Over the next two weeks we will release our Year in Review segment, which will look at the key labor & employment law developments from 2016 in New York, the DC Metro Area, Massachusetts, and California while offering our thoughts about 2017.  Today we kick off this segment with New York.  In addition, please join us in NYC on April 6, 2017 for Mintz Levin’s Third Annual Employment Law Summit as we address some of the key labor & employment issues impacting employers in 2017.  Register here

2016 brought big changes for New York State and City employers, including expansive new discrimination protections and substantial increases in the minimum wage and exempt salary thresholds.  While New York employers who successfully navigated 2016’s rush of legislative, regulatory and judicial obstacles might feel they’ve earned the right to shift their focus back from compliance issues to running their businesses, they should not lose sight of the additional challenges expected in 2017.

New York State Women’s Equality Agenda

Governor Cuomo signed a series of bills entitled the “Women’s Equality Agenda,” which took effect in January 2016 and significantly amended the State’s equal pay, sex discrimination, harassment and other laws.  In a post published shortly after the amendments passed, we described in detail some of the sweeping changes the law ushered in, including:

  • broadening the definition of “equal work” for equal pay;
  • adding “familial” status as a protected class;
  • requiring additional accommodations for pregnant workers;
  • authorizing treble damages for willful violations;
  • providing sex discrimination plaintiffs with a new right to attorneys’ fees; and
  • applying the law’s prohibition on sexual harassment to all employers regardless of size.

Additionally, while New York law still permits pay differentials between men and women for seniority, merit and factors “other than sex,” it limits this last requirement to “a bona fide factor other than sex, such as education, training or experience,” and requires any differential to be job related and consistent with business necessity.  Moreover, the law requires pay equity among women and men working in the “same establishment” – defined as a geographical region no larger than a county – and, therefore, employers with multiple operations in Manhattan or other counties should ensure that pay practices are fair and equitable not just within, but across, each location in these respective regions.

Finally, the law imposes restrictions on employer policies that limit the discussion of wages in the workplace. Further, as we discuss here, the New York DOL recently issued regulations clarifying that such policies may not be overly restrictive and that employees who are subject to them must receive written notice.

Establishment of New York City Office of Labor Policy and Standards

Last year New York City also established an Office of Labor Policy and Standards (OLPS) tasked with enforcing the City’s paid sick leave and transit benefits laws and promoting worker education and safety programs. As we discussed on the blog, the transition of enforcement responsibilities from the Department of Consumer of Affairs to the OLPS is a significant development given the OLPS’ singular focus on protecting workers’ rights.

Mintz Levin is especially honored to have OLPS Deputy Commissioner Liz Vladeck as the keynote speaker at our Third Annual Employment Law Summit coming up on April 6.  This year’s summit promises to be an exceptional event, including a wide range of compelling speakers and important topics and we encourage our readers to attend.

New York State Minimum Wage and Exempt Salary Threshold Increases

Effective December 31, 2016, the New York Department of Labor amended the State’s Wage Orders to significantly increase the minimum wage and the minimum salary thresholds for exempt workers.  In addition, as we noted in a post when the amendments took effect, the amendments also provide for automatic annual increases of the minimum wage and exempt salary thresholds in future years and establish different minimum pay requirements depending on whether the employees are located in New York City, downstate or the remainder of the state.

Further, the amendments affected other wage-related items, such as the Hospitality Wage Order’s schedule for cash wages and tip credit thresholds for tipped food service employees, and changes to meal and lodging credits and uniform allowances.  At a minimum, employers should update their wage statements to reflect the new rates and other required information and update their minimum wage posters.  Further, employer should review their exempt executive and administrative employees’ weekly salaries to determine whether they need to be increased to meet the new thresholds.

Second Circuit Rejects Double Liquidated Damages Awards for FLSA/NYLL Claims

In December 2016, the Second Circuit issued a welcome decision for employers when it held that employees who recover back wages under the FLSA and the New York Labor Law are not entitled to separate liquidated damages awards under each statute. Both the FLSA and the NYLL permit employees to recover liquidated damages in an amount equal to their unpaid wages.  New York district courts were previously divided as to whether employees who sue under both statutes can recover double the amount of their unpaid wages as liquidated damages based on the separate liquidated damages provisions.

Fortunately for employers the Second Circuit rejected the plaintiff’s claim for double liquidated damages, explaining that the legislative history of the 2009 amendment to the NYLL demonstrated that the New York State Legislature intended to “conform” the NYLL’s liquidated damages provision to the FLSA’s provision rather than to provide for recovery of 200 percent liquidated damages in addition to the underlying wage liability. The court noted that double recovery is generally disfavored when another source of damages already remedies the same injury for the same purpose and concluded “[h]ad the New York State legislature intended to provide a cumulative liquidated damages award under the NYLL, we think it would have done so explicitly.” While New York employers should breathe a sigh of relief that they will not be on the hook for double liquidated damages in the event of a wage and hour violation, they should not lose sight of the fact that the damages in these matters can still be quite substantial.

New York City Freelance Workers Protection Act

In November 2016, Mayor de Blasio signed the Freelance Isn’t Free Act, which provides protections for individuals who enter into agreements to provide freelance services after May 15, 2017.  The Act defines “freelancer” as “any natural person or any organization composed of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services in exchange for compensation.”  However, it excludes certain sales representatives, lawyers, and licensed medical professionals.

As discussed on the blog, under the new law contracts with freelancers for services in excess of $800 must be in writing and must contain: (i) the names and mailing addresses of the parties; (ii) an itemized listing of all services contracted for; (iii) the value of the services to be provided; (iv) the rate and method of compensation; and (v) the date on which the hiring party must pay the contracted amount of compensation or the mechanism by which such date will be determined.  Significantly, the Act also protects freelancers from retaliation by prohibiting hiring parties from intimidating, denying work opportunities to or discriminating against freelancers who seek to exercise their rights under the Act and authorizes the recently-established Office of Labor Standards to enforce these protections.

New York City Caregiver Protections

In May 2016, amendments to the New York City Human Rights Law took effect adding “caregiver” as a protected class under the law.  The law defines “caregiver” as a “person who provides direct and ongoing care for a minor child or a care recipient” and prohibits discrimination against such individuals.

As we previously discussed, notwithstanding the New York City Commission on Human Rights’ guidance on the new law, the specific accommodations City employers may be required to make for caregivers are not entirely clear and will likely be developed on a case-by-case basis. However, the Commission has indicated that employers are not required to change an employee’s shift or allow the employee to leave work early just because they have caregiving responsibilities, unless the employer offers these benefits to employees who do not have caregiving responsibilities.

New York State Paid Family Leave Law

New York’s Paid Family Leave Act, which becomes effective January 1, 2018, will provide employees with paid leave for up to 12 weeks to: (i) care for a family member with a serious health condition; (ii) bond with the employee’s newborn or newly adopted child; and (iii) address any qualifying exigency related to a spouse, domestic partner, child, or parent who is serving on active military duty. Additionally, employees are entitled to return to the same or similar position upon returning from leave. The Paid Family Leave Act’s protections track closely with the Federal FMLA, but cover a broader group of employees than the FMLA.  This will largely impact employers with fewer than 50 employees who are not subject to the FMLA, but will be required to provide benefits under the Paid Family Leave Act.  As we discussed here, however, the Paid Family Leave Act does not require any new financial contributions from employers; instead, it will be funded entirely through employee taxes.

On February 22, 2017, proposed regulations implementing the Paid Family Leave Act were published clarifying certain aspects of the law and how it will be implemented.  Some key takeaways of the proposed regulations are discussed here.  The full text of the regulations can be fund here.

New York City Legislation to Prohibit Inquiries Into Salary History

In August 2016, the New York City Council introduced a bill which would prohibit employers from making inquiries with regard to a prospective employee’s salary history, which is similar to the law New York State passed earlier in 2016. This prohibition would apply during all stages of the employment process. Additionally, if the employer is already aware of the applicant’s salary history, under the proposed law the employer cannot rely on that information to determine the applicant’s salary going forward.

New York City Legislation to Ban On-Call Scheduling For Retailers

In December 2016, the New York City Council introduced Int. No. 1387, which would ban the practice of “on-call scheduling” for retail employees, meaning, that employers would be prohibited from: (i) scheduling a retail employee for “on-call” hours; (ii) canceling any scheduled hours of work for a retail employee within 72 hours of the start time; and (iii) requiring a retail employee to contact an employer to confirm whether or not the employee should report for work fewer than 72 hours before their start time. Additionally, an employer may not provide a retail employee less than 20 hours of work during any 14-day period (offset by hours an employee elects to take as leave). This bill continues the trend towards protecting retail workers’ rights as several large retailers have already announced they have stopped the on-call scheduling practice.  Similar legislation was introduced for fast food workers, which we discuss further below.

New York State Payroll and Debit Card Rules

In August 2016, the New York State Department of Labor issued new regulations, which were scheduled to take effect in March 2017, that created new notice and consent requirements for employers who use payroll debit cards and direct deposit to pay wages.  As we discussed in this blog entry, under the  proposed regulations employers who utilize payroll debit cards would have been required to provide local access to ATMs that offer free withdrawals, provide a method for employees to withdraw all wages without incurring a fee and avoid charging employees for items such as point of sale transactions, overdrafts, account inactivity, customer service and card replacement. The rules also prohibited linking payroll debit cards to any form of credit, including a loan or cash advance against future pay.

Although the rules did not apply to employees working in a bona fide executive, administrative, or professional capacity with earnings in excess of $900 per week, they included several notice requirements for covered workers. These included the obligation to notify employees at least 30 days before the effective date of any changes in the terms and conditions of payroll debit cards, such as changes in the itemized list of fees. We discussed the DOL’s template notice forms and other details in a recent post here.

Notwithstanding this comprehensive new regime for protecting low wage workers from costly fees that reduce net pay, the New York State Industrial Board of Appeals has invalidated and revoked the new payroll and debit card regulations, as we explained in a recent post. According to the Board, the DOL exceeded its authority by devising regulations that extend beyond employment and occupational safety and health into banking law, and unnecessarily sought to address concerns for which Section 192 of the Labor Law already provides protections. While employers do not need to implement changes to comply with the regulations at the present time, they should stay tuned to the blog for any new developments, such as an appeal reversing the Board’s decision.

New York City Legislation to Protect Fast Food Workers

In December 2016, the New York City Council introduced several bills which would expand the rights of fast food workers. These bills propose several new protections for fast food workers, including:

  •  No. 1388 would prohibit fast food employers (without written consent) from requiring fast food employees to work back-to-back shifts when the first shift closes and the second shift opens the restaurant the next day with fewer than 11 hours in between.
  •  No. 1395 would require fast food employers with available work hours to offer shifts to existing employee before hiring new employees.
  •  No. 1399 would provide an interactive process which would allow fast employees to request modification of work arrangements without fear of retaliation.
  •  No. 1396 would require fast food employers to provide employees with an estimate of their work schedules upon hire and 14 days in advance. A premium would need to be paid for schedule changes made by the employer on less than 14 days’ notice.
  •  No. 1384 would allow fast food employees to designate part of their salary to a not-for-profit of their choice.

We continue to monitor this legislation.

New York State Legislation to Prohibit Discrimination Against Domestic Violence Victims

Finally, just after the New Year, on January 4, 2017, the New York State Senate introduced a bill which would make it an unlawful discriminatory practice for an employer or licensing agency, because of an individual’s status as a victim of domestic violence, to refuse to hire, employ or license the individual, to bar or discharge the individual from employment or to discriminate against the individual in compensation or terms, conditions or privileges of employment. Additionally, the bill provides that it shall be an unlawful discriminatory practice for an employer to refuse to provide reasonable accommodations to an employee who is known to be a victim of domestic violence.  Similar versions of the bill have been introduced in previous legislative sessions and New York City has already enacted similar protections.

Takeaways

Employers in New York and New York City, like those in California and other areas with highly active and progressive state and local legislatures, typically face a more heavily regulated environment than employers in other U.S. regions.  Although the constantly evolving patchwork of new laws and regulations can seem burdensome, many New York and New York City employers have become more accepting of the need to remain current on changes in the law and to be flexible in adapting to new compliance challenges.  If the developments of 2016 and early 2017 are any indication, this need for flexibility will only increase as the benefits of doing business in one of the nation’s most commercially attractive regions continues to come with the cost of adjusting to new governmental and regulatory burdens.