• Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.

Employment relationship

State-specific laws
What state-specific laws govern the employment relationship?

Article 6 of the New York Labor Law governs payment of wages. Regulations promulgated by the New York State Department of Labor can be found under Title 12 of the New York Codes, Rules and Regulations.

The New York State Human Rights Law (N.Y. Exec. Law § 290 and following) is the state equivalent of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and the Age Discrimination in Employment Act (the federal anti-discrimination statutes), although the New York State Human Rights Law is broader and encompasses more protected classes. Employers should also be aware of the New York City Human Rights Law (N.Y.C. Admin. Code § 8-107 and following), which is the New York City anti-discrimination statute. The New York City Human Rights Law is more liberal than its state and federal counterparts in both protections and damages, including providing for the recovery of uncapped compensatory and punitive damages, as well as attorneys’ fees.

Who do these cover, including categories of workers?

The New York Labor Law governs “any person employed for hire by an employer in any employment” (N.Y. Labor Law § 190). Employers with more than four workers are subject to the New York State Human Rights Law and the New York City Human Rights Law, except that from January 19 2016 all employers, regardless of size, will be subject to the New York State Human Rights Law’s prohibitions on sexual harassment (N.Y. Exec. Law § 292(5)).

Misclassification
Are there state-specific rules regarding employee/contractor misclassification?

There are no specific state statutes governing employee or independent contractor classification. Courts and state agencies should look to common law definitions, under which:

“the critical inquiry ... pertains to the degree of control exercised by the purported employer over the results produced or the means used to achieve the results. Factors relevant to assessing control include whether the worker (1) worked at his own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer's payroll and (5) was on a fixed schedule.” (Bynog v. Cipriani Group Inc, 1 N.Y.3d 193, 198 (2003) (citations omitted).) 

In defining independent contractor status, the New York State Department of Labor states that in the performance of their duties independent contractors are free from:

supervision;
direction; and
control.

Factors considered by the New York State Department of Labor include whether the worker:

  • has an established business;
  • advertises in electronic or print media;
  • buys an advertisement in Yellow Pages;
  • uses business cards, stationery and billheads;
  • carries insurance;
  • keeps a place of business and invests in facilities, equipment, and supplies;
  • pays his or her own expenses;
  • assumes risk for profit or loss;
  • sets his or her own schedule;
  • sets or negotiates his or her own pay rate;
  • offers services to other businesses (competitive or non-competitive);
  • is free to refuse work offers; and
  • may choose to hire help.

Contracts
Must an employment contract be in writing?

Generally, a written agreement is not required, provided that a contract for a fixed duration may be subject to New York’s Statute of Frauds (Sladden v. Rounick, 59 A.D.2d 882, 882 (1977) (an oral agreement for a two-year fixed term of employment was not enforceable)). However, a commissioned salesperson’s agreement must be in writing (N.Y. Labor Law § 191). Additionally, New York’s Wage Theft Prevention Act requires that employees be given written notice on hire, and in the event of any pay decrease, be given notice of their pay rate and certain other information. Employers must maintain a written acknowledgement that employees received such information (N.Y. Labor Law § 195; see also § 4.3.1, below).

Are any terms implied into employment contracts?

There are implied covenants of good faith and fair dealing in employment contracts (ABN AMRO Bank, N.V. v. MBIA Inc., 17 N.Y.3d 208, 228-29 (2011)). Employees are likewise subject to an implied duty of loyalty to their employer (e.g., W. Elec. Co. v. Brenner, 41 N.Y.2d 291, 294 (1977)). Additionally, if performance is continued under a contract after its expiration, the agreement may, in certain circumstances, be presumed to renew under the same terms. If the contract was for longer than one year, it will presumptively renew on a year-to-year basis (Borne Chem. Co. Inc. v. Dictrow, 85 A.D.2d 646, 648 (2d Dep’t 1981)).

Are mandatory arbitration agreements enforceable?

Yes, New York courts routinely enforce mandatory arbitration agreements (e.g., DiBello v. Salkowitz, 4 A.D.3d 230, 232 (1st Dep’t 2004) (requiring disputes to be submitted to arbitration pursuant to a mandatory arbitration agreement)).

How can employers make changes to existing employment agreements?

Amendments to an employment agreement for a fixed term may be obtained through mutual agreement between the parties. Where the employment relationship is at will, “the employer may unilaterally alter the terms of employment, and the employee may end the employment if the new terms are unacceptable” (Minovici v. Belkin BV, 109 A.D.3d 520, 523 (2d Dep’t 2013)).

Click here to view the full article.