Present/Not Voting, 0 Nay
• June 3, 2024: 60 Yea, 2 Present/Not Voting, 0 Nay

Both of those earlier versions died in the Assembly before reaching the Governor. This year’s version, S2236A, finally cleared both chambers: the Senate passed it 60-1 on March 10, 2026, and the Assembly followed with a bipartisan 132-9 vote on March 30, 2026. Support has crossed party lines throughout. Several Republican Assemblymembers are co-sponsors of the bill.

That kind of consistent, repeated support across three legislative sessions reflects a shared, common-sense goal: workers should be able to count on the compensation they were promised, and honest employers should not be undercut by competitors who make promises they never intend to keep.

Where The Wage Payment Integrity Act Stands

As of this writing, the Wage Payment Integrity Act has passed both houses of the New York Legislature and is awaiting Governor Hochul’s signature. If signed as written, it would take effect immediately and apply to actions filed on or after that date. If you believe New York workers deserve to be paid what they were promised, contact Governor Hochul’s office and let her know you support the bill.