New York, N.Y. (January 16, 2024) - As we seem to say in every New York year-end recap, 2023 has been a year full of changes in labor and employment law in the Empire State. Workers' rights continue to be expanded and employers' obligations to their employees and independent contractors continue to increase. In an effort to hold employers accountable, the State has even gone so far as to amend the penal code to allow prosecution of employers for wage theft, which may now constitute a felony.
Expansion of Employee Rights and Protections in New York State
Governor Hochul signed several laws passed by the legislature expanding workers' rights and protections in 2023. However, and perhaps most notably, the Governor vetoed the highly-discussed law that would have severely restricted the use of non-compete agreements in the employment context. It remains to be seen whether renewed efforts to achieve a compromise acceptable to both the legislature and executive will take place in 2024.
Pay Transparency New York's pay transparency law – which became effective on September 17, 2023 – requires employers to disclose compensation or range of compensation in any advertisement (internal or external) for a job, promotion, or transfer opportunity. It also requires advertisements to include a description of the available position. The law applies to employers with four or more employees. The advertising requirements apply to positions that are physically performed in New York, even if only in part (e.g., hybrid positions), and to jobs not performed in New York State where the employee reports to a supervisor, office, or other work site located in New York. Where a job is paid solely on commission, the advertisement must so state. Employers found in violation of the law may be subject to investigation and may face civil penalties of up to $3,000 imposed by the State Department of Labor (DOL).
Settlement Agreement Restrictions Governor Hochul signed a bill that amends the State Human Rights Law by limiting the permissible provisions in settlement agreements that resolve claims of harassment, discrimination, and retaliation between employees and employers. Employers may no longer include a term requiring the complainant or plaintiff to pay the employer a penalty, or to forfeit other consideration received from the employer, for violating a non-disclosure or non-disparagement provision.
Additionally, employers may no longer require employees to affirm, in a settlement agreement or release, that they were not subjected to any alleged unlawful discrimination, including discriminatory harassment or retaliation. Employers are prohibited from using confidentiality clauses unless the individual requests such a provision.
Lastly, employees are now permitted to waive the previously non-waivable 21-day period to consider a settlement agreement/release term prohibiting the disclosure of information. Note, however, that this bill did not amend CPLR §5003-B, which requires employees to wait 21 days before signing an agreement containing a nondisclosure provision. Because the CPLR was not amended, the 21-day consideration period for nondisclosure provisions is only waivable pre-litigation, not if the discrimination claim is filed in court. This law – which went into effect on November 17, 2023 – applies to independent contractors, in addition to employees and applicants, and will apply to all agreements entered into on or after that date. An agreement that contains any of the foregoing provisions will be unenforceable.
Freelancer Protections A notable new law is the “Freelance Isn't Free Act.” Employers with operations in New York City will be familiar with the newly imposed obligations since this Act mirrors the similarly-titled ordinance enacted in 2017. However, employers who operate outside the Big Apple must become familiar with this Act, as it seeks to expand protections for freelance workers, who have become staples of many workforces.
Employers must now provide a written contract for the services of any freelancer, with specified payment deadlines. The Commissioner of Labor is to issue regulations to “ensure that the freelance workers and the hiring party understand their obligations under the contract.” The Act also provides anti-retaliation protection for freelance workers and provides a private right of action for freelancers who allege violations of this Act.
Mandatory Meeting Restrictions Section 201-d of the New York Labor Law was amended to prohibit mandatory employer meetings on “religious or political matters” and to protect employees from discrimination or retaliation for refusing to attend these meetings. This expansive definition severely restricts employers' ability to communicate with their workforce regarding religion or political matters.
The law further prohibits mandatory employer meetings about union campaigns and permits employees to refuse to “listen to speech or view communications” by an employer about the decision to join or support a union. The law does not apply to communications concerning “information that is necessary for such employees to perform work.” Religious entities or educational institutions that are exempt from the federal Title VII of the Civil Rights Act of 1964 are also exempt from restrictions on religious speech under this statute. The law does not prohibit communications with managers and supervisors and “casual conversations between employees or between an employee and an agent, representative or designee of an employer”, but “participation in such conversations is not required.” Employers are required to post a notice “in every workplace” to inform employees of their rights under this statute.
Social Media Protections New York adopted a law, which will go into effect on March 12, 2024, that prohibits employers from requiring an employee or prospective employee to: (a) provide social media login information for personal accounts as a condition of employment or for use in a disciplinary action; (b) access personal social media account in front of the employer; or (c) reproduce any information from social media accounts. Pursuant to this law, employers cannot discharge, discipline, or otherwise penalize an employee or applicant, or threaten to do so, because he/she/they refuse to disclose social media information. The term “personal accounts” is broadly defined and employers should avoid asking for any such information without carefully analyzing such a request. There are exceptions to this law, however, including demanding access to non-personal accounts that enable the employer to access its internal computer/information systems and accounts used specifically for business purposes, so long as the employer previously gave notice that it may need to access the account in question.
Protection for Lawful Absences New York adopted the Lawful Absence Law – amending Section 215 of the Labor Law – to bar employers from disciplining employees who take “any legally protected absence under federal, state or local law,” including any statutory leave such as approved absences under the Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA), New York Paid Sick Leave, the New York City Safe and Sick Leave Act, and various other laws protecting employees who miss time for COVID-19 reasons. Employers may not assess “any demerit, occurrence, or any other point, or deductions from an allotted bank of time, which subjects or could subject an employee to disciplinary action.” As a result of this law, employers should tread carefully in making promotion, salary-increase, and bonus decisions that might count any such lawful absences against their employees. Aggrieved employees can file suit in court and recover 100% liquidated damages, back pay and front pay, and attorneys' fees. The DOL may also assess civil penalties.
Labor Law Exemptions Effective March 13, 2024, the salary threshold for certain exemptions under Labor Law Article 6 will increase from $900 to $1,300 per week. Exempt employees must still be employed in a bona fide executive, administrative, or professional capacity to be exempt. As to exempt employees who meet this salary threshold, employers are not required to pay not less frequently than semi-monthly, as is otherwise required under Section 191(d), or obtain written consent before paying by direct deposit, as otherwise required under Section 192. Note that these exemptions are distinct from the exemption salary requirements for overtime and minimum wage. Those levels remain at $1,125 in New York City, Westchester, Nassau and Suffolk, and $1,064.25 per week elsewhere in the state.
Protection for Nursing Mothers The Nursing Mothers in the Workplace Act has been amended to include additional requirements for lactation spaces in the workplace and to require that employers adopt and distribute a lactation accommodation policy (which must be distributed at the time of hiring, to employees returning to work after childbirth, and on an annual basis). This law applies to all employers regardless of size.
Statute of Limitations Expansion Governor Hochul signed an amendment that extends the statute of limitations for all unlawful discriminatory practice claims filed with the New York State Division of Human Rights under the New York State Human Rights Law to three years (increased from one year). Previously, only claims of sexual harassment filed with the Division had a statute of limitations of three years. This law will take effect on February 15, 2024 and will apply to all claims arising on or after that date. For several years, a three-year statute of limitations has applied to discrimination claims under this statute that are filed in court rather than with the Division.
Paid Family Leave Law Amendments New York State modified its employment laws in 2023 to afford additional benefits to employees. The New York Paid Family Leave Law (“NYPFL”) was updated to increase the maximum weekly benefits available to employees and to reduce the overall contribution that employees must make toward these benefits.
The NYPFL provides employees up to 12 weeks of partially paid leave in a 52-week period for reasons including caring for a family member with a serious health condition; bonding with a new child following birth, adoption or placement; or reasons related to a family member being deployed on active military service. Employees who take leave pursuant to the NYPFL receive 67% of their average weekly wage, up to a cap of 67% of the current New York State Average Weekly Wage (“NYSAWW”). For 2024, the NYSAWW will be $1,718.15, so the maximum weekly benefit will be $1,151.16. This is an increase of $20.08 over 2023. In addition to increasing the weekly benefit, New York also decreased the amount that employees must contribute to these benefits. Moving forward, employees will only have to contribute 0.373% of their gross wages per pay period, up to a maximum annual contribution of $333.25 ($66.18 less than in 2023).
WARN Act Amendments 2023 also saw important amendments to the New York Worker Adjustment and Retraining Notification (“WARN”) Act. The WARN Act requires advance notice to the New York Commissioner of Labor and to employees in the event of certain mass layoffs and reductions in force.
The amendments have expanded the definition of covered employees to include remote employees who are “based” at an employment site. There is also additional mandatory content required to be included in the notices the employer must send to the Commissioner as well as to affected employees, including to set forth relevant information relating to severance packages and any financial incentives for employees who choose to remain until layoff date. The amendment adds public health emergencies and terrorist attacks under the unforeseeable business circumstances exception to the mandatory notice requirement. Additionally, employers must submit a request to the Commissioner to be considered eligible for an exception to the WARN Act. The request must be submitted within 10 days of the required notice and must include documentation showing the basis for the requested exception.
Unemployment Notice Requirements Section 590 of the Labor Law now mandates that employers provide separated employees written notice of eligibility for unemployment benefits, including the right to file for unemployment benefits to any employee whose employment has been terminated or whose scheduled working hours have been reduced. Within five working days after the termination date or reduction of an employee's working hours, employers must provide such notice and must "notify any employee terminated from employment, in writing, of the exact date of such termination, as well as the exact date of cancellation of employee benefits connected with such termination."
Minimum Wage Increases Governor Hochul signed legislation to gradually increase the state minimum wage. The minimum wage increases on January 1, 2024. For New York City, Long Island, and Westchester County, the minimum wage will increase to $16/hour. For elsewhere in the state, the minimum wage will increase to $15/hour. Looking to the future, the minimum wage for New York City, Long Island, and Westchester County will increase to $16.50/hour in 2025 and $17/hour in 2026. For elsewhere in the state, the minimum wage will increase to $15.50/hour in 2025 and $16/hour in 2026.
On the heels of these increases, the New York State Department
of Labor finalized new rates for the tip credit and exempt employee
salary thresholds. For food service workers in New York City,
Westchester, and Long Island the tip credit is now $5.35/hour; for
food service workers in the rest of state, the tip credit is now
$5.00/hour. For services employees (other than food service
workers), the tip credit is now $2.65/hour in New York City,
Westchester, and Long Island, and $2.50/hour in the rest of the
state. For all employees, the cash wage will equal the applicable
minimum wage less the applicable tip credit.
The exempt employee salary threshold in New York City, Long Island,
and Westchester is now $1,200/week or $62,400/year. In the rest of
the state, the threshold is now $1,125/week or $58,500/year. These
changes have gone into effect as of January 1, 2024.
Wage Payment Protection As the icing on the cake, violations of the state's wage theft law may now constitute the felony of larceny if the value of the “property” is over $1,000. The state's penal law includes wages in the definition of “property.” Violations include nonpayment of wages, payment of wages below the minimum wage rate and overtime rate, or payment below the promised wage rate if greater than the statutory minimum.
Human Trafficking Protections Lastly for legislative changes, lodging facilities are now required to provide human trafficking training to all employees who are likely to be in contact with guests. This training must take place within 60 days of employment.
New York Division of Human Rights Model Policies and Materials 2023 developments were not limited to the legislative sphere. In line with New York State's continued push to expand protections for employees, the New York State Division of Human Rights has updated its model anti-harassment policy and model training materials. The updates focus on areas that will likely continue to see expanded protections: gender identity, including transgender and non-binary rights; anti-retaliation; harassment in remote work environments; and intervention methods for witnesses. Further, the protections now apply to non-employees, including individuals performing services for employers at the workplace.
Expansion of Employee Rights and Protections in New York City
Protections Based on Height and Weight New York City businesses should be aware that the New York City Human Rights Law was amended to prohibit employers, housing providers and operators of public accommodations from engaging in discriminatory practices based on height or weight. However, employers are permitted to take height and weight into account if they can demonstrate that height or weight are essential job requirements or that height or weight-based criteria are reasonably necessary for the normal operation of their business.
Protection for Domestic Violence Victims New York City has amended the City Human Rights Law definition of “victim of domestic violence” to include a victim subject to acts or threats of economic abuse.
Earned Safe and Sick Time Act Amendments New York City amended its Earned Safe and Sick Time Act (“ESSTA”), which requires employers to provide employees time off to care for or treat illnesses, injuries or health conditions. It is now clear that employees who do not physically work in New York City are not covered, including remote employees of NYC-based companies. An employer's obligation to provide ESSTA depends upon its number of employees and income. Private employers with more than 100 employees must provide up to 56 hours of time off annually, while employers with 99 or fewer employees must provide up to 40 hours of time off to covered employees. The coverage determination is based on the highest number of employees the company had at any time during the year.
The amendments include the following: (a) whether an employer is covered by this ordinance is calculated based on the number of its employees nationwide including employees on leaves of absence if the employer reasonably expects the employee to return; (b) an employer's procedures for requiring an employee to provide notice of his/her/their need to take ESSTA leave must be “reasonable” when the need is not foreseeable, and the procedures must be outlined in a written policy; (c) an employee is only required to provide “reasonable documentation” to support a request for leave, including a note from a licensed health care provider, clinical social worker, mental health counselors or other health care provider; and (d) pay statements must advise employees of the amount of accrued and used sick and safe time and the remaining available balance.
If an employer violates this law, it will be subject to a fine ranging from $250 per violation to $500 per covered employee per calendar year that the unlawful policy or practice was in effect. An employee may also be entitled to back pay if an employer retaliates against the employee based on lawful use of ESSTA leave.
AI Restrictions for Employment Decisions New York City employers and employment agencies are now prohibited from using an automated employment decision tool (AEDT) unless they: (a) ensure that a bias audit was done; and (b) provide notice to applicants that the employer is using an AEDT. The audit must involve an independent evaluation of the AEDT and its impact across categories including sex, race/ethnicity, and intersectional categories. In short, a tool qualifies as an AEDT if: (a) it uses data analytics or artificial intelligence; (b) helps employers and employment agencies make employment decisions; and (c) substantially assists or replaces discretionary decision making. However, this law only applies if: (a) the job location is based in a NYC office (even if a person works remotely) or (b) the employment agency is located in NYC.
‘Workers' Bill of Rights' Requirements Lastly, in the near future New York City employers will be obligated to "conspicuously post" and distribute the “Workers' Bill of Rights”. This will be a notice that is currently being created by several city agencies. This notice will list employee rights under federal, state, and local law, and will be published on the City's website on March 1, 2024. Beginning July 1, 2024, all employers will need to distribute the notice to current employees and provide it to new employees before their first day of work. The notice must be issued in English and any other language that is considered a primary language by at least 5% of the employees.
The NYC Department of Consumer Affairs and Workforce Protection is charged with enforcing compliance. If an employer is determined to be in violation, DCWP may issue a notice of violation and the violations must be corrected within 30 days. Any subsequent violations will result in a $500 civil penalty. We will provide an updated alert once the notice contents are disseminated.
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