Emotional Distress Damages in New York Employment Cases: What They Compensate, How They Are Proved, How Awards Are Reviewed

Emotional distress damages are money awarded to compensate a person for the mental and emotional harm caused by unlawful discrimination, harassment or retaliation, as distinct from lost pay. Federal law, the New York State Human Rights Law (NYSHRL) and the New York City Human Rights Law (NYCHRL) each allow compensatory damages. The federal statute caps them; the State statute states no dollar limit on them, and the City law's court-action section sets no dollar cap.⁠^{[1][2][4][10]}

This page explains the rules. It does not say what any person's distress is worth. The only dollar figures on it are the federal statutory caps.⁠^[2]

What do emotional distress damages compensate?

The federal damages statute names the kinds of harm: emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life and other nonpecuniary losses.⁠^[3] "Nonpecuniary" means harm that is not a direct money loss such as wages.

The New York State Human Rights Law uses the general term "compensatory damages."⁠^[4] The State Division of Human Rights describes the remedies in a final order as possibly including "compensation for emotional pain and suffering."⁠^[11] The State's highest court refers to this kind of award as one for "mental anguish."⁠^[6]

Under the New York City Human Rights Law, a court action is for damages, and the NYC Commission on Human Rights may order payment of compensatory damages.⁠^[10][12] The City law also provides that a person is "aggrieved" even if the only injury is the deprivation of a right the law protects.⁠^[13]

These damages are compensation. They are separate from punitive damages, which the Court of Appeals describes under the City law as punishment for wrongful conduct that goes beyond mere negligence.⁠^[14] See punitive damages under federal, State and City law.

Which laws allow them, and with what limits?

Question	Federal: Title VII and ADA	New York State Human Rights Law	New York City Human Rights Law
Are compensatory damages for emotional harm available?	Yes, for unlawful intentional discrimination; not for a practice unlawful only because of its disparate impact.⁠[1]	Yes. The Division may award compensatory damages, and a court action is for damages.⁠[4][15]	Yes, in court and from the Commission.⁠[10][12]
Is there a dollar cap?	Yes. Combined with punitive damages: $50,000 to $300,000 per person, by employer size.⁠[2][3]	The statute states no dollar limit on compensatory damages.⁠[4]	The court-action section sets no dollar cap.⁠[10]
Who decides the amount?	Any party may demand a jury when compensatory or punitive damages are sought; the jury is not told about the cap.⁠[16]	At the Division, an Administrative Law Judge conducts the public hearing.⁠[17] In court, the claim is a cause of action for damages.⁠[15]	The Commission after a hearing, or a court in a civil action.⁠[12][10]
Special limit in disability accommodation cases?	Under the ADA, no compensatory or punitive damages where the employer shows good-faith efforts, in consultation with the person, to identify and make a reasonable accommodation.⁠[18]	Compensatory damages are available under the general remedies section.⁠[4]	Compensatory damages are available under the general remedies sections.⁠[10][12]

A federal race discrimination claim under 42 U.S.C. § 1981 is outside the cap: the cap statute says it does not limit relief under § 1981, and the Supreme Court has described § 1981 relief as including compensatory damages.⁠^[19][20] The details of the federal tiers are in the guide to the federal damages caps.

Not every workplace statute lists this kind of relief. The remedies that New York's whistleblower law, Labor Law § 740, lists for a court are an injunction, reinstatement or front pay, restored benefits and seniority, lost wages and benefits, costs and attorney's fees, a civil penalty and, for a willful, malicious or wanton violation, punitive damages.⁠^[21] The guide to Labor Law § 740 covers that statute.

How is emotional distress proved under the State law?

A 1991 New York Court of Appeals decision reviewing a mental-anguish award by the Division of Human Rights sets out three points under the State law.⁠^[5][6]

1. Medical treatment is not required. Under the State Human Rights Law, compensable mental injury may be proved by medical testimony where that is available, but psychiatric or other medical treatment is not a precondition to recovery.⁠^[5]
2. Proof can come from the person's own testimony. Under the State law, mental injury may be proved by the complainant's own testimony, corroborated by reference to the circumstances of the alleged misconduct.⁠^[5]
3. There must be evidence of how serious the injury was. Beyond the fact of mental anguish, the State's highest court requires some evidence of the magnitude of the injury, to assure that a compensatory award is neither punitive nor arbitrary.⁠^[6]

The same decision names objective criteria a reviewing court may apply to a State-law compensatory award: the duration of the person's condition, its severity or consequences, any physical manifestations, and any medical treatment.⁠^[6] So treatment records are not a legal precondition under the State law, but they are one of the things a court may look at.

That decision arose under the State law; this page does not describe the proof rules under federal law or the City law. Under the City law, courts have said the severity and pervasiveness of harassment bear on the scope of damages, not on whether there is liability.⁠^[22] The guide on where the "severe or pervasive" standard still applies explains that liability question.

How do courts review the size of an award?

Under the State Human Rights Law, a court reviewing a Division mental-anguish award for legal error and excessiveness must determine three things: whether the relief was reasonably related to the wrongdoing, whether the award was supported by evidence before the Commissioner, and how it compared with other awards for similar injuries.⁠^[7]

The Court of Appeals also rejected the idea that the law fixes a nominal amount as appropriate compensation for mental anguish caused by unlawful discrimination.⁠^[6] In other words, under that State-law decision the review runs in both directions: an award needs evidence behind it, and the law sets no token sum.

The decision is about the method of review, not about an amount. The Court of Appeals stated that the issue before it was not the excessiveness or inadequacy of the damages but whether the Appellate Division had applied the proper standards, and it sent the case back to that court for review under the proper standard.⁠^[23] It was decided in 1991, when the State statute did not allow punitive damages in employment cases; the State law has allowed them against private employers for claims accruing on or after October 11, 2019.⁠^[24]

Does the forum matter?

It affects who decides and what review follows. In federal court a jury may be demanded when compensatory or punitive damages are sought under Title VII or the ADA.⁠^[16] At the State Division of Human Rights an Administrative Law Judge conducts the public hearing, and the review standard above applies to a Division mental-anguish award.⁠^[17][7] Filing with the State Division or the City Commission generally bars a later court case on the same State or City claim.⁠^[25][10] The forum comparison is in EEOC, Division of Human Rights, City Commission or court.

Are emotional distress damages taxed?

Under federal tax law, gross income excludes damages, other than punitive damages, received on account of personal physical injuries or physical sickness. Emotional distress is not treated as a physical injury or physical sickness for that purpose, except that the exclusion still reaches an amount not more than what was paid for medical care attributable to the emotional distress.⁠^[8]

The IRS states that proceeds for emotional distress or mental anguish that do not originate from a personal physical injury or physical sickness must be included in income, reduced by certain medical expenses related to the distress.⁠^[9] This is general information, not tax advice; see whether employment settlements are taxable.

What people commonly get wrong

• "Without a diagnosis there is no claim." Under the State Human Rights Law, medical treatment is not a precondition to recovery.⁠^[5]
• "My own word is enough, so the amount is whatever I ask for." Under the State law there must be some evidence of the magnitude of the injury, and awards are reviewed against the evidence and against similar cases.⁠^[6][7]
• "Emotional distress is capped at $300,000 in New York." That is the top tier of the federal cap, which covers compensatory and punitive damages together for employers with more than 500 employees.⁠^[2] The State statute states no dollar limit on compensatory damages, and the City court-action section sets no cap.⁠^[4][10]
• "These damages are tax-free because they are for an injury." Federal tax law excludes damages for physical injuries or physical sickness and does not treat emotional distress as either.⁠^[8]

Practical notes on keeping a record

The criteria a reviewing court may apply under the State law are concrete: the duration of the condition, its severity or consequences, any physical manifestations and any medical treatment.⁠^[6] A factual record made at the time, without exaggerating or minimizing, can cover the same ground. For example:

• dated notes of what happened at work and how they were affected at the time, such as sleep, appetite, concentration or missed events;
• the dates of any visits to a doctor, therapist or counselor, if there were any;
• the names of family members, friends or coworkers who saw the change;
• a note of when symptoms eased or ended, as well as when they began.

Accuracy matters more than volume; an honest record notes good days as well as bad ones. Anyone in distress now should seek care for its own sake; the guide to mental health conditions at work covers workplace rights, and documenting workplace harassment covers records more broadly. The full list of remedies under each law is in damages in a New York employment case.