KEY TAKEAWAYS:

• Several employment bills passed by the New York Legislature are awaiting action by Gov. Hochul and could require immediate employer compliance upon enactment

• Employers may need to revise employment contracts and severance agreements if the Anti-Waiver of Employment Rights Act and the No Severance Ultimatums Act become law

• Employers may face additional litigation consequences under the Wage Payment Integrity Act for failing to properly notify an employee of “wages” that are purely discretionary

Proposed legislation would affect employment agreements, severance practices, wage-payment litigation, and other workplace policies.

New York employers should closely monitor several employment-related bills that cleared the State Legislature in the final days of the 2026 legislative session and are now awaiting Gov. Hochul to take executive action. These measures are not yet law unless and until signed by the governor, but several would take effect immediately upon enactment, leaving employers with little time to revise agreements, wage practices, and litigation-risk strategies. These key bills warrant attention now so that employers can take prompt and necessary action.

The Wage Payment Integrity Act – S2236A/A2222

The bill known as the Wage Payment Integrity Act would amend the definition of “wages” in the New York Labor Law to include any employment compensation that is not payable at the employer’s “sole and absolute discretion.” The bill specifically addresses bonuses and other forms of compensation and provides that, for such compensation to fall outside the definition of wages, the employer must notify the employee in a “clear, prominent, timely, and uncontradicted fashion that the employer has sole and absolute discretion over whether to pay it.”

The bill would create a significant consequence for employers in wage disputes: if an employer cannot produce required written terms as it relates to all types of pay upon request by the Commissioner of the Department of Labor or an employee, there would be a presumption that the employee’s version of the agreed-upon terms is correct. If signed, the bill would take effect immediately and apply to actions filed on or after the effective date.

Employers should review bonus plans, commission plans, incentive compensation documents, offer letters, and wage notices to ensure that discretionary compensation is clearly and consistently described as such. Any ambiguity may increase exposure in wage-payment litigation.

Amendment to Chapter 451 of New York Labor Law § 193 – S10569/A10342

The amendments to Chapter 451 would extend existing provisions of New York Labor Law § 193 that permit certain deductions from wages. The bill would extend the current wage-deduction framework for an additional two years past its current authorization period, through December 31, 2028.

The covered wage deductions include deductions required by law, deductions expressly authorized by the employee and for the employee’s benefit, deductions related to recovery of wage overpayments caused by mathematical or clerical errors, and deductions for repayment of wage or salary advances. The bill would take effect immediately if signed.

Approval of the bill would preserve the status quo of the past 14 years. As such, employers that rely on payroll deductions for benefits, parking, gym memberships, overpayment recovery, or salary advances should continue to ensure that deductions are authorized, documented, and administered in accordance with Labor Law § 193 and applicable regulations

Amendment Relating to the Remedial Construction of New York Labor Law Act of 2026 – S9330/A10365

The bill relating to the Remedial Construction of New York Labor Law Act would add a new Labor Law provision directing courts and agencies to construe the New York Labor Law liberally to accomplish its remedial purpose. The bill states that this liberal construction would apply even where similarly worded federal provisions have been interpreted differently.

Given that Gov. Hochul previously vetoed a similar, but more expansive version of the bill, it is less certain whether she will approve the bill. If she does sign it, the measure would take effect immediately. If enacted, defendants in labor law claims should expect plaintiffs to cite to this statute in favor of broader readings of employee protections and narrower readings of employer defenses or exemptions.

The No Severance Ultimatums Act – S372A/A6480

The No Severance Ultimatums Act would impose new requirements on severance agreements offered to New York employees or former employees. The bill would require employers offering severance agreements to notify employees that they have the right to consult with an attorney, must be given at least 21 calendar days to consider the agreement, and may revoke the agreement within seven calendar days after signing. Such an agreement will not become effective or enforceable until the eighth day after signing, when the revocation period expires. Notably, the bill would only apply to severance agreements offered upon separation that require the employee to release waivable claims against the employer.

A noncompliant agreement would be void and unenforceable.

The bill includes a limited exception for certain severance agreements negotiated through the collective bargaining process and that specifically acknowledges the provisions of the section. If signed, the bill would take effect immediately.

Employers should prepare to revise severance agreement templates for New York employees. Employers should consider adding clear attorney-consultation language, a 21-day consideration period, a seven-day revocation period, and language confirming that the agreement is not effective until the revocation period expires. Employers should also train HR and managers not to impose artificial deadlines or suggest that severance terms will be withdrawn if an employee takes the full consideration period.

The Anti-Waiver of Employment Rights Act – S4424A/A5411

If enacted, the Anti-Waiver of Employment Rights Act would limit the enforceability of contractual provisions that waive or restrict employee rights under the New York Labor Law and the New York State Human Rights Law. The bill would invalidate express or implied provisions that waive or otherwise limit an employee’s substantive or procedural rights, remedies, or claims, subject to certain exceptions.

The bill identifies exceptions for waivers included in the settlement of a good-faith, bona fide dispute not raised or initiated by the employer, and for agreements entered into upon or following termination of employment. It also states that the restrictions would not apply where preempted by federal law, an important caveat for arbitration agreements governed by the Federal Arbitration Act. If signed, the bill would become effective immediately.

Employers should review employment agreements, arbitration agreements, restrictive covenant agreements, compensation plans, equity documents, handbook acknowledgments, and release provisions for language that could be characterized as limiting rights under New York Labor Law or New York Human Rights Law. Attention should be paid to shortened limitations periods, class or collective action waivers, procedural limitations, and broad releases obtained during employment.

Steps Employers Can Take Now

Because the majority of these bills would become effective immediately if signed by Gov. Hochul, employers may wish to begin preparing now rather than waiting for final action. Proactive review of existing agreements and workplace practices can help minimize compliance challenges if the legislation is enacted.

• Audit compensation documents to confirm whether bonuses, commissions, incentives, and other payments are intended to be discretionary or earned wages.
• Update severance agreement templates to include New York-specific review requirements and revocation language if the No Severance Ultimatums Act is signed.
• Review agreement waiver language in employment, arbitration, compensation, and separation agreements for potential conflicts with the Anti-Waiver bill if enacted.
• Confirm payroll deduction compliance and maintain written employee authorizations if and where required.
• Preserve written employment terms because the Wage Payment Integrity Act would create a presumption in favor of the employee’s asserted terms if the employer cannot produce required records.
• Monitor Gov. Hochul’s actions and any chapter amendments that may alter the final statutory language before implementation of any of the bills discussed herein.

Goldberg Segalla will continue tracking these bills and will provide further updates if they are signed, vetoed, or amended. Employers with New York employees should consider working with counsel now to identify agreement language and wage practices that may need prompt revision.

If you have questions about how these new employment bills could impact your business if enacted, please contact:

• Logan Arlen
• Cali L. Chandiramani
• Scott R. Green
• Christopher P. Maugans
• Caroline J. Berdzik
• Stephen C. Mazzara
• Or another member of the Employment and Labor team