New York Resignation Law: Final Paycheck, PTO, Non-Compete

Final paycheck: NY Labor Law section 191

NY Labor Law section 191 requires that an employee whose employment is terminated (which includes voluntary resignation) be paid all wages no later than the regular payday for the pay period in which the termination occurred. Practically, that means your last paycheck arrives on the next normally scheduled payday after your last day of work.

If the employer fails to pay on time, NY Labor Law section 198 authorises liquidated damages of 100% of the unpaid wages plus attorney's fees and prejudgment interest. New York imposes a longer statute of limitations on wage claims (6 years) than most states.

PTO payout: policy with enforcement

New York does not statutorily require PTO payout but does require employers to follow their own written policy. If the policy or handbook provides that accrued vacation is paid at separation, accrued vacation is treated as wages under section 191 and is enforceable. If the policy says vacation is forfeited at separation, the New York Department of Labor will generally enforce that policy as written if it is clearly communicated to the employee.

Many large NY employers offer payout; finance, legal, and professional services overwhelmingly do. Restaurants, retail, and small businesses commonly do not. Read the policy.

Commissions: section 198-c

Section 198-c specifically addresses commissions, bonuses, and supplements. The employer must comply with the written commission agreement. If the agreement says commissions earned before resignation but not yet paid are payable at separation, they are wages. If the agreement requires active employment on the commission payment date, courts generally enforce that requirement, although there is a long string of New York cases (Pachter v Bernard Hodes Group, 2008, NY Court of Appeals) that narrow what counts as "earned."

Non-compete in New York

New York non-competes are evaluated under the BDO Seidman v Hirshberg (1999) four-factor test: the restriction must be reasonable in scope, must protect a legitimate employer interest, must not impose undue hardship on the employee, and must not be injurious to the public. Courts apply this strictly. Non-competes for ordinary employees with no trade-secret access are commonly struck down or significantly narrowed.

Governor Hochul vetoed a broad non-compete ban in 2023 but a narrower bill addressing low-wage workers and notice requirements has been periodically reintroduced. As of 2026 the BDO Seidman common-law framework remains the primary enforceability test.

Customer non-solicit clauses survive at higher rates than full non-competes in NY court. Trade-secret protection under the Defend Trade Secrets Act (federal) and New York common law applies regardless of any restrictive covenant.

Unemployment after voluntary quit

New York Department of Labor disqualifies most voluntary quits from unemployment benefits, with a "good cause" exception. NY DOL has interpreted good cause to include documented health reasons (with medical evidence), domestic violence circumstances, material reductions in pay or hours, relocation forced by the employer, and constructive discharge situations. Personal reasons unrelated to the job (returning to school, retiring) usually do not qualify.

Practical New York exit checklist

• Final paycheck is due on the next regular payday after your last day. Late pay incurs 100% liquidated damages and attorney's fees under section 198.
• Read the handbook on PTO and commission policy. Both are enforced as written.
• If you signed a non-compete, have an employment attorney apply the BDO Seidman test before you start at a competitor.
• Confirm your final pay includes any commissions earned per section 198-c and your commission agreement.