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State snapshot

Key considerations
Which issues would you most highlight to someone new to your state?

An employer which is new to New York State should be cognizant of New York City’s increasing focus on pre-employment processes. Among other things, New York City has in recent years enacted:

  • “Ban the box” legislation prohibiting employers from asking job applicants about criminal convictions before making a conditional offer of employment;
  • the Stop Credit Discrimination in Employment Act, which makes it an unlawful discriminatory practice for an employer to use or request an employee’s or applicant’s consumer credit history, except in certain enumerated circumstances; and
  • one of the nation’s most far-reaching laws prohibiting discrimination against candidates for employment based on their status as unemployed.

What do you consider unique to those doing business in your state?

The expansive protections afforded by the New York State and City Human Rights Laws––the state and city counterparts to federal anti-discrimination laws––are unique to those doing business in the state. In addition, most New York wage and hour laws provide for lengthy (six-year) statutes of limitation, and an aggrieved employee may be entitled to recover up to 100% liquidated damages and attorneys’ fees under these statutes. Additionally, New York recently enacted the country’s most generous paid family leave program, which will go into effect on January 1 2018. 

Is there any general advice you would give in the labor/employment area?

Employers should be cognizant that many New York State laws offer employees greater protections than federal law, and that localities––such as New York City––may have protections exceeding state law. For example, the New York City Earned Sick Time Act requires employers to provide minimum paid sick leave to employees and the New York City Human Rights Law was recently amended to prohibit employers from discriminating against unemployed job applicants.

Emerging issues
What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalization of marijuana and privacy?

New York recently passed a comprehensive set of legislation known as the Women’s Equality Agenda, which significantly amends New York’s equal pay, pay transparency, pregnancy accommodation, sex discrimination and sexual harassment laws to provide greater protection for women in the workplace.

New York City recently passed a law prohibiting employers with at least four employees from inquiring into a job applicant’s criminal history until a conditional offer of employment has been extended to that applicant. Similarly, the recent Earned Sick Time Act requires New York City employers to provide paid sick leave to employees. There are attempts to pass similar legislation state-wide.

In 2014 New York passed the Compassionate Care Act legalizing medical marijuana, although it has yet to be implemented. Once implemented, patients covered by the law will be protected as disabled under the New York State Human Rights Law and entitled to “reasonable accommodations” from employers, although employers may prohibit impaired employees from performing their duties.

New York recently amended certain provisions of the New York Labor Law as part of its Women’s Equality Agenda. The amended labor laws prohibit discrimination against an employee who inquires about, discloses or discusses his or her compensation with another employee and limits exceptions for pay inequality between sexes, while increasing liquidated damages for willful violations (N.Y. Labor Law § 194).

New York is also considering legislation to protect the privacy of employees’ and applicants’ social media accounts (N.Y. Senate-Assembly Bill S. 3927, N.Y. Assembly Bill A. 2891).

Employers should be aware that New York’s minimum wage is rising, and will continue to rise in the coming years. In particular, legislation passed in 2015 set a higher industry minimum wage for fast-food workers.

Proposals for reform
Are there any noteworthy proposals for reform in your state?

New York City recently enacted a ban the box law prohibiting employers from asking job applicants about criminal convictions before making a conditional offer of employment. It is possible that similar legislation will be soon enacted state-wide. New York is also considering legislation regarding an employer’s use of social media with respect to employees and applicants, specifically prohibiting employers from requiring individuals to disclose any login names, passwords or “other means for accessing a personal [electronic] account or service” (N.Y. Senate-Assembly Bill S. 3927, N.Y. Assembly Bill A. 2891).

Similarly, New York State recently passed a law permitting the use of medical marijuana. Once implemented, employers will need to be cognizant of how this affects their workforce, including the fact that workers covered by this law will be classified as “disabled” under the state anti-discrimination statute (the New York State Human Rights Law).

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)).

Hiring

Advertising
What are the requirements relating to advertising open positions?

In addition to federal restrictions and restrictions arising from applicable anti-discrimination law, New York City law prohibits “an advertisement for any job vacancy” which indicates that applicants must be employed at the time of application (N.Y.C. Admin. Code § 8-107.1(21)(a)(2)).

Background checks
What can employers do with regard to background checks and inquiries?

(a) Criminal records and arrests

Employers may not inquire about, or take any adverse action with respect to, any arrest or criminal accusation not currently pending, or any youthful or sealed conviction (N.Y. Exec. Law § 296(16)). New York City passed the Fair Chance Act, which became effective on October 27 2015, prohibiting employers from inquiring about an applicant’s criminal history before making a conditional offer of employment.

Moreover, employers may not take adverse employment actions based on any prior conviction, unless:

  • there is a direct relationship between one or more of the previous criminal offences and the employment sought or held by the individual; or
  • the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public (N.Y. Correct. Law § 752, N.Y. Exec. Law § 296(16) (providing a private right of action)).

Enumerated factors to be considered in determining if an adverse employment action is appropriate are found in N.Y. Correct. Law § 753.

(b) Medical history

Employers may not discriminate against employees and applicants on the basis of any actual or perceived disability under the New York State Human Rights Law and the New York City Human Rights Law. Employers are also prohibited from administering or requiring applicants to undergo genetic testing, as well as soliciting for such information, except in limited circumstances relating to an employee’s susceptibility to a disease which relates to the job in question (N.Y. Exec. Law § 296(19)). Where a background check reflects medical history or a prior adverse employment action due to medical history, such facts may be disclosed only to a “physician designated by the [employee]” (N.Y. Gen. Bus. Law § 380-q).

(c) Drug screening

New York does not have a statute governing drug and alcohol screening of employees or applicants (other than for transportation providers, 17 N.Y.C.R.R. § 720.0 and following). 

Drug addiction (actual or perceived) qualifies as a protected disability under the New York State Human Rights Law and employers should thus be wary of potential discrimination claims arising from decisions based on drug testing where drug use does not interfere with the employee’s ability to perform his or her job (Doe v. Roe, Inc., 160 A.D.2d 255 (1st Dep’t 1990)). As explained by the appellate division, any pre-hiring procedures which implicate a disability must bear “a rational relationship to” and be “a valid predictor of employee job performance” (Id. at 256). Further, the appellate division held that:

“while [an employer] may be legitimately entitled to discriminate against users of controlled narcotic substances, when challenged it must come forward with evidence establishing that its testing method accurately distinguishes between [narcotic] users and consumers of lawful foodstuffs or medications.” (Id.)

This issue will be further complicated once New York State implements the Compassionate Care Act legalizing medical marijuana, which protects medical marijuana recipients as “disabled” under the New York State Human Rights Law.

(d) Credit checks

In addition to federal limitations, New York employers may obtain credit information on current or potential employees pursuant to consumer reports, which may be used in decision making only with respect to “employment, promotion, reassignment or retention” (N.Y. Gen. Bus. Law § 380-a). Employers must provide notice to employees and obtain authorization from an employee before seeking a consumer report (N.Y. Gen. Bus. Law § 380-b, c).

Except for limited exemptions, New York City's Fair Chance Act bans employers from requesting or using consumer credit history in connection with employment applications (N.Y.C. Admin. Code § 8-107(24)).

(e) Immigration status

The New York State Human Rights Law and New York City Human Rights Law prohibit discrimination against applicants based on their actual or perceived alienage or citizenship status.

(f) Social media

New York law does not address whether an employer may use social media in making an employment decision. However, employers are prohibited from taking adverse actions based on certain off-duty conduct which could be discovered through social media (N.Y. Labor Law § 201-d). New York is also considering legislation regarding the use of social media by employers in employment decisions (N.Y. Senate-Assembly Bill S. 3927, N.Y. Assembly Bill A. 2891).

(g) Other

Employers generally cannot fingerprint applicants or employees (N.Y. Labor Law § 201-a). Employers cannot request that an applicant or employee undergo a polygraph test (N.Y. Labor Law §§ 734 and 735).

Wage and hour

Pay
What are the main sources of wage and hour laws in your state?

Article 6 of the New York Labor Law is the primary source of wage and hour laws, setting forth, among other things:

  • requirements regarding wage deductions;
  • frequency of payments;
  • manner of payment; and
  • exemptions from coverage;

Regulations promulgated by the New York State Department of Labor can be found under Title 12 of the New York Codes, Rules and Regulations.

What is the minimum hourly wage?

The minimum wage is $9.00 per hour. The minimum wage for workers in the fast-food industry is $9.75 per hour and $10.50 in New York City.

What are the rules applicable to final pay and deductions from wages?

Final wages must be paid by no later than the next regular pay date following cessation of employment, regardless of the reason for termination (N.Y. Labor Law § 191). Employers must provide terminated employees with written notice of the date of termination and the date that any employee benefits will cease (N.Y. Labor Law § 195(6)).

Section 193 of the New York Labor Law prohibits wage deductions unless they are “authorized in writing by the employee and are for the benefit of the employee”. Employers generally cannot, among other things, make deductions for overpayment of wages or for reimbursement for lost or damaged employer property (including by way of separate transaction).

In certain instances, an employee may be entitled to receive wage supplements (e.g., vacation, holiday and severance pay) on termination of employment, if such are provided pursuant to contract or company policy or practice (N.Y. Labor Law §§ 190 and 191). Non-discretionary and formulaic bonuses may, in some instances, constitute “wages” under the New York Labor Law to which an employee is entitled, even if terminated (e.g., Guiry v. Goldman, Sachs & Co., 31 A.D.3d 70, 72 (2006)).

Hours and overtime
What are the requirements for meal and rest breaks?

Generally, all persons subject to the New York Labor Law are entitled to a 30-minute meal break between 11:00am and 2:00pm, provided that such an employee works at least a six-hour shift over that period (N.Y. Labor Law § 162(2)). Employees are entitled to an additional meal break “of at least twenty minutes” between 5:00pm and 7:00pm if their shift begins before 11:00am (N.Y. Labor Law § 162(3)). Employees working shifts “of more than six hours” beginning between 1:00pm and 6:00am are entitled to a 45-minute meal break (N.Y. Labor Law § 162(4)). Specific rules apply to factory workers (N.Y. Labor Law § 162). New York also requires lactation breaks (N.Y. Labor Law § 206-c).

What are the maximum hour rules?

“Nothing in the New York Labor Law restricts the number of hours” employees can work, subject to “overtime, spread of hours, rest period and day of rest requirements of the law,” as well as applicable child labor laws (N.Y.S. Dept. of Labor Opinion Ltr., RO-09-0187 (March 18 2010)).

How should overtime be calculated?

Non-exempt employees are entitled to no less than one-and-a-half times their regular rate of pay for time worked in excess of 40 hours per work week (12 N.Y.C.R.R. §142-2.2). Exempt employees are entitled to no less than one-and-a-half times the prevailing minimum wage rate for time worked in excess of 40 hours per workweek (N.Y.S. Dept. of Labor Opinion Ltr., RO-10-0025 (June 30 2010)).

What exemptions are there from overtime?

New York generally recognizes the exemptions set forth by the Fair Labor Standards Act, provided that exempt employees must be paid no less than one-and-one-half times the prevailing minimum wage rate for overtime worked (12 N.Y.C.R.R. §142-2.2, see also N.Y.S. Dept. of Lab. Opinion Ltr., RO-10-0025 (June 30 2010)).

Record keeping
What payroll and payment records must be maintained?

With each wage payment an employer must provide documentation identifying: 

  • the employee’s name;
  • dates of work covered by the payment;
  • the employer’s name, address and phone number;
  • rate(s) of pay and method of calculation;
  • gross wages;
  • deductions;
  • any allowances claimed; and
  • net wages (N.Y. Labor Law § 195). 

For non-exempt employees, such statements must also include:

  • regular rate of pay;
  • overtime rate;
  • number of hours worked; and
  • number of overtime hours worked (Id.).

Additional requirements may apply for specific categories of employee. Weekly payroll records, including the above information, must be maintained for six years (N.Y. Labor Law § 195(4); 12 N.Y.C.R.R. § 142-2.6).

The New York Wage Theft Prevention Act requires employers to maintain a written acknowledgement from all employees for six years, indicating that they have received a notice containing:

  • rate of pay;
  • overtime rate;
  • method for calculating wages (e.g., hourly or piecemeal);
  • pay date;
  • any allowances that the employer will claim (e.g., tipping, meals or lodging);
  • the employer’s name;
  • the address of the employer’s main office or principal place of business, a mailing address if different, and telephone number; and
  • “such other information as the commissioner deems material and necessary” (N.Y. Labor Law § 195(1)(a)). 

The New York Minimum Wage Law (N.Y. Labor Law § 650 and following) requires employers to maintain for six years records demonstrating compliance with minimum wage laws.

Discrimination, harassment and family leave

What is the state law in relation to:
Protected categories

(a) Age?

New York has two principal anti-discrimination laws, the New York State Human Rights Law and the New York City Human Rights Law. Both protect more categories than federal law and apply to all employers with four or more employees. However, all employers, regardless of size are subject to the sexual harassment provisions of the New York State Human Rights Law (N.Y. Exec. Law § 292(5); N.Y.C. Admin. Code § 8-102(5)). Unlike federal law, individuals may be personally liable for engaging in or aiding and abetting discrimination under both state and city law (HealthCare Exch., Inc. v. Global Healthcare Exch., LLC, 470 F. Supp. 2d 345, 363 (S.D.N.Y. 2007)). Paid and unpaid interns receive the same anti-discrimination protections as employees under the New York State Human Rights Law and New York City Human Rights Law (N.Y. Exec. Law § 296-c; N.Y.C. Admin. Code § 8-102(28)(d)).

While the federal Age Discrimination in Employment Act applies only to persons 40 years or older, the New York State Human Rights Law prohibits age-based discrimination of individuals 18 years or older (N.Y. Exec. Law § 296(3-a)). The New York City Human Rights Law prohibits age discrimination generally, without reference to a specific age, and includes discrimination based on perceived age (N.Y.C. Admin. Code § 8-107(1)(a)).

(b) Race?

Race discrimination is prohibited by both the New York State Human Rights Law and the New York City Human Rights Law (NY Exec. Law § 296(1)(a); N.Y.C. Admin. Code § 8-107(1)(a)).

(c) Disability?

Discrimination on the basis of actual or perceived disability is prohibited by both the New York State Human Rights Law and the New York City Human Rights Law (N.Y. Exec. Law § 296(1)(a); N.Y.C. Admin. Code § 8-107(1)(a)).

(d) Gender?

Gender is protected by both the New York State Human Rights Law and the New York City Human Rights Law (N.Y. Exec. Law § 296(1)(a); N.Y.C. Admin. Code § 8-107(1)(a)). Gender discrimination under the New York City Human Rights Law includes discrimination on the basis of gender identity, gender expression and transgender status. The New York State Human Rights Law’s regulations prohibit discrimination or harassment on the basis of gender identity, transgender status or gender dysphoria (New York City Commission on Human Rights Legal Enforcement Guidance on Discrimination on the Basis of Gender Identity or Expression: Local Law No. 3 (2015); 9 N.Y.C.R.R. § 466.13).

(e) Sexual orientation?

Both the New York State Human Rights Law and the New York City Human Rights Law prohibit discrimination based on sexual orientation (N.Y. Exec. Law § 296(1)(a); N.Y.C. Admin. Code § 8-107(1)(a)).

(f) Religion?

The New York State Human Rights Law and the New York City Human Rights Law both prohibit discrimination based on religion (N.Y. Exec. Law § 296(10); N.Y.C. Admin. Code § 8-107(3)).

(g) Medical?

Both the New York State Human Rights Law and the New York City Human Rights Law prohibit discrimination based on actual or perceived disability, and the New York State Human Rights Law protects against discrimination based on genetic predisposition (N.Y. Exec. Law § 296(19(a)).

(h) Other?

The New York State Human Rights Law and New York City Human Rights Law prohibit discrimination based on national origin and creed, military status, and marital status (N.Y. Exec. Law § 296(1)(a); N.Y.C. Admin. Code § 8-107(1)(a)). Likewise, both laws require employers to provide “reasonable accommodations” for an employee’s pregnancy, childbirth or related medical condition unless doing so would cause an undue hardship to the employer (N.Y. Exec. Law § 296(3)(a)-(b); N.Y.C. Admin. Code §§ 8-107(1)(a) and (22)(a)).

The New York City Human Rights Law prohibits discrimination because of an individual’s “actual or perceived status… as a victim of domestic violence, or as a victim of sex offenses or stalking”, as well as on an individual’s status as a caregiver of a minor child or individual with a disability (N.Y.C. Admin. Code § 8-107.1). The New York State Human Rights Law prohibits discrimination based on familial status and against victims of domestic violence (N.Y. Exec. Law § 296(1)). New York State law also prohibits discrimination against employees based on off-duty conduct (N.Y. Labor Law § 201-d).

The New York City Human Rights Law further prohibits discrimination based on the fact of an “applicant’s unemployment” and on the basis of consumer credit history (N.Y.C. Admin. Code §§ 8-107(21)(a)(1) and (24)). The New York State Human Rights Law also prohibits discrimination on the basis of prior arrests and “criminal accusations” which terminated in favor of an employee or applicant (N.Y. Exec. Law § 296(16)).

Harassment
What is the state law in relation to harassment?

The New York State Human Rights Law and New York City Human Rights Law both prohibit harassment based on protected characteristics. The New York State Human Rights Law requires that conduct be “severe or pervasive” to create an actionable hostile work environment, co-extensive with federal anti-discrimination law (e.g., EEOC v. Rotary Corp., 297 F. Supp. 2d 643, 665 (N.D.N.Y 2003)). The New York City Human Rights Law requires that a person only has been treated “less well” due to a protected characteristic; if such is shown, an employer may avoid liability only by showing as an affirmative defense that the conduct was no more than “petty slights or trivial inconveniences” (Williams v. N.Y.C. Hous. Auth., 61 A.D.3d 62, 78 (1st Dep’t 2009)).

The New York City Human Rights Law imputes liability to an employer for a co-worker’s alleged harassment of an employee where, based on the circumstances, an employer “should have known” about alleged conduct, which is broader than the federal law for imputing such liability (Zakrewska v. The New School, 14 N.Y.3d 469, 479 (2010)).

Family and medical leave
What is the state law in relation to family and medical leave?

New York recently passed the country’s most generous paid family leave program, which will take effect on January 1 2018. Under the program, covered employees may take job-protected leave to:

  • bond with a new child, including adopted and foster children;
  • care for a seriously ill family member; or
  • address certain military family needs.

The program will be phased in gradually with employees eligible to take up to eight weeks of leave in 2018, up to 10 weeks of leave in 2019 and 2020, and up to 12 weeks of leave a year in 2021 and the following years. The amount of money employees receive during their leave will increase during the first four years of the program and will be capped in relation to the state-wide average weekly wage. In 2018 an employee will receive 50% of his or her average weekly wages up to a cap that is equal to 50% of the state-wide average weekly wage. This amount will increase over the following three years up to 67% of the employee’s weekly wages, capped at 67% of the state-wide average weekly wage.

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

Generally, an employer may implement soundless video recording, although legislation is pending which would require that written notice be given to employees (N.Y. Assembly Bill A. 3871). Absent a court order, New York prohibits employers from video recording an employee in a restroom, locker room or other room designated for purposes of changing clothes (N.Y. Labor Law § 203-c). It is an unfair labor practice for an employer to “spy upon or keep under surveillance, whether directly or through agents,” employees or representatives engaging in concerted activities (N.Y. Labor Law § 704-a).

With respect to audio recordings, New York’s wire-tapping law, like federal law, requires one party’s consent. It is a crime to record or eavesdrop on in-person or telephonic conversations without the consent of at least one party to the communication (N.Y. Penal Law §§ 250.00, 250.05). 

Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

Legislation regarding the privacy of employees’ and applicants’ social media accounts is pending (N.Y. Senate Assembly Bill S. 3927, N.Y. Assembly Bill A. 2891).

Bring your own device
What is the latest position in relation to bring your own device?

No New York statute addresses “bring your own device” (BYOD) policies. However, in light of trends and case law in other jurisdictions, employers should be wary of permitting non-exempt employees to use their own devices to conduct work-related business, which suggests that employees could potentially bring overtime and failure-to-pay claims for off-the-clock work performed on such devices. Employers should also ensure that their BYOD policies identify the circumstances under which a personal device may be wiped of data, including authorization by the employee that such may be done, and for preserving electronic data on personal devices in the event that a litigation hold is issued. 

Off-duty
To what extent can employers regulate off-duty conduct?

The New York Labor Law prohibits adverse employment actions based on an employee’s lifestyle choices outside of the workplace, including political activities, legal recreational activities, legal off-duty use of “consumable products” and union membership (N.Y. Labor Law § 201-d). 

“Recreational activity” includes:

  • “any lawful, leisure-time activity, for which the employee receives no compensation and which is generally engaged in for recreational purposes, including but not limited to sports, games, hobbies, exercise, reading and viewing of television, movies and similar material.” (N.Y. Labor Law § 201-d(1).)

However, no protection is afforded to conduct which creates a material conflict of interest related to the employer’s trade secrets, proprietary information or other business interests (N.Y. Labor Law § 201-d(3)). New York appellate courts have held that extramarital romantic relationships between colleagues are not “recreational activities” under this provision (e.g., Hudson v. Goldman Sachs & Co., 283 A.D.2d 246, 246 (1st Dep’t 2001)).

Gun rights
Are there state rules protecting gun rights in the employment context?

No New York statute addresses gun rights in the workplace.

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?

No New York statute specifically addresses an employee’s IP rights. An employer is considered the author of a “work for hire” where an employee prepares such within the scope of his or her employment, without an agreement to the contrary (17 U.S.C. § 201(b); see also Fleurimond v. New York Univ., 876 F. Supp. 2d 190, 198 (E.D.N.Y. 2012) (“In the absence of an express, written agreement, the rights to a work for hire generally vest in the employer”)).

Restrictive covenants
What types of restrictive covenants are recognized and enforceable?

New York courts will enforce reasonable restrictive covenants, including:

  • non-compete agreements;
  • customer and employee non-solicit provisions;
  • non-disclosure agreements;
  • restrictions in connection with the sale of a business; and
  • invention assignments. 

Among other things, an “employer has a legitimate interest in preventing former employees from exploiting or appropriating the goodwill of a client or customer, which has been created and maintained at the employer’s expense, to the employer’s competitive detriment” (BDO Seidman v. Hirshberg, 712 N.E.2d 1220, 1225 (1990)).

Public policy disfavors restrictive covenants where the effect is a loss of the employee’s livelihood (Reed, Roberts Assoc. v. Strauman, 40 N.Y.2d 303, 307 (1976)). Accordingly, courts undertake a fact-intensive analysis to determine whether a restrictive covenant is reasonable. Initially, courts examine whether the employer has a necessary and legitimate protectable interest (e.g., Allways Electric Corp. v. Abrams, 902 N.Y.S.2d 670, 670-71 (1st Dep’t 2010) (because “there is no legitimate employer interest to protect, the restrictive covenants are unenforceable”). Legitimate business interests include, among other things:

  • possession of trade secrets or proprietary information;
  • limiting the solicitation of customers gained using the employer’s resources; and
  • protection from competition by a former employee whose services are unique or extraordinary. 

A restrictive covenant is presumptively “overbroad” where it “prohibit[s] [a former employee] from working” with customers with whom the employee has never acquired a relationship through his or her employment (Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364, 370-71 (2015)). In such circumstances, the employer must show the absence of overreaching, the coercive use of dominant bargaining power, or other anti-competitive misconduct in connection with the agreement’s execution to modify or partially enforce the restriction.

If the interest is legitimate, courts will examine the reasonableness of the covenant, including the proportionality of duration and geographic scope to the interest at stake. A restrictive covenant will be enforced “to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee” (Johnson Controls, Inc. v. A.P.T. Critical Sys., Inc., 323 F. Supp. 2d 525, 533 (S.D.N.Y. 2004)).

Non-compete
Are there any special rules on non-competes for particular classes of employee?

New York’s Broadcast Employees Right to Work Act provides that broadcast industry employers will:

“not require as a condition of employment … that a broadcast employee or prospective broadcast employee refrain from obtaining employment in any specified geographic area; for a specific period of time; or with any particular employer or in any particular industry after the conclusion of employment.” (N.Y. Labor Law § 202-k.)

The financial industry limits its members’ ability to restrict the right of customers to choose the entity or person with whom they choose to do business (e.g., the Financial Industry Regulatory Authority (FINRA) Rule 2140):

“No [FINRA] member or person associated with a member shall interfere with a customer's request to transfer his or her account in connection with the change in employment of the customer's registered representative.”

While a financial industry employer may limit its former employees’ ability to solicit clients, it may not bar its former employees’ new firm from servicing a client if the client did the soliciting (First Empire Secs. v. Miele, 17 Misc. 3d 1108(A), 851 N.Y.S.2d 57 (N.Y. Sup. Ct. 2007)).

New York’s Rules of Professional Conduct for Attorneys state that a lawyer cannot offer or make a “partnership, shareholder, operating, employment, or other similar type of agreement” that restricts a lawyer from practicing law after terminating the relationship, except for an agreement about retirement benefits (22 N.Y.C.R.R. Part 1200.0, Rule 5.6(a)).

Labor relations

Right to work
Is the state a “right to work” state?

New York does not have a right-to-work law.

Unions and layoffs
Is the state (or a particular area) known to be heavily unionized?

New York had the highest union membership rate of any state in 2015 at 24.7% (see Bureau of Labor Statistics, Union Members Summary 2015 (January 28 2016)). New York’s union membership rate is substantially higher than the national rate of 11.1%, and has the highest public sector union membership rate at 72.3%.

What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?

The New York Worker Adjustment and Retraining Notification Act expands the scope of its federal counterpart with respect to covered employers, triggering events and the amount of notice required.

The act applies to private sector employers with at least 50 employees, calculated based on definitions set forth therein (N.Y. Labor Law § 860-a(3); 12 N.Y.C.R.R. § 921-1.1(e)(1)(ii)). Wholly or partially owned subsidiaries and independent contractors may be considered separate employers depending on their level of independence (12 N.Y.C.R.R. § 921-1.1(e)(2)). 

The act mandates that covered employers provide 90 days’ advance written notice to employees in the event of a plant closing, mass layoff, reduction in work hours or relocation of substantially all facility operations (N.Y. Labor Law §§ 860 to 860-l; 12 N.Y.C.R.R. §§ 921-1.0 to 921-9.1). Employees that are required to receive notice are set forth in N.Y. Labor Law § 921-2.3. Triggering events may include the events which affect as few as 25 employees (12 N.Y.C.R.R. § 921-9.1). The act sets forth requirements with respect to look-back or look-forward periods for use in calculating whether successive events are covered by the act (12 N.Y.C.R.R. § 921-2.1(e)).

Discipline and termination

State procedures
Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

New York has no laws regarding discipline and grievance procedures (other than those which may arise indirectly in connection with generally applicable laws, such as those regarding discrimination). 

At-will or notice
At-will status and/or notice period?

New York is an employment at-will state, meaning that an employer may terminate an employee’s employment at any time for any reason, with or without cause or notice, subject to any agreed-on contractual limitations and in compliance with applicable laws (e.g., anti-discrimination laws). 

What restrictions apply to the above?

An employer may not terminate an employee based on the employee’s membership in a protected class (see § 5, above). Likewise, the New York Labor Law prohibits employers from terminating an employee for his or her off-duty political or legal recreational activities outside of work, legal use of consumable products outside of work or membership in a union (N.Y. Labor Law § 201-d). Employers may also not terminate or discriminate against an employee for making a complaint to the employer or the commissioner of labor regarding purported violations of the New York Labor Law, including a violation which “creates and presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud” (N.Y. Labor Law §§ 215 and 740).

Final paychecks
Are there state-specific rules on when final paychecks are due after termination?

Regardless of whether an employee voluntarily leaves his or her job or is terminated, the employer must pay the employee’s wages not later than the regular pay day for the pay period during which termination occurred (N.Y. Labor Law § 191). Wages may be paid by mail, if requested by the employee.