January 27, 2017

Prepare Now for NYC Freelancer Law

New York City's first-of-its-kind law establishing protections for freelancer worker compensation will take effect May 15, 2017, but employers can prepare now to comply with the law's requirements. Signed by Mayor Bill de Blasio on November 16, 2016, the Freelance Isn't Free Act (the "Act") requires all agreements for freelance work of a value of at least $800 to be in the form of a written contract. The Act also requires full compensation for the services to be paid by a date specified in the contract, or within 30 days after completion of the services.

Employers can take various steps now to ensure they are compliant with the Act prior to its May 15, 2017 effective date:

• Employers should determine which engagements fall under the Act's written contract requirement. Directed towards the growing "gig-industry," the Act broadly defines freelance workers as any person (or organization consisting of only one person) hired or retained as an independent contractor to provide services in exchange for compensation. Sales representatives, licensed lawyers and medical professionals are specifically excluded from the scope of the Act. The Act requires a written contract for any single project with a freelance worker valued at least $800 or for any cumulative work by a freelance worker valuing $800 or more over a four-month period.

• Employers should create, or review, their contract template to ensure compliance with the Act's requirements. Under the Act, each written contract must include, at a minimum, the name and mailing address of both parties, an itemization of all services to be provided by the freelance worker, the value of the services to be provided, the rate and method of compensation, and the date on which compensation must be paid.

• Employers should ensure that proper payment mechanisms are in place to ensure timely payment under the Act. If the contract does not provide for a due date of the compensation, compensation must be paid no later than 30 days after the completion of the freelancer's services. These requirements are similar to those for commission plans required for commissioned sales representatives under Article 6 of the New York State Labor Law.

• Finally, employers should train their human resources professionals, as well as those involved in procurement, as to the Act's requirements and prohibitions. Employers should be particularly mindful that the Act prohibits retaliation, including any action that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, exercising or attempting to exercise any right guaranteed by the Act.

Non-compliance could expose an employer to liabilities. The Act provides a private cause of action for aggrieved freelancers to seek the following damages:

• Double damages, injunctive relief and other such remedies as may be appropriate for not being fully paid on time; and/or

• Statutory damages (equal to the value of the underlying contract for lack of written contract and/or each instance of retaliation; amounting to $250 if solely a lack of written contract is alleged, upon proof that a written contract had been unsuccessfully requested by the freelancer); and

• Reasonable attorney's fees and costs.

The Act also establishes a complaint procedure to be administered by the Director of the City's Office of Labor Standards ("OLS"). Upon receipt of a complaint under this procedure, OLS will notify the hiring party, which then has 20 days to respond with either (i) proof that the freelancer has been paid in full; or (ii) the reasons for non-payment. OLS does not have jurisdiction to adjudicate the complaint. However, OLS will advise the freelancer of his or her right to bring an action and refer the freelancer to a "navigation program" designed to apprise freelancers of resources available to assist them in their complaint.

Furthermore, where OLS determines reasonable cause exists to believe that a hiring party is engaged in a pattern or practice of violations of the Act, the City's Corporation Counsel may commence a civil action in court on behalf of the City. The Act provides for civil penalties of up to $25,000 for pattern and practice violations.

This post was authored by Matt Lampe, Martin Schmelkin, Justin Martin, and Remo Decurtins 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.

Governor Cuomo Signs Executive Orders Concerning Salary Issues

New York Governor Andrew Cuomo has unveiled his annual State of the State proposals for 2017, which include new salary reporting requirements for state contractors, a prohibition on salary history inquiries to job applicants by state agencies, and proposed legislation aimed at punishing wage theft, among other initiatives.

Executive Order 162, signed by Governor Cuomo on January 9, 2017, will require state contractors and subcontractors to report job title and salary data for all employees working on state contracts, in addition to the data on gender, race, and ethnicity that is currently required. If an employer cannot identify the individuals working directly on a State contract, it will be required to report such information for its entire workforce. State agencies and authorities are required to include provisions mandating such reporting in all contracts, agreements, and procurements issued and executed on or after June 1, 2017. Executive Order 162 requires monthly reporting on all contracts in excess of $100,000 and quarterly reporting all contracts in excess of $25,000. The form of these reports, and the manner for reporting, has been delegated to the New York State Department of Economic Development, which will be issuing regulations pursuant to this Executive Order.

Governor Cuomo's issuance of Executive Order 162 comes on the heels of the September 2016 amendments by the United States Equal Employment Opportunity Commission to the Employer Information Report (or "EEO-1"). The new EEO-1 would require employers with 100 or more employees and government contractors with at least 50 employees and a contract of at least $50,000 to report summary pay data in aggregate form according to a set of pay bands starting in March 2018.

Under a separate Executive Order also signed by Governor Cuomo on January 9, 2017 (Executive Order 161), state agencies are prohibited from inquiring about or relying on a job applicant's salary history until a conditional offer of employment has been made. The announcement is the latest in an emerging trend in cities and states to prohibit or restrict salary inquiries. Governor Cuomo's Executive Order, which applies only to State agencies, suggests he will support S.24, a state bill introduced in January that would prohibit salary inquiries by private employers. New York City Mayor Bill de Blasio executed a similar measure in November 2016 prohibiting salary inquiries by City agencies. The New York City Council, with Mayor de Blasio's support, is also expected to pass legislation prohibiting such inquiries by private employers.

Governor Cuomo also announced legislation targeting wage theft. One bill would hold the top ten shareholders of out-of-state limited liability companies ("LLCs") personally liable for wage theft claims, extending an existing law that applies to in-state LLCs and both in- and out-of-state corporations. According to Cuomo, the legislation is intended to provide relief for claimants seeking damages from bankrupt companies. Governor Cuomo also announced legislation to "empower the Labor Commissioner to directly enforce all wage liabilities on behalf of workers with unpaid wage claims" but did not provide further details.

Finally, Governor Cuomo announced legislation that would require the state to give preference to American-made goods and products in any new procurement contracts of $100,000 or more. To qualify as "American-made" under the Governor's proposal, "end manufacturing processes should take place in the United States and more than sixty percent of the components of the manufactured good should be of domestic origin."

Governor Cuomo's Executive Orders and announcements are another sign of a continuing trend by federal, state and local jurisdictions focusing on compensation related issues. State contractors in particular should be cognizant of the new reporting requirements, which will likely be more burdensome and take effect sooner than their Federal counterparts.

This post was authored by Matt Lampe, Martin Schmelkin, and Michael Casertano 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.

January 4, 2017

New York City, State Consider Bans on Salary History Inquiries

New York City is poised to adopt legislation that would prohibit employers from asking about a prospective employee's salary history and New York State may follow suit, reflecting an emerging trend in cities and states across the country.

Pending before the New York City Council (the "Council") is Intro. No. 1253, which would amend the New York City Human Rights Law to make it an unlawful discriminatory practice for an employer to ask a prospective employee about salary history, search publicly available salary records for that information, or rely on a prospective employee's salary history in determining salary amount "at any stage in the employment process." The bill, which was introduced by Public Advocate Letitia James in August 2016, would allow an employer to rely on salary history, however, if the applicant "unprompted, willingly disclosed such salary history to such employer" and would exempt employers who are authorized to ask about or verify salary information pursuant by federal, state, or local law. The exact provisions of the bill, however, are subject to amendment prior to adoption.

Intro No. 1253 already has the support of 35 of the Council's 51 Members, who have signed on as co-sponsors. Mayor Bill de Blasio has also expressed his intent to support for the bill. Mayor de Blasio implemented similar restrictions on city agencies in November through an Executive Order. Moreover, at a December, 13, 2016, committee hearing on the bill, the New York City Commission on Human Rights endorsed Intro No. 1253, lauding the bill as having the potential to close gender and racial wage gaps.

At the state level, Senator Brad Hoylman introduced similar legislation on January 4, 2017. S. 24 would amend the New York State Human Rights Law by making it an unlawful discriminatory practice for an employer to seek the salary history of a prospective employee for an interview or as a condition of employment. Because this bill was just introduced, its prospects are uncertain at this point.

These proposals reflect an emerging trend in state and local legislatures to restrict salary history inquiries by employers. On August 1, 2016, Massachusetts became the first state to ban employers from asking for an applicant's salary history prior to extending an offer with compensation. Enacted as part of an amendment to the state's equal pay act, S.B. 2119 will take effect on July 1, 2018. Likewise, on December 8, 2016, the Philadelphia City Council passed a law making it an unlawful employment practice for an employer to inquire about an applicant's wage history, retaliate against an applicant for failure to disclose such history, or rely on the applicant's wage history in determining salary at any stage in the employment process. The Philadelphia law will take effect 120 days after it is signed. Legislators in the District of Columbia and New Jersey introduced similar bills in September 2016, and there is also a federal bill, H.R. 6030, pending in the House of Representatives.

The push to prohibit salary history inquiries follows a series of campaigns that have resulted in the enactment of paid sick leave laws and laws restricting the use of criminal background and credit histories in New York City and in other state and local jurisdictions. Collectively, these measures are a reminder that employers must remain cognizant of developments in state and local employment laws, which can be significantly more restrictive than their federal counterparts.

This post was authored by Matt Lampe, Michael Casertano, and Jacqueline Bechara 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.

January 2, 2017

NY Employers Should Be Aware of Recently Adopted Changes to Salary Threshold For NY Overtime Exemptions

On December 28, the New York State Department of Labor adopted regulations that will increase the salary threshold for exempt employees. As a result, many more employees in New York (i.e., those who will no longer meet the new salary threshold) will become eligible for overtime pay.

The amount of the increase varies by region and by the size of the employer and will gradually increase over time. In New York City, for employers with 11 or more employees, the new salary threshold will be $825 per week on and after December 31, 2016; $975 per week on and after December 31, 2017; and $1,125 per week on and after December 31, 2018. For small employers with employees in New York City, and for employers with employees outside New York City (but within New York State), the increases are smaller and phase in over a longer period. For example, for upstate employees, the new salary threshold will be $727.50 per week on and after December 31, 2016, and will gradually increase each year until it reaches $937.50 per week on December 31, 2020.

Importantly, this change in New York law will become effective without regard to the fate of the federal regulations that were scheduled to go into effect on December 1, 2016. Those regulations, which were enjoined by a federal court in the Eastern District of Texas, would have increased the federal salary threshold for white collar employees from $455 per week to $913 per week.

The changes in the New York salary threshold could very well take employers by surprise, since the regulations were published with little fanfare. The New York Department of Labor published the rule to comply with a 2016 law that increased minimum wage rates for nonexempt employees in New York. Although that law did not specifically call for increases to the salary threshold for exempt employees, the law instructed the Department of Labor to revise its wage orders "to increase all monetary amounts specified therein in the same proportion as the increase in the hourly minimum wage as provided in this [section]." The law further provided that the changes could be promulgated by the DOL without public hearing and without reference to a wage board, and that such changes "shall become effective on the effective date of such increases in the minimum wage ...."

The upshot of these changes is not intuitive and requires a close examination of New York's wage orders. For employers covered by the Miscellaneous Wage Order, there are two different overtime rates. One overtime rate, applicable to employees who are entitled to overtime under the Fair Labor Standards Act ("FLSA"), is calculated as 1.5 time the employee's regular rate. The other overtime rate, applicable to employees who are not entitled to overtime under the FLSA, but are entitled to overtime under New York law, is calculated as 1.5 times the New York minimum wage, which may very well be lower than the employee's regular rate.

Take, for example, an employee in New York City who earns $800 per week and works for a large employer. As of December 31, 2016, that employee will meet the salary threshold for the federal exemption (assuming the injunction is not lifted), but will not meet the salary threshold for the New York exemption. Thus, the employee, if he or she satisfies the duties test for exemption, will be exempt from federal overtime. But the employee will be below the salary threshold for New York, and thus must receive 1.5 times New York minimum wage for hours worked over 40 in a week. In New York City, the minimum wage for large employers will be $11 per hour as of December 31, 2016. So this employee's overtime rate will $16.50 (which is 1.5 x $11). While the overtime pay for such an employee could be significant, it would be less than what would be required under federal law if the employee were overtime eligible under federal law. Federal overtime would be $30 an hour, which is 1.5 times the employee's hourly rate of $20.

Employers subject to the Hospitality, Fast Food, and/or Building Service wage orders should consult the provisions of the applicable wage order, which may vary from the provisions described above. For instance, employers covered by the Hospitality Wage Order must pay overtime at 1.5 times the regular rate to all overtime-eligible employees, and cannot take advantage of the lower rate (1.5 times minimum wage) described in the above example.

Another compliance challenge arises due to the regional variation in salary thresholds. An employee who works in New York City some weeks, but travels upstate in other weeks, may satisfy the exemption test when working upstate, but loose exempt status while working in New York City because of the higher salary threshold applicable in New York City. The New York Department of Labor has issued guidance indicating that in such situations, the employer can increase the employee's salary in weeks the employee works in a higher salary threshold region to avoid paying overtime.

This post was authored by Matt Lampe and Wendy Butler 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.

March 9, 2016

New York City Council Amends Human Rights Law

On March 9, 2016, the New York City Council passed legislation to amend the City's Human Rights Law ("NYCHRL").  Together, the legislation requires that exceptions or exemptions to the NYCHRL be construed narrowly, endorses three court opinions that the Council states properly applied the 2005 "Restoration Act," allows attorney's fees to be awarded to prevailing complainants in administrative complaints, and repeals language addressing how to construe the NYCHRL's prohibition on discrimination based on sexual orientation.

The Mayor is expected to sign the bills within a few weeks.  Once the Mayor signs them, they will become law effective immediately. 

The first bill, Intro 814-A, would build on the Council's Restoration Act of 2005, which required that the NYCHRL "be construed liberally for the accomplishment of [its] uniquely broad and remedial purposes" regardless of how courts have interpreted similar provisions under state and federal anti-discrimination laws.  Intro 814-A adds a specific provision requiring that any exceptions and exemptions in the NYCHRL be construed narrowly.  It also specifically endorses three court opinions that the Council characterizes as having "correctly understood and analyzed the liberal construction requirement" of the Restoration Act: Albunio v. City of New York, 16 N.Y.3d 472 (2011); Bennett v. Health Management Systems, Inc., 92 A.D.3d 29 (1st Dep't 2011); Williams v. New York City Housing Authority, 61 A.D.3d 62 (1st Dep't 2009).

Taken together, these cases set forth the following guidance for courts in interpreting the NYCHRL:   

·                 ·         The Restoration Act requires that all provisions of the NYCHRL be construed "broadly in favor of discrimination plaintiffs, to the extent that such a construction is reasonably possible."  See Albunio, 16 N.Y.3d at 477-78.

·               ·         The following analysis of the NYCHRL's burden shifting framework in the context of summary judgment motions is appropriate:

o        In determining whether a prima facie case has been made, the inquiry is whether "the initial facts described by the plaintiff, if not otherwise explained, give rise to the McDonnell Douglas inference of discrimination."

o        If a defendant puts forth evidence of a legitimate, nondiscriminatory motive, the court "ordinarily" should avoid the issue of whether the plaintiff brought forth a prima facie case.  Instead, the Court should determine whether the defendant has shown that no jury could find for the plaintiff under "any" of the "evidentiary routes--McDonnell Douglas, mixed motive, 'direct' evidence, or some combination thereof."

o       "[E]vidence of pretext should in almost every case indicate to the court that a motion for summary judgment must be denied" regardless of conflicting Supreme Court precedent stating that the evidence must indicate that the pretext was pretext for discrimination in order to survive summary judgment.   See Bennett, 92 A.D.3d at 45.

·              ·         Retaliation claims under the NYCHRL are not limited to material changes in terms and conditions of employment.  See Williams, 61 A.D.3d at 70-71.

·              ·         The continuing violations doctrine applies to discreet acts of discrimination.  Id. at 72-73.

    ·         The "severe and pervasive" test does not apply to sexual harassment claims brought under the NYCHRL except in considering damages.  Id. at 73-81.

The second bill, Intro 818-A, would permit the City's Commission on Human Rights (the "Commission") to award attorney's fees and costs to complainants in cases brought before the Commission.  The bill does not permit the Commission to award fees to a prevailing respondent.  Currently, the NYCHRL permits courts to award attorney's fees and costs to a prevailing party only in civil actions. 

Intro 818-A directs the Commission and courts to consider "the hourly rate charged by attorneys of similar skill and experience litigating similar cases in New York county" when factoring an hourly rate into an attorney's fee award.  It also permits the Commission and courts to award expert's fees.

The final bill, Intro 819, would repeal language addressing how to construe the NYCHRL's existing prohibition on discrimination based on sexual orientation.  Specifically, the existing language being repealed states that the law should not be construed to: (a) restrict an employer's right to insist that an employee meet bona fide job-related qualifications of employment; (b) authorize or require affirmative action quotas or to make inquiries regarding the sexual orientation of current or prospective employees; (c) limit or override exemptions in the human rights law (including the exemption of employers of fewer than four persons and religious institutions); (d) make lawful any act that violates the New York penal law; or (e) endorse any particular behavior or way of life.

Notably, there is no complimentary language in the NYCHRL addressing how to construe the law's prohibitions on discrimination based on other protected categories.  Based on testimony in Committee, the intended effect of this bill appears largely symbolic, as the Council deems the repealed language to be unnecessary, antiquated, and offensive.

The Committee also passed two bills that would amend the NYCHRL that are not related to discrimination in the workplace.  Intro 805-A applies the NYCHRL's prohibitions on discrimination in public accommodations to franchisors, franchisees, and lessors.  Intro 832-A prohibits housing discrimination based on a tenant's actual or perceived status as a victim of domestic violence, sex offense, or stalking. 

This post was authored by Matt Lampe, Kristina Yost, and Michael Casertano 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.

November 20, 2015

Governor Cuomo Signs Amendments to Equal Pay and Human Rights Laws

On October 21, 2015, New York Governor Andrew Cuomo signed legislation amending New York State's Human Rights Law and New York Labor Law to expand protections available to employees.  The amendments will become effective January 19, 2016. 

New York Equal Pay Law

New York's equal pay law (N.Y. Lab. Law §§ 194, 198), which currently allows employers to justify a pay difference between employees of opposite genders based on a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or "any other factor other than sex," has been amended in three ways.  First, the new law (S.1/A.6075) removes the last permissible basis for differentiation, replacing it with narrower language that allows a pay differential to be based on "a bona fide factor other than sex, such as education, training, or experience."  Under the amended law, a "bona fide factor" cannot be based on a "sex-based differential in compensation" and must be "job-related with respect to the position in question" and consistent with business necessity.  An employee may challenge a "bona fide factor" defense by showing that the employer's practice causes a disparate impact on the basis of sex, that an alternative practice exists that would serve the same business purpose, and that the employer has refused to adopt the alternative practice.

Second, the bill bans employers from retaliating against employees for discussing their wages with one another.  Employers may, however, establish reasonable time, place and manner prohibitions on such discussions, such as "prohibiting an employee from discussing or disclosing the wages of another employee without such employee's permission."  This retaliation prohibition and the new "bona fide factor" exception closely follow language in the so-called "Paycheck Fairness Act," a long-proposed amendment to the federal Equal Pay Act.

Third, the bill provides for additional "liquidated" damages of up to 300% of the wages due in cases where an employer is unable to prove that it acted in good faith when violating the law.  This is a significant increase from the current version of New York's equal pay law, which, like the federal Equal Pay Act, only provides for liquidated damages of up to 100% of wages due. 

New York Human Rights Law

The New York State Human Rights Law has been amended in four ways.  First, S.2/A.5360 amends N.Y. Exec. Law § 292 to allow sexual harassment suits against employers regardless of the number of employees employed by the company.  Under existing law, employers with fewer than four employees are excluded from the definition of "employer."  This amendment creates a limited exception to this definition for sexual harassment suits. 

Second, S.3/A.7189 amends N.Y. Exec. Law § 297 to  grant courts and the state Commissioner of Human Rights the discretion to award reasonable attorneys fees to the prevailing party in claims of employment or credit discrimination on the basis of sex.  Under existing law, attorneys fees may only be awarded in housing discrimination cases.

Third, S.4/A.7317 amends N.Y. Exec. Law § 296 to prohibit employment discrimination on the basis of "familial status."      

Fourth, S.8/A.4272 amends N.Y. Exec. Law §§ 292 and 296 to require reasonable accommodations for employees with a "pregnancy-related condition."  The amendment defines the term "pregnancy-related condition" as "a medical condition related to pregnancy or childbirth that inhibits the exercise of a normal bodily function or is demonstrable by medically accepted clinical or laboratory diagnostic techniques."  The term is limited, however, to conditions that may be reasonably accommodated without preventing the complainant from performing in a reasonable manner the activities associated with the job in question. The term "reasonable accommodation" is defined to exclude actions that would "impose an undue hardship" on the employer.  The amendment also requires employees seeking an accommodation for their disability or pregnancy-related accommodation to cooperate in providing medical and other information necessary to verify the disability or pregnancy-related condition or for the consideration of the accommodation.

Employers should evaluate their current workplace policies to ensure they are consistent with these amendments. 

This post was authored by Matt Lampe, Emilie Hendee, Michael Casertano, and Michael Ferruggia 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. 


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.