On October 13, 2022, the First Department issued a decision in Molnar v. Greentech Capital Advisors, L.P., 2022 NY Slip Op. 05757, holding that equity-based compensation did not constitute “wages” within the meaning of Labor Law § 190(1), explaining:
Plaintiff failed to state a claim for violation of article 6 of the Labor Law, as her equity-based compensation did not constitute “wages” within the meaning of Labor Law § 190(1). The ultimate value of plaintiff’s equity-based compensation was contingent on the company’s future market value, and thus, was dependent, at least in part, on the financial success of the business enterprise. As a result, the compensation that plaintiff seeks to recover is a form of incentive compensation in the nature of a profit-sharing arrangement. However, Labor Law article 6 contemplates an entirely different type of compensation — that is, compensation directly related to an employee’s individual performance, as distinct from compensation based on the performance of the entire business enterprise.
(Internal citations omitted).