Punitive Damages in New York Employment Cases Under Federal, State and City Law

Punitive damages are available in workplace discrimination cases under federal law, the New York State Human Rights Law (NYSHRL) and the New York City Human Rights Law (NYCHRL), but each law has its own conditions. Federal law requires malice or reckless indifference and caps the amount; the State law limits them to private employers; the City law uses a standard that the New York Court of Appeals called the lowest threshold for the state of mind required to impose punitive damages.⁠^[1][2][3][5]

The Court of Appeals describes punitive damages, under the City law, as warranted only where aggravating factors demonstrate an additional level of wrongful conduct.⁠^[6] Nothing on this page predicts whether they would be awarded in any case, or in what amount.

In the same City-law decision, the Court of Appeals said punitive damages differ from compensatory damages and represent punishment for wrongful conduct that goes beyond mere negligence.⁠^[6] For the compensatory side, see emotional distress damages and back pay, front pay and reinstatement.

The three laws side by side

Question	Federal: Title VII and ADA	New York State Human Rights Law	New York City Human Rights Law
Are punitive damages available?	Yes, for unlawful intentional discrimination.⁠[10]	Yes, in cases of employment discrimination related to private employers, for claims accruing on or after October 11, 2019.⁠[3]	Yes. The court action is for damages, including punitive damages.⁠[11]
What must be shown?	Malice or reckless indifference to the person's federally protected rights.⁠[1]	The statutory words authorizing these damages do not describe the level of misconduct required.⁠[3]	Willful or wanton negligence, recklessness, or a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.⁠[5]
Against which employers?	Not against a government, government agency or political subdivision.⁠[1]	Private employers only; not the State, local subdivisions, or state or local departments, agencies, boards or commissions.⁠[4]	The City law generally does not apply to an employer with fewer than four persons in its employ during the relevant period.⁠[12]
Is there a dollar cap?	Yes. Combined with compensatory damages: $50,000 to $300,000 per person, by employer size.⁠[2][13]	The statute sets no dollar cap on punitive damages in employment cases.⁠[3]	The court-action section sets no dollar cap.⁠[11]
Where can they be awarded?	In court; any party may demand a jury, which is not told about the cap.⁠[14]	In court and before the Division of Human Rights.⁠[3]	In a civil action in court.⁠[11] The list of remedies the NYC Commission on Human Rights orders after a hearing does not name punitive damages.⁠[15]
Does the employer's compliance effort matter?	No vicarious liability for punitive damages for a manager's decisions that are contrary to the employer's good-faith efforts to comply with Title VII.⁠[16]	The State statute's remedies provisions authorize punitive damages against private employers without addressing this point.⁠[17][3]	Prevention policies and a record of few or no prior incidents are considered in mitigation of punitive damages.⁠[18][19]

Federal law: malice or reckless indifference, inside a cap

Under the federal damages statute, a Title VII plaintiff may recover punitive damages by demonstrating that the employer engaged in a discriminatory practice "with malice or with reckless indifference to the federally protected rights of an aggrieved individual."⁠^[1] The same statute allows punitive damages for intentional discrimination under the ADA's employment provisions.⁠^[20][21]

In Kolstad v. American Dental Association (1999), the Supreme Court explained what those federal terms mean. "Malice" and "reckless indifference" refer to the employer's knowledge that it may be acting in violation of federal law, not its awareness that it is engaging in discrimination.⁠^[16] Under that federal standard, an employer must at least discriminate in the face of a perceived risk that its actions will violate federal law, and the Court said there will be circumstances where intentional discrimination does not give rise to punitive damages liability.⁠^[7]

Kolstad also limits when an employer answers for a manager's conduct. Under federal law, in the punitive damages context an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where those decisions are contrary to the employer's good-faith efforts to comply with Title VII.⁠^[16]

Three further federal limits apply:

• The cap. Federal punitive damages and compensatory damages together cannot exceed $50,000 to $300,000 per person, depending on the employer's number of employees.⁠^[2][13] The tiers are set out in the guide to the federal damages caps.
• Government employers. Federal punitive damages cannot be recovered against a government, government agency or political subdivision.⁠^[1]
• Accommodation cases. Under the ADA, compensatory and punitive damages may not be awarded where the employer demonstrates good-faith efforts, in consultation with the person who asked, to identify and make a reasonable accommodation.⁠^[22]

A federal race discrimination claim under 42 U.S.C. § 1981 is treated separately. The Supreme Court has said § 1981 relief includes compensatory and, "under certain circumstances," punitive damages, and the federal cap statute says it does not limit the relief available under § 1981.⁠^[23][24] That passage does not say what those circumstances are.

New York State law: private employers only, since October 11, 2019

The New York State Human Rights Law gives a person a cause of action in court for damages, "including, in cases of employment discrimination related to private employers and housing discrimination only, punitive damages."⁠^[17] The Division of Human Rights may also award punitive damages in cases of employment discrimination related to private employers.⁠^[3]

This is a recent rule. The employment language was added by a 2019 amendment that took effect on October 11, 2019, and it applies to claims accruing on or after that date; before then the State statute allowed punitive damages in housing cases only.⁠^[3][25][26]

Two limits are in the State statute's text:

• No government employers. Under the State law, "private employer" does not include the State or any local subdivision, or any state or local department, agency, board or commission, so punitive damages are not available under the Human Rights Law against those employers.⁠^[4]
• The housing figure is not an employment cap. The State statute limits punitive damages "in housing discrimination cases" to an amount not to exceed ten thousand dollars; it sets no dollar cap on punitive damages in employment cases.⁠^[3]

What the State statute does not supply is a test. The words that authorize punitive damages against private employers do not describe how serious the misconduct has to be.⁠^[3] The City standard described below comes from a case decided under the City law, and Kolstad interprets the federal statute; this page does not treat either one as the State standard.⁠^[5][16] What standard a court applies to a State-law claim is a question to raise with an attorney.

New York City law: the Chauca standard

The City law's court-action section provides for damages, including punitive damages.⁠^[11] In Chauca v. Abraham (2017), answering a question from the federal appeals court, the Court of Appeals held that the standard under the City law is whether the wrongdoer engaged in discrimination with willful or wanton negligence, or recklessness, or a "conscious disregard of the rights of others or conduct so reckless as to amount to such disregard."⁠^[5]

The court set that City standard between two positions:

• Not the federal test. The City standard requires neither a showing of malice nor awareness of the violation of a protected right, which the court called the lowest threshold and least stringent form of the state of mind required to impose punitive damages.⁠^[5]
• Not automatic. The court rejected the argument that a City-law plaintiff is entitled to a punitive damages charge upon any showing of liability, and said there must be some heightened standard for such an award.⁠^[6]

How an employer's prevention efforts count under the City law

Under the City law, an employer found liable solely for the conduct of an employee, agent or independent contractor may plead and prove that it had prevention policies in place and a record of no, or relatively few, prior incidents. The listed policies are a meaningful and responsive complaint-investigation procedure, a firm and effectively communicated policy, an education program, and supervision procedures directed at prevention and detection.⁠^[18]

Proof of those factors is considered in mitigation of punitive damages in court and of civil penalties at the NYC Commission on Human Rights.⁠^[19] The Court of Appeals has said that even where mitigation applies under the City law, compensatory damages, costs and reasonable attorneys' fees are still recoverable.⁠^[27] It has also said these provisions apply only to an employer's vicarious liability once the punitive damages standard has been met.⁠^[6]

The City law has a further provision: if the Commission establishes prevention policies and programs by rule, an employer that proves it implemented and complied with them is not liable for civil penalties or punitive damages for the conduct of an employee, agent or contractor.⁠^[28] The guide to employer liability for supervisors and coworkers covers when the employer is responsible in the first place, and policy and training requirements covers what employers have to put in place.

Civil fines and penalties are not punitive damages

Agencies can impose money penalties that look similar but go to the government. Under the State law, the Division may assess civil fines of up to $50,000, or up to $100,000 where the act is found to be willful, wanton or malicious, paid to the State.⁠^[8] A State civil penalty is stated separately and does not reduce or offset any damages.⁠^[29]

Under the City law, the Commission may impose a civil penalty of up to $125,000, or up to $250,000 where the practice resulted from a willful, wanton or malicious act.⁠^[30] City civil penalties are paid into the City's general fund.⁠^[9] The City law's list of remedies in a Commission order names back pay, front pay and compensatory damages, among others, but does not name punitive damages; the list is introduced by the words "including, but not limited to."⁠^[15] The agency processes are described in the Division's investigation and hearing and the City Commission's complaint process.

Punitive and similar remedies in New York's Labor Law retaliation statutes

New York's whistleblower statute, Labor Law § 740, lets a court order the employer to pay punitive damages if the violation was willful, malicious or wanton, and separately allows a civil penalty of up to $10,000.⁠^[31] Health care employees enforce Labor Law § 741 through the same remedies.⁠^[32]

Labor Law § 215, which covers retaliation for complaints about Labor Law violations, uses liquidated damages instead: an amount of not more than $20,000, which the court awards to every aggrieved employee in addition to other remedies.⁠^[33] See Labor Law § 740 and retaliation for wage complaints.

What people commonly get wrong

• "The State law has no punitive damages." It has allowed them against private employers for claims accruing on or after October 11, 2019.⁠^[3]
• "State punitive damages are capped at $10,000." That figure is the State statute's limit for housing discrimination cases.⁠^[3]
• "Under the City law punitive damages require malice," or "they follow from any violation." Neither is the City rule: malice is not required, and a heightened standard still has to be met.⁠^[5][6]
• "Punitive damages are tax-free." The IRS states that punitive damages are taxable.⁠^[34]

The full list of remedies under each law is in damages in a New York employment case.