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. This holds even when an employer clearly promised it ahead of time. The only requirement is that the bonus can be tied to some factor besides the employee’s own performance. That factor could be the performance of a team, or of 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. The employer can argue 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 Article 6 protects it. The only exception is when the employer clearly, prominently, and in writing tells the employee in advance that the payment is 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 law presumes the terms the employee describes 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. This holds true even where criminal liability under Section 198(c) does not apply.
4. Closes off “kickback” schemes. Workers whose employers demand that they return part of their earned wages can now use Article 6’s civil remedies.

Why New Yorkers Need The Wage Payment Integrity Act

Attorney Scott A. Lucas is a member of the wage theft legislation subcommittee of the National Employment Lawyers’ Association- NY Chapter and drafter of the bill. According to Lucas, 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. 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. Otherwise, employers send what Lucas called “mixed messages” that lure workers in with promises they never intend to keep.

Broad, Repeated, Bipartisan Support

This is not a bill that squeaked through on a party-line vote. Earlier versions of the bill (introduced as S4973) passed the New York Senate without a single “no” vote. That happened 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. Honest employers should not lose business to 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. It now awaits 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. Let her know you support the bill.

What the Personnel File Records Bill does

S3460, sponsored by Senator Andrew Gounardes (D-26, Brooklyn), and its Assembly companion A2107, sponsored by Assemblymember Jessica González-Rojas (D-34, Queens), add a new Section 210-b to the New York Labor Law. The new section is modeled on Massachusetts’ longstanding Personnel Record Law. It gives every employee in New York, public and private sector alike, the right to:

• See your own file. Employers must hand over a complete copy of your personnel record, at no cost, within five business days of a written request. You get two of these requests per calendar year.
• Know when something negative is added. If your employer places negative information in your file, they must notify you within 10 days.
• Respond to what’s in there. Once notified, you can request the negative record and submit a written statement responding to it. That statement becomes a permanent part of the file. It travels with the record whenever the employer shares it with anyone else. This request doesn’t count against your two-per-year limit.
• Seek expungement of false information. If your employer knew, or should have known, that something in your file is false, you can pursue removal of it through the courts, a collective bargaining agreement, or other personnel procedures.

What qualifies as a personnel record?

The Personnel Records Bill defines a “personnel record” broadly as any record your employer keeps that identifies you and is used, or could be used, in decisions about your employment, promotion, transfer, pay, or discipline. That covers your name, address, and date of birth, your job application and resume, your pay rate and compensation history, your start date, and the disciplinary and evaluative records that so often determine whether you get promoted or get fired.

The Bill excludes information about other people where disclosure would be an unwarranted invasion of their privacy.

Employers also can’t simply purge your file the moment you’re gone. The employer must retain a complete personnel record from your hire date until three years after your separation. There’s no deadline for former employees to request access.

New York isn’t breaking new ground here. It’s catching up. Roughly two dozen other states already give employees some form of access to their own personnel files. New York has had no such law at all, for either the public or private sector.

How the Personnel Records Bill passed

The Senate passed S3460 on April 22, 2026, by a vote of 38-21. It was a straight party-line tally, with every Democrat in favor and every Republican opposed. The Assembly followed on May 19, 2026, passing A2107 by a closer margin of 92-49. This bill moved on Democratic votes alone. That fact tells you something about how hard the business lobby fought it, and how important it is to get it over the finish line now that both chambers have passed it.

States That Already Give Workers Access to Their Personnel Records

At least 22 other states already provide some form of employee right to inspect or copy personnel records, though the scope and strength of these laws vary widely:

State	State	State
Alaska	Maine	Ohio
California	Massachusetts	Oregon
Connecticut	Michigan	Pennsylvania
Delaware	Minnesota	Rhode Island
Florida	Nevada	South Carolina
Illinois	New Hampshire	Washington
Iowa	North Carolina	Wisconsin
Louisiana

Coverage differs from state to state. Some cover only current employees, some allow inspection only rather than copies, and some apply only to public-sector workers. Currently, New York has no personnel file access law at all.

Why it matters

Right now, if your employer writes something untrue into your file, you may never know. You could be passed over for a promotion, denied a raise, or fired. The paper trail justifying it could sit in a filing cabinet you can never open. We see the consequences of that opacity constantly in wage and hour and retaliation cases. Workers can’t explain a sudden negative review that appeared right after they complained about unpaid overtime. They never had a chance to see it, question it, or respond to it before it became the official record used against them.

Massachusetts has required this kind of access for years without the workplace chaos employer groups warn about. What it has done is give employees a fair shot to correct the record while it still matters, instead of finding out for the first time in a courtroom.

This bill can also cut down on litigation itself, not just the harm that leads to it. Right now, a worker who suspects retaliation or discrimination often has no way to confirm what’s actually in their file without filing suit and forcing the issue through discovery, sometimes months or years after the fact. Give employees the right to request that information directly, and many disputes can resolve, or avoid altogether, before a lawsuit ever becomes necessary. Workers get answers faster. Employers face fewer claims built around records nobody could see until litigation forced the issue.

“In employment law cases, I constantly see workers who have no idea what is written about them in their own file until it is revealed in litigation discovery, sometimes years after a negative review or write-up was used to justify cutting their hours or firing them outright. This bill lets a worker find out what’s being said about them while there’s still time to correct it, not after they’ve already lost their job and have to sue to find out why.”

— Christopher Marlborough, The Marlborough Law Firm

Once Governor Hochul signs it, employers will have 60 days to put compliant policies in place.

Take action

This bill will only become law if Governor Hochul signs it by the end of the year. If you believe New York workers deserve to know what is in their own personnel files, contact Governor Hochul’s office and urge her to sign S3460/A2107.

New York’s legislative custom often “calls up” passed bills for the Governor’s signature in batches. That typically happens near the end of the calendar year. There’s still time to make the case for why she should sign it.

“This bill passed with overwhelming, bipartisan support because the underlying facts are indefensible. Employers have been stacking the deck against their own employees, burying patently unfair contract provisions in paperwork that workers are required to accept just to get the job. This law puts a stop to it.”

Christopher Marlborough, Board Member and Legislative Advocacy Co-Chair, National Employment Lawyers Association – New York Affiliate (NELA/NY)

What the Anti-Waiver Act Does

The Problem It Targets

For years, some employers have buried provisions in employment applications and offer letters that strip away workers’ legal protections before a dispute ever arises. These provisions include arbitration agreements and class action waivers. One increasingly common tactic: employers require workers to agree to clauses that shorten how long they have to bring a claim. A worker might otherwise have six years to sue for unpaid wages or unpaid overtime. But onboarding paperwork can cut that window down to six months. The worker never got a chance to negotiate the term.

What the Bill Changes

The Anti-Waiver Act would add new provisions to the Labor Law (Section 219-e) and the Human Rights Law (Section 302). Together, they make clear that:

• Private agreements cannot waive or limit rights, remedies, or claims under the NYLL and NYSHRL. That’s true whether the waiver is written into the contract directly or only implied.
• Contractual provisions that shorten an employee’s statute of limitations for these claims are invalid.
• Contractual provisions requiring workers to waive their right to act collectively in a class or collective action are invalid. The exception: cases where federal law preempts them.
• Contractual provisions requiring workers to waive their right to sue in court are invalid, unless federal law preempts them.
• Collective bargaining agreements remain unaffected. Workers can still voluntarily settle claims or sign severance agreements after a dispute arises.
• The law doesn’t apply where federal law preempts it. That covers most arbitration agreements, along with the class action waivers packaged inside them.
• The law includes a severability provision. If a court strikes down one part, the rest of the law stays in force.

The Class Action Waiver Mechanics

One provision deserves its own explanation: the bill would ban standalone, pre-dispute class action waivers. These are class action waivers that exist outside of an arbitration agreement. Right now, some employers require workers to give up their right to bring or join a class action. They do this as a plain contract term, with no arbitration requirement attached. The Anti-Waiver Act would void that practice.

Federal law supersedes state law on the enforceability of arbitration agreements. So the bill excludes any provision inconsistent with the Federal Arbitration Act. That federal law generally shields arbitration agreements, including the class action waivers built into them, from state interference.

Why the Anti-Waiver Act Is Needed Now

New York Courts Have Split on the Issue

Some New York courts have upheld severely shortened limitations periods. In one case, an appeals court called it “inherently reasonable” for an employer to cut a discrimination claim’s filing window. The window went from three years down to six months. Another case enforced a provision limiting the time to bring any employment claim to just six months. As a result, the court dismissed the worker’s Human Rights Law claims.

Federal courts sitting in New York have gone the other way. They’ve consistently held that similar shortening provisions are void as against public policy under the federal Fair Labor Standards Act. That creates an uneven playing field: the same conduct gets treated differently depending on which statute a worker sues under. The Anti-Waiver Act closes that gap and puts NYLL and NYSHRL claims on the same footing as their federal counterparts.

Other States Are Confronting the Same Problem

New York isn’t alone here. New Jersey went further than court rulings alone. Under N.J.S.A. 10:5-12(r), requiring a worker to consent to a shortened statute of limitations is an unlawful employment practice. The New Jersey Supreme Court separately struck down such a clause in Rodriguez v. Raymours Furniture Co. (2016).

The Michigan Supreme Court recently overturned decades of precedent that had made shortened filing deadlines in employment paperwork automatically enforceable. In Rayford v. American House Roseville I, LLC (2025), the court changed that rule. Judges must now scrutinize boilerplate acknowledgment forms and applications for basic fairness before enforcing them.

At the federal level, the Sixth Circuit reached a similar conclusion in Boaz v. FedEx Customer Information Services, Inc. (2013). The court held that employees cannot waive their FLSA rights by contract, including through a shortened filing deadline. Federal district courts within the Second Circuit, which covers New York, reached the same conclusion on FLSA claims specifically. That includes Castellanos v. Raymours Furniture Co., 291 F. Supp. 3d 294 (E.D.N.Y. 2018). There, the court severed the shortened limitations period from the parties’ arbitration agreement.

Legal scholars have raised similar concerns. A 2024 law review article on Title VII discrimination claims argues that shortened-limitations clauses are fundamentally unfair. The reasoning: there’s a real power imbalance between an applicant and an employer at the moment of hiring. A worker rarely has any realistic chance to negotiate boilerplate paperwork stapled to a job offer.

A Timely Boost for the Anti-Waiver Act From the Court of Appeals

Just one day before the Legislature sent the bill forward, the New York Court of Appeals issued a relevant decision. That ruling reinforces exactly what the Anti-Waiver Act is meant to codify. In Walton v. Comfort Systems USA (Syracuse), Inc., decided June 23, 2026, New York’s highest court addressed the issue directly. It unanimously held that a contract clause was unenforceable. The clause had shortened the time limit for prevailing-wage claims under Labor Law § 220. The underlying right came from the statute itself, not from anything the parties negotiated. So a private contract couldn’t cut it short.

The reasoning in Walton lines up closely with the goal of the Anti-Waiver Act. When the Legislature creates a right for workers’ protection, employers shouldn’t get to quietly take it away through contract terms. That’s especially true for terms workers had no real chance to negotiate. But Walton only addressed prevailing-wage claims narrowly. It doesn’t reach every type of waiver. And it doesn’t override the older appellate decisions that went the other way on NYLL and NYSHRL claims generally. That’s exactly the gap the Anti-Waiver Act is designed to close.

A Get-Out-of-Jail-Free Card for Wage Thieves

Testimony From the Front Lines

I testified on this issue on March 4, 2026, before the Senate Standing Committees on Codes and Consumer Protection. The joint hearing was titled Current Patterns in White-Collar Crime and Fraud, and Possible Updates to Laws Protecting New Yorkers and Markets. I spoke about how these waivers function in practice. It’s rarely as simple as a legitimate employer protecting itself from stale claims. In my experience representing workers, aggressive stacking of these provisions is a red flag. Those employers tend to be the ones with the most to hide.

How the Scheme Works

Here is an example of how the scheme works. An employer sets up a fraudulent independent contractor scheme, classifying workers who are, in every functional sense, employees. That lets the employer avoid paying minimum wage, overtime, and payroll taxes. It also lets them sidestep basic protections like workers’ compensation and unemployment insurance. Then the employer adds a class action waiver, a shortened statute of limitations, and a forced arbitration clause. All three are buried in the same “independent contractor agreement” the worker has to sign just to start the job. They go in before any dispute has even happened, offered on a take-it-or-leave-it basis.

Why That’s So Dangerous

The more illegal the underlying scheme, the more valuable these waivers become to the employer running it. A misclassified worker typically doesn’t find out until much later. Sometimes it’s not until tax season. Other times, it’s not until they get hurt on the job and discover they have no workers’ compensation coverage. By the time they realize what happened, a shortened limitations period may have already run out.

The class action waiver compounds the problem. It bars workers from banding together. An employer stealing from a hundred workers only has to worry about the rare worker who discovers the scheme. That worker must hire a lawyer and force arbitration alone, win or lose, in private, off the public record. For a dishonest employer, that’s a trade worth making.

That’s why the Anti-Waiver Act matters beyond any single clause it invalidates. It closes off a strategy that lets the worst-behaving employers use their own contract paperwork as a shield. That shield insulates illegal conduct from the very legal processes meant to catch it.

Watching the Anti-Waiver Act Assembly Floor Debate:

Bill sponsor Assemblymember Harry Bronson wasn’t the only one who made the case for this legislation on the Assembly floor. Assemblymember Mary Beth Walsh is the Assembly Minority Leader Pro Tempore and a practicing attorney of over 30 years. She questioned Bronson closely during the May 13 floor debate. The exchange is worth watching in full.

Walsh opened skeptically. She pointed out how much New York has already done to protect workers from one-sided contract terms. Then she pressed Bronson on why this bill was needed on top of existing law. She initially framed her concern around freedom of contract. Sophisticated, represented employees negotiating written agreements should be able to bargain for themselves, she argued, without the state stepping in.

How Skepticism Turned Into Support

Bronson’s answer shifted the terms of the debate. He explained that courts have found an ordinary job application itself can count as an employment agreement. Under that theory, courts have upheld provisions cutting a six-year statute of limitations down to as little as six months. Bronson described those changes as reductions of 87 to 95 percent.

That answer visibly changed Walsh’s thinking in real time. She noted the practice “seems egregious.” By the end of the exchange, she told Bronson she planned to support the bill. She drew a distinction between two very different situations. One is an executive negotiating a contract with counsel present. The other is a worker who unknowingly signs away rights just by filling out a job application. The bill passed the Assembly by an overwhelming bipartisan vote of 135-2.

It’s a rare thing to watch a legislator’s position change live on the floor. It’s also a strong signal for Governor Hochul to bear in mind as she considers whether to sign the bill. That is, even members who instinctively favor keeping government out of private contracts found this status quo indefensible. They didn’t want to keep letting employers enforce these provisions against workers so easily.

What the Anti-Waiver Act Means for New York Workers

Did you sign an employment application, offer letter, or agreement? Did it include a clause shortening your time to bring a wage or discrimination claim? That provision may not hold up, regardless of whether the Anti-Waiver Act becomes law. Courts increasingly recognize that these statutory protections belong to workers, not to fine print an employer inserted into hiring paperwork.

Christopher Marlborough is Board Member and Legislative Advocacy Co-Chair of the National Employment Lawyers Association – New York Affiliate (NELA/NY). He has testified before the Legislature in support of the Anti-Waiver of Employment Rights Act and related worker-protection legislation.

Support the Anti-Waiver Act

The Anti-Waiver of Employment Rights Act passed the Legislature by a wide margin and now sits waiting for Governor Hochul’s signature. If you believe New York workers deserve these protections, contact Governor Hochul’s office. Urge her to sign the Anti-Waiver of Employment Rights Act into law.

What “remedial construction” means, in plain terms

When a law is “remedial,” it exists to fix or prevent a specific harm; here, wage theft and unfair labor practices. “Construction” is a legal term for how courts interpret a law’s language. So a “remedial construction” requirement tells judges: when there’s ambiguity in how a law should apply, interpret it in the way that best protects the workers it was designed to help, not in the way that most favors employers.

What the Remedial Construction of NYLL Act does

The Act adds a new provision to the Labor Law directing courts to interpret it “liberally” in favor of workers. This holds regardless of how courts have interpreted similarly worded federal laws, like the Fair Labor Standards Act (FLSA).

That distinction matters more than it might sound. For decades, courts treated the New York Labor Law as a remedial statute, reading it broadly to accomplish its purpose of protecting workers. Conversely, Courts have read the Labor Law narrowly when interpreting provisions excluding workers from the law’s protection. The federal FLSA operated under the same principle for more than seventy years until the U.S. Supreme Court broke from that approach in its 2018 decision in Encino Motorcars, LLC v. Navarro, rejecting decades of precedent requiring narrow construction of FLSA exemptions.

New York’s wage and hour statutes share substantial overlapping language with the FLSA. That overlap has long created a real risk that courts could import the more restrictive federal approach into New York cases. Lawmakers never intended that shift. This bill closes that door directly. It makes clear that New York’s Labor Law stands on its own, regardless of which direction federal courts move.

A second attempt, and a narrower bill

This isn’t the first time the legislature has taken up this protection. A broader version of the bill (S7388) passed with wide majorities last year. Governor Hochul raised concerns that its language was too sweeping. Lawmakers took that feedback seriously. They returned this session with a more narrowly tailored version that directly addressed those concerns, focusing specifically on provisions with genuine remedial purpose rather than the broader construction standard in the original bill.

The revised approach clearly resonated: it passed by an overwhelming, bipartisan 53-7 vote in the Senate and 129-12 in the Assembly.

Sponsored by both chambers’ Labor Committee chairs

The bill’s sponsors are not incidental to its success. Senator Jessica Ramos and Assemblymember Harry Bronson each chair the Labor Committee in their respective chambers. That gives this legislation the backing of the two lawmakers most directly responsible for shaping New York’s labor policy.

Broad coalition support for Remedial Construction of NYLL Act

The bill also drew memos of support from a wide range of organizations, including NELA-NY, the National Employment Law Project (NELP), Catholic Migration Services, and Popular Democracy in Action. That’s support spanning labor advocacy, immigrant worker protection, and broader worker-rights organizations alike.

A precedent that’s already worked

This isn’t a new or untested legal approach. New York took the same step for its Human Rights Law back in 2019. It amended Executive Law § 300 to direct courts to construe that law liberally in favor of protected workers. That change applied regardless of how courts had interpreted federal civil rights laws. Courts have since applied that standard as intended, strengthening protections against workplace discrimination and harassment under state law. The Remedial Construction of the Labor Law Act extends that same, proven approach to New York’s wage and hour protections.

Why it matters right now

Supporters point to a wave of recent federal actions rolling back worker protections. These include Department of Labor guidance narrowing enforcement of minimum wage and overtime protections for home care workers, and new restrictions on liquidated damages in federal wage investigations. With federal policy shifting in a less worker-protective direction, this bill ensures New York’s own laws don’t get pulled along with it.

“This bill passed with remarkable bipartisan support, a real testament to how much common ground exists on protecting New York’s workers. We’re grateful to Senator Ramos and Assemblymember Bronson for their leadership, and we’re hopeful Governor Hochul will have the chance to sign this important bill around Labor Day, a date that would beautifully reflect what this legislation is all about.”

Christopher Marlborough, Co-Chair of NELA-NY’s Legislative Advocacy Committee

What’s next for the Remedial Construction of NYLL Act

The bill passed the Senate on June 1, 2026, and the Assembly on May 19, with wide bipartisan margins in both chambers. Lawmakers will next formally deliver it to Governor Hochul for her signature.

With Labor Day approaching, NELA-NY and other advocates are hopeful the Governor will have the opportunity to sign this bill around that meaningful date. It would be a fitting moment for legislation that reaffirms New York’s commitment to protecting its workers. If you support the Remedial Construction of NYLL Act, contact Governor Hochul’s office and urge her to sign the bill.