Over the closing months of 2023, New York lawmakers at both the state and local levels were busy passing new legislation impacting the workplace. As a result, New York employers should take some time to familiarize themselves with a number of new laws and obligations. Below are some highlights of the new rules.
New York State
1. New Requirements for Separation and Settlement Agreements
Employers often want to include obligations of confidentiality and non-disparagement in agreements waiving claims of discrimination, harassment, or retaliation. Under New York law, these provisions are permitted only under very limited circumstances and only where they are the complainant’s preference. On November 17, 2023, Governor Hochul made these restrictions even broader.
Calculating damages arising from breach of a confidentiality and/or non-disparagement provision can be difficult. As a result, settlement and separation agreements often include that the complainant must pay liquidated damages (penalty damages) or forfeit all, or part of, the monies received in the event of a breach. Under a new amendment to New York State law, no release agreement involving a claim of discrimination, harassment, or retaliation will be enforceable if the agreement includes either of these remedies for breach of a confidentiality and/or non-disparagement provision. In addition, a release agreement will not be enforceable if it contains an affirmative statement, assertion, or disclaimer by the complainant that they were not subject to unlawful discrimination, harassment, or retaliation.
On a positive note, the amendment does add some flexibility with respect to the process required when confidentiality is included in a settlement or separation agreement. Previously, NYS employers were required to provide a non-waivable 21-day period for the employee to consider if confidentiality was their preference, with a 7-day revocation period to follow. The 21-day period may now be waived, but in prelitigation resolutions only. The law was not amended for release agreements involving settlement of claims once litigation commences.
Additionally, this confidentiality preference protection now extends to independent contractors.
2. Filling Deadline Extended for Human Rights Law Claims
Effective February 15, 2024, the statute of limitations for filing any charge of discrimination, harassment, or retaliation with the NYS Division of Human Rights (Division) will increase from one year to three years from the alleged discriminatory act. This will align the statute of limitations for filing a claim with the Division with the deadline for a court filing as well as the internal filing deadline previously established for sexual harassment complaints.
This change affords a longer time period for individuals to bring their claims, likely resulting in increased claims activity at the Division.
3. New York Minimum Wage and Salary Thresholds Have Increased
On December 27, 2023, New York State adopted proposed regulations increasing salary thresholds for exempt administrative and executive employees under state law.
As explained in our prior alert, the minimum wage for New York City, Long Island, and Westchester County increased to $16 an hour on January 1, 2024, whereas the minimum wage for the remainder of New York State increased to $15 an hour. The salary thresholds for exempt administrative and executive employees increased to $1,200/week ($62,400/year) in NYC, Westchester, and Long Island and $1,124.20/week ($58,458.40/year) for the rest of the state.
Employers must also update their minimum wage posters in the workplace.
4. Governor Hochul Vetoes Ban on Non-Compete Agreements
New York State lawmakers introduced legislation this past summer that would effectively ban non-competition agreements in New York. On December 22, 2023, Governor Hochul vetoed the bill, looking to scale back the restrictions under any potential law.
The Governor has called for a new, narrower bill that would prohibit employers from imposing non-compete agreements on middle-class and low-wage workers and would include a sale-of-business exception to the ban. Employers should expect another attempt at a ban on non-competes in New York.
5. New York State Adopts Freelance Workers Law
Following New York City’s footsteps, effective on May 19, 2024, New York State has adopted its own Freelance Isn’t Free Act applicable to independent contractors retained to provide services for at least $800 during the immediately preceding 120 days. Under the law, a hiring party must (i) enter into a written contract with a freelance worker any time the hiring party retains the freelance worker’s services; (ii) provide the freelance worker with a copy of the written contract; and (iii) retain the contract for at least six years. The contents of the contract mirror what is required in the New York City law.
6. New Notice of Unemployment Insurance Benefits for Reduced Hours Triggering Partial Unemployment
New York State employers were already required to provide a Record of Employment Form (IA 12.3) to every employee who was permanently or temporarily separated from employment. The form advises employees about how to file for unemployment insurance benefits and provides some helpful information. Effective November 13, 2023, NYS employers are now also required to provide the (updated) IA 12.3 form if the employees’ hours are reduced such that they may qualify for partial unemployment benefits. An employee is eligible for partial unemployment anytime an employer drops the employee’s hours below 30 hours in a week (and they earn less than $504 per week).
Based on current Department of Labor (DOL) FAQs about the new requirement, NYS employers that have varying schedules which change frequently, even week to week, should pay particular attention to this change. Employers with varying schedules should implement procedures to keep track of scheduling so that an employee timely receives the required form when their schedule changes. Employers must provide the notice no more than five working days after the triggering event, including when hours are reduced.
7. New York State Pay Transparency Takes Effect
New York’s Pay Transparency law took effect on September 17, 2023. Generally, the law requires all private employers (with four or more employees) who post advertisements for jobs, promotions, or transfers that will physically be performed, at least in part, in New York State, to include in the advertisement a range of compensation for that job, promotion, or transfer. The law’s application also reaches those jobs that are performed outside the state but report to a supervisor or worksite inside the state.
Any job advertisement is covered, regardless of the medium in which it is posted. This includes LinkedIn posts and other online methods of job advertising. The law also reaches job advertisements posted by recruiters or third parties on behalf of an employer.
Under the NYS law, “Range of Compensation” means the minimum and maximum annual salary or hourly wage for that position, which the employer in good faith believes is accurate at the time of posting. The range cannot be open-ended, for example, “a maximum of $60,000 per year.”
The law also requires that the advertisement includes a job description if one exists for that job, promotion, or transfer. New York City already has similar rules in place; however, this new requirement to include a job description is broader than the scope of the NYC law.
8. Paid Family Leave (PFL) Benefits Increased
New York has issued updates to the New York PFL weekly benefit rates for 2024. Employees taking leave under PFL receive 67% of their average weekly wage up to a cap of 67% of the NYS average weekly wage set by the NY DOL. For 2024, the average weekly wage will be $1,718.15. This means the maximum weekly benefit an employee can receive while on PFL is $1,151.16, an increase from $1,131.08. Employees will be eligible for the new benefit rate for leaves that begin in 2024.
9. The Clean Slate Act
Governor Hochul signed the Clean Slate Act on November 16, 2023, which seals certain criminal records in an effort to help individuals seek employment opportunities. For misdemeanor convictions, those that have occurred at least three years prior will be sealed if there is no incarceration and three years after being released from incarceration if there was one. For a felony conviction, the conviction will be sealed if at least eight years pass from the date the defendant was released from incarceration. Certain convictions are not eligible to be sealed including sex crimes, murder, and other non-drug Class A felonies.
To the extent an employer does a background check, this will limit the information that may be revealed in connection with such check.
The law takes effect one year from the date it was signed by the Governor and provides the New York State Office of Court Administration up to three years thereafter to implement the processes necessary to identify and seal all eligible records.
New York City
1. New York City Safe and Sick Leave Regulations Updated
In a significant change to the law, the New York City Council has created a private right of action under the NYC Earned Safe and Sick Time Act (ESSTA) which will become effective on March 20, 2024. With this change, employees will be able to forego filing a complaint with the NYC Department of Consumer and Worker Protection (DCWP) and go straight to court. Civil penalties under the city law, payable to the city, are also amended to be assessed on a per instance basis, rather than per employee. These changes are significant for employers since they expand an employee’s remedies under the law and can significantly increase the cost of ongoing violations.
These changes came on the heels of substantive changes to ESSTA’s regulations implemented on October 15, 2023, including:
- Following in the footsteps of New York State, NYC confirmed that to determine employer size for coverage under the law, City employers must count employees nationwide, and not just those in New York City or New York State.
- While employees who work remotely or otherwise outside of NYC are not entitled to Safe and Sick Time under the law, such employees may be covered “if they regularly perform, or are expected to regularly perform, work in New York City.” Only the hours worked in New York City count towards accrual.
- Employer policies must include a statement that the employer will not ask the employee to provide details about the medical condition that led the employee to use sick time or the personal situation that led the employee to use safe time, and that any information the employer receives about the employee’s use of safe/sick time will be kept confidential and not disclosed to anyone without the employee’s written permission or as required by law.
2. New York City Workers’ Bill of Rights Notice and Posting Requirement
Beginning on July 1, 2024, NYC employers will be required to provide a notice to employees and new hires regarding a workers’ bill of rights that will be created by the various City employment agencies. The notice is set to be published no later than March 1, 2024 and will include “information about rights under relevant federal, state and local law that apply to employees, prospective employees or independent contractors in the city.” Employers will also be required to post this notice in a conspicuous place in the workplace accessible to employees and make the information available online.
[View source.]
