August 10, 2015

Prohibitions on Credit Checks and Pre-Employment Criminal Background Checks Soon to go Into Effect

The New York City Council recently passed two laws that significantly affect hiring practices of New York City employers.  On October 27, 2015, the Fair Chance Act ("FCA"), which prohibits pre-employment inquiries into an applicant's conviction or arrest history, will go into effect.  On September 3, 2015, the Stop Credit Discrimination in Employment Act ("SCDEA") will go into effect, barring employers from conducting credit checks on applicants under most circumstances.  A previous blog post discussing both laws when they were pending bills can be found here. 

The FCA

Under the Fair Chance Act, an employer must extend a conditional job offer before asking about or searching public records or consumer reports for an applicant's arrest or conviction history.  If, after extending a conditional job offer, an employer decides to take an adverse employment action based on a criminal inquiry, before taking the adverse action, the employer must provide the applicant with a written copy of the criminal inquiry as well as a written analysis pursuant to New York Correctional Law Section 23A in a form to be determined by the Commission of Human Rights, which includes supporting documentation.  The applicant must have at least three business days to respond, during which time the position must remain open.  The FCA also prohibits employers from using job advertisements that limit who can apply based on a person's previous arrest or conviction history.

The FCA does not apply to those employers who are legally required to conduct a criminal history search or when hiring for certain positions such as police officers, peace officers or those working in law enforcement.  The FCA does allow for a private cause action, and it no longer includes a minimum of $1,000 in damages liability, which was included in the initial bill. 

The SCDEA

The recently enacted Stop Credit Discrimination in Employment Act prohibits employers from requesting or using an applicant's or employee's "consumer credit history" in making employment decisions.  The SCDEA defines "consumer credit history" as "an individual's credit worthiness, credit standing, credit capacity, or payment history, as indicated by: (a) a consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual regarding (1) details about credit accounts, including the individual's number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or (2) bankruptcies, judgments or liens."  It also includes "any written or other communication of any information by a consumer reporting agency that bears on a consumer's creditworthiness, credit standing, credit capacity or credit history." 

The SCDEA has a limited number of exceptions that allow credit checks to be conducted on employees or applicants for certain positions, such as police officers, or where employers are required by law (including §  3(a)(26) of the Securities Exchange Act of 1934) to inquire into the individual's credit history.  One notable exception to the Act allows credit checks to be conducted on individuals applying for or employed in a position with authority over third party assets or funds valued at $10,000 or more, or who are authorized to enter into financial agreements valued at $10,000 or more.  Other exceptions under the Act allow credit checks for non-clerical positions with regular access to trade secrets, and for positions with regular duties that include modifying digital security systems established to protect the employer's networks or databases.  The SCDEA does not affect an employer's ability to conduct criminal background checks.   

Employers should review and revise their hiring policies and practices to ensure they are compliant with these two laws.

This post was authored by Matt Lampe, Emilie Hendee, and Sharon Cohen of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

May 1, 2015

PROPOSED MINIMUM WAGE INCREASES ACROSS NEW YORK STATE

Keeping in line with the national trend, New York lawmakers in Albany have proposed two significant raises to statewide minimum wage requirements, which will go into effect as early as December 31, 2015.

First, in his State of the State Address on January 28, 2015, Governor Andrew Cuomo proposed an increase to the state's minimum wage, which would raise it to $10.50 per hour by the end of 2016. An even higher hourly minimum wage of $11.50 was suggested for employees in New York City, to reflect the higher cost of living in the metropolitan area. This proposal functions as a compromise to exasperated New Yorkers without overturning longstanding precedent that prohibits municipalities in New York State from setting local wages above the state minimum. See Wholesale Laundry Board of Trade, Inc. v. New York, 17 A.D.2d 327, 329-30 (1st Dep't 1962).

Second, on February 24, 2015, the New York State Commissioner of Labor Mario J. Musolino adopted resolutions set forth by the Department of Labor's Wage Board that will significantly increase the wages and rights of tipped workers across the state. Most prominent among these was the resolution to increase the minimum wage for tipped employees to $7.50 per hour, effective December 31, 2015, and $8.50 per hour for tipped workers in New York City, contingent upon the State Assembly's adoption of a distinct wage for the City. Commissioner Musolino also adopted a recommendation to eliminate distinctions between tipped workers within the hospitality industry. Effective December 31, 2015, food service employees, service employees, and service employees in resort hotels will be treated equally under the Labor Law. The Commissioner rejected the Wage Board's recommendation that employers of tipped workers should be subject to enhanced tip credits, citing incongruity with the Wage Board's desire to simplify the regulations and rejecting the underlying assumption that tip allowances are a penalty rather than a substantive right to pay.

If and when these changes go into effect, New York State and New York City will become leaders in the nationwide Living Wage movement. The current statewide minimum wage is $8.75 per hour, and is set to increase to $9.00 per hour on December 31, 2015.

"Written by Kerry C. Herman, Associate at Sapir Schragin LLP. The views and opinions expressed herein are the author's own and do not reflect those of Sapir Schragin LLP."

March 3, 2015

UPDATE: Bill Eliminating New York's Annual Wage Notice Requirement Takes Effect

On February 27, 2015, 60 days after Governor Cuomo signed it, a bill (A08106C / S05885-B) became effective that amends the New York Wage Theft Prevention Act to eliminate the annual wage notice requirement.  This means that moving forward, employers do not have to distribute annual wage notices to all employees.

 

The newly-effective law also increases penalties for certain violations of the New York wage law.  More details on these changes can be found in our previous post by clicking here.  Employers should evaluate any revisions that might be needed to their practices in light of this amendment.  

 

This post was authored by Matt Lampe, Emilie Hendee, and Laura Jean Eichten of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

 

October 19, 2014

New York City Council Considers Legislation Limiting Inquiries into Applicants' Criminal and Credit Histories

Currently pending before the New York City Council (the "Council") are two bills that could significantly affect hiring processes utilized by New York City employers.  The proposed Fair Chance Act and the Stop Credit Discrimination in Employment Act would restrict what employers may inquire about regarding job applicants' criminal and consumer credit histories.  If passed, the bills would require employers to review and potentially revise their hiring practices, including the use of criminal background searches and credit checks. 

           

Introduced in April 2014, the Fair Chance Act (the "FCA"), which has been described as "ban-the-box" legislation, would amend the New York City Human Rights Law (the "NYCHRL") to prevent pre-employment inquiries into an applicant's conviction or arrest history.  The New York Correction Law § 23-A currently requires employers to conduct a multi-factor analysis before refusing to hire an applicant based on his or her criminal history.  This analysis considers, among other things, any bearing the criminal offense would have on the applicant's fitness or ability to perform the duties related to the position, the time that has elapsed since the offense, the applicant's age at the time of the offense, the seriousness of the offense, any information produced on behalf of the applicant relating to his or her rehabilitation and good conduct, and the employer's legitimate interest in protecting property and the safety and welfare of specific individuals or the general public.  The employer may only refuse to hire an applicant based on his or her criminal conviction if there is a direct relationship between the prior criminal offense and the specific job sought, or if hiring the individual would pose an unreasonable risk to property or others' safety.

           

The FCA extends these protections by requiring that employers first deem an applicant qualified for a job and make a conditional job offer before inquiring into an applicant's criminal history or conducting any criminal history search.  The bill defines "inquiries" to include questions in a job application or in a standalone document, searches of publicly available records or consumer reports, or even mentioning that a background check will be required.  However, employers who are legally required to conduct a criminal history search may inform applicants that the job is subject to a background check and that the employer is prohibited from employing individuals with certain criminal convictions.

           

The FCA also provides that if an employer intends to take an adverse employment action based on a criminal inquiry, it must provide the applicant with a written copy of the criminal inquiry and the multi-factor analysis the employer is required to conduct.  The applicant must then be provided a minimum of seven business days to respond, during which time the position must remain open.  Once the response time has lapsed, the employer no longer needs to wait for an answer.  An employer who violates these new requirements could be liable for a minimum of $1,000 in damages and is presumed to have engaged in unlawful discrimination, which can only be overcome with "clear and convincing evidence" demonstrating otherwise.  Further, an applicant may not be disqualified from prospective employment based on a response to an unlawful inquiry or statement under the FCA.  Employees who claim that their rights have been violated under the FCA would be entitled to a private cause of action.

 

Also pending before the Council is the Stop Credit Discrimination in Employment Act (the "Act"), which would amend the NYCHRL to prohibit employers from requesting or using for employment purposes information contained in an applicant's consumer credit history or to retaliate or otherwise discriminate against an applicant based on the applicant's credit history.  The Act defines "consumer credit history" as "any information bearing on an individual's credit worthiness, credit standing, or credit capacity, including but not limited to an individual's credit score, credit account and other consumer account balances and payment history."  However, the Act would not apply to employers that are required under state or federal law to use an individual's consumer credit history for employment purposes.

 

Employers should monitor the Council's legislative activity on both bills and, if they are passed, review and revise hiring policies and practices.

 

This post was authored by Matt Lampe, Emilie Hendee, and Sharon Cohen of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

September 6, 2014

NLRB: Employees' Paid Sick Leave Campaign Protected

The National Labor Relations Board in MikLin Enterprises, Inc., 361 N.L.R.B. No. 27 (8/21/14), ruled that the employer, a franchisee of the Jimmy John's sandwich shops, violated the National Labor Relations Act by disciplining employees for participating with the Industrial Workers of the World in a publicity campaign to obtain paid sick leave. The campaign involved placing posters in and near the employer's stores that displayed side-by-side pictures of two sandwiches with one described as being made by healthy worker and the other by a sick worker. The posters stated further: "Can't Tell the Difference? That's too bad because Jimmy John's workers don't get paid sick days. Shoot, we can't even call in sick. We hope your immune system is ready because you are about to take the sandwich test . . . . Help Jimmy John's workers win sick days." In concluding that the employees were engaged in protected activity under the Act, the Board cited that the posters were "directly linked to an ongoing labor dispute" and "did not constitute disloyalty or reckless disparagement as previously defined by Board and court precedent."


http://www.nlrb.gov/cases-decisions/weekly-summaries-decisions/summary-nlrb-decisions-week-august-18-22-2014

September 5, 2014

OFCCP Issues Directive Clarifying Sex-Based Discrimination Under E.O. 11,246

On August 19, 2014, the U.S. Department of Labor's Office of Federal Contract Compliance issued Directive 2014-02 clarifying the scope of Executive Order 11,246's prohibition of sex-based discrimination as including discrimination based on gender identity or transgender status. The directive confirms in this regard that the OFCCP will follow the Equal Employment Opportunity Commission's ruling in Macy v. Holder, 2012 WL 1435995. According to the OFCCP, however, the directive does not address gender identity as a "stand-alone protected category," which, along with sexual orientation is the subject of Executive Order 13,672.

http://www.dol.gov/ofccp/regs/compliance/directives/dir2014_02.html

NLRB: Back Pay For Unlawful Reduction in Hours Not Subject to Offset for Interim Earnings

On August 25, 2014, the National Labor Relations Board, in Community Health Services, Inc., 361 N.L.R.B No. 25, reaffirmed that the back pay ordered to remedy the employer's unlawful reduction in hours is not subject to offset based upon the employees' interim earnings from other employment. In 2004, the Board found that the employer had violated the Act by reducing working hours for its respiratory department employees without bargaining with the union that represented them. It ordered the employer to remedy that violation by making the employees whole for the lost earnings and benefits resulting from this unilateral change, which were to be computed in accordance with its holding in Ogle Protection Service, 188 N.L.R.B. 682 (1970), enfd., 444 F.2d 502 (6th Cir. 1971). On December 20, 2011, the District of Columbia Circuit remanded the case to the Board for a more thorough analysis of the interim earnings issue.

On remand, the Board concluded that the standard established in Ogle Protection Service, should continue to govern the calculation of back pay in cases that do not involve a cessation of employment. The Board reasoned that in such cases, "permitting the employer to deduct those interim earnings from back pay owed, rather than permitting the employee to enjoy the full benefit of them, would represent an unwarranted windfall to the employer and discourage compliance with the law." Applying the Ogle Protection Service back pay formula in this manner, the Board explains, "falls well within the permissible bounds of the Board's broad remedial discretion and effectuates important statutory policies recognized by the Supreme Court."

http://op.bna.com/dlrcases.nsf/id/ldue-9ndp4c/$File/Community825.pdf


August 29, 2014

NLRB: Used Car Salesman's Profanity-Laced Outburst Did Not Cost Him Protection of the Act

On remand from the Ninth Circuit, the National Labor Relations Board, in Plaza Auto Center, Inc., 360 N.L.R.B. No. 117 (May 28, 2014), reaffirmed that the employee, a used car salesman, did not lose the protection of the National Labor Relations Act due to his profane and derogatory remarks to the owner while making concerted complaints regarding compensation practices. The employee's remarks included, among others, calling the owner a "fucking mother fucking," a "fucking crook," and an asshole." The Ninth Circuit directed the Board to rebalance its four-factor Atlantic Steel analysis based upon its finding that the nature-of-the-outburst factor weighed against protection. On review, the Board concluded that even accepting the court's determination, the nature-of-the-outburst factor was substantially outweighed in favor of protection by the other three factors, which are: (1) the location of the discussion; (2) the subject matter of the discussion; and (3) employer provocation by unfair labor practices.

In dissenting, Board Member Harry Johnson stated that the majority erred in implying that vulgarity in the workplace is common. He remarked, "The Board is out of touch here. The reality of the modern workplace is that employees do not typically curse each other and their superiors like characters in a Scorsese film."

http://www.nlrb.gov/case/28-CA-022256


EEOC Issues New Enforcement Guidance On Pregnancy Bias


On July 14, 2014, the Equal Employment Opportunity Commission, by a 3-2 vote, approved the issuance of new enforcement guidance under the Pregnancy Discrimination Act ("PDA"). In doing so, it updated a 1983 EEOC Compliance Manual Chapter concerning the PDA.

The guidance addresses, among other matters, the accommodations that employers must provide pregnant workers under the PDA, as well as the ADA. In particular, it states that the PDA requires employers to offer light duty to pregnant employees if they do so for non-pregnant employees who are similar in their ability or inability to work.

The Supreme Court will be addressing that issue in Young v. United Parcel Service, Inc., when it reviews the Fourth Circuit's ruling that the PDA does not require employers to offer light duty to pregnant employees with work restrictions even if light duty is available for certain categories of non-pregnant employees. The employer in that case, UPS, granted light duty accommodations to employees with work restrictions that stemmed from on-the-job injuries, but did not extend light duty assignments to employees, with non-work related medical conditions.

http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm


http://www.eeoc.gov/laws/guidance/pregnancy_qa.cfm

http://www.eeoc.gov/eeoc/publications/pregnancy_factsheet.cfm

August 1, 2014

State Lawmakers Pass Bill to Eliminate Annual Wage Notice Requirement

As of June 19, 2014, both the New York State Assembly and the New York State Senate voted to pass a bill (A08106C / S05885-B) to amend the New York Wage Theft Prevention Act to eliminate the annual wage notice requirement (the "Bill").  The Bill will become law if signed by Governor Andrew Cuomo. 

Under the current law, New York employers are required to provide all employees with an annual wage notice before February first of each year, which includes information about the employee's rate of pay and the employer.  The Bill would eliminate this annual notice requirement for employers as long as the same information is provided at the time of hire. The Bill does not change the existing requirements to provide wage notices at the time of hire and/or where changes to employee pay are made.  

In addition to eliminating the annual wage notice requirement, the Bill would increase penalties for certain violations of the New York wage law.  Specifically, employers who fail to provide a wage notice within ten business days of a new employee's first day of work, or fail to provide a wage statement as required by the law, would incur damages of $50 per day (previously $50 per week), up to a total amount of $5,000 (previously $2,500).  An employer who is found to have retaliated against an employee in violation of the wage law could incur a civil penalty of up to $20,000 (previously $10,000). 

Additionally, the bill requires employers who have previously committed wage theft, or whose violation is willful or egregious, to report certain employee and wage data to the Commissioner of Labor to be published online.  The bill makes clear, however, that employers should not report or otherwise disclose individual identifying information of employees.  The bill makes it harder to avoid liability via restructuring by making "an employer similar in operation or ownership to a prior employer who had previously committed wage theft" liable for acts of the prior employer.  It also places increased burdens on contractors found liable for wage violations and sets up a Wage Theft Prevention Enforcement Account to help fund the administration and enforcement of the Wage Prevention Theft Act.

Employers should monitor the Bill and, if and when it is signed by Gov. Cuomo, take steps to adjust their payroll practices accordingly.  

This post was authored by Matt Lampe, Emilie Hendee, and Laura Jean Eichten of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.