State and local governments have been hard at work  promulgating new legislation and regulations that impose  new, significant burdens on employers.

New York Department of Labor Law Issues  Regulations Regarding Deductions from Wages

The New York State Department of Labor (the “DOL”) has  issued regulations implementing the recent amendment to  Labor Law § 193, which broadened the scope of permissible  deductions that employers may take from employees’ wages.  Categories of permissible deductions include: (a) those made  for the employee’s benefit, specifically those that provide  financial or other support to the employee, the employee’s  family or a charitable organization; (b) those made to  correct an accidental overpayment; and (c) those made to  recoup an advance of salary or wages.

Deductions for the benefit of the employee must be  specifically authorized by the employee and are limited  to the following categories:

  • Health and welfare benefits, including insurance premiums, gym membership dues, and daycare and  before/after-school care expenses;
  • Pension and savings benefits;
  • Charitable benefits;
  • Representational benefits, such as dues for a labor  organization;
  • Transportation benefits, including for parking passes,  fare cards, etc., that entitle the employee to use mass  transit; and
  • Food and lodging benefits.

Deductions for accidental overpayments are permitted only  for overpayments due to clerical or mathematical errors.  Notice of any deduction in this category must be given  within eight weeks of the error and within either three days  or three weeks before the deduction (depending on the  amount of the deduction). Once notice is timely provided,  deductions can be taken over a period of up to six years. 

Deductions for repayment of advances must be agreed to in  writing before the advance is given, including the amount,  timing and duration of the repayment deductions.  Note  that the regulations define an “advance” as “the provision  of money . . . based on the anticipation of the earning of  future wages” and that “[a]ny provision of money that is  accompanied by interest, fee(s) or . . . anything other than  the strict amount provided, is not an advance” under the  regulations and cannot be repaid through wage deduction.

These regulations, and the underlying statutory change,  expand the range of deductions that employers may properly implement in appropriate circumstances, and in particular provide welcome methods to recover  overpayments and advances that were unavailable under  prior law.

New York Unemployment Insurance Benefits  Narrowed

New York amended the Unemployment Insurance Law,  effective January 1, 2014, to specifically provide that no  unemployment insurance benefits will be paid during  the period of time the claimant receives dismissal pay  (e.g., severance). If the dismissal pay is paid in a lump  sum amount, the dismissal payments are to be allocated  on a weekly basis and the claimant will not be eligible to  receive unemployment insurance benefits for any week to  which the dismissal pay is allocated. The offset does not  apply, however, unless payment of the severance begins  within thirty days of the date of termination.

The Labor Law also was amended to bar employers from  receiving a credit for overpayments of benefits to a former  employee where the overpayment was made because the  employer failed to timely or adequately respond to the  DOL’s request for information. Employers sometimes  choose not to respond to a notice of potential charges  because they do not intend to contest the former employee’s  rights to benefits. Now, if it is later determined that the  employee was erroneously granted benefits, an employer  that failed to respond to the DOL’s notice may be barred  from receiving the economic benefits of a reversal.

U.S. DOL and New York State Join Forces to Battle  Worker Misclassification

The United States Department of Labor, the New York  State Department of Labor and the New York Attorney  General signed a memorandum of understanding to  cooperate with respect to efforts to reduce misclassification  of employees as independent contractors. In a press  release, the United States Department of Labor noted  that “legitimate independent contractors are an important  part of our economy” but that misclassification leads to employees being denied benefits and protections to which they are entitled. The agency also noted that is classification “can create economic pressure for lawabiding business owners, who find it difficult to compete with those who are skirting the law.”

New York City Requires Accommodations for  Pregnancy

New York City amended the New York City Human Rights  Law (the “NYCHRL”) to require all employers with four  or more employees to provide reasonable accommodations  for pregnancy, childbirth and related medical conditions,  unless the provision of such accommodations would cause  an undue hardship. This is a significant expansion of  coverage for pregnant women. Under previously existing  law, including the Pregnancy Discrimination Act, the  Americans with Disabilities Act and the New York State  Human Rights Law, pregnancy itself is not considered  a disability (although pregnancy-related impairments or  complications are disabilities under the ADA and the state  human rights law).

The reasonable accommodations required under the  NYCHRL are those necessary to enable the woman to  perform “the essential requisites of the job.” Although the  new law does not provide an exhaustive list of what might  constitute a reasonable accommodation, specific examples  include: bathroom breaks, leave of absence for a period of  disability related to childbirth, breaks to facilitate increased  water intake, periodic rest for those who stand for long  periods of time, and assistance with manual labor. It is  unlawful to refuse requests for reasonable accommodations  when the employee’s pregnancy, childbirth or related  medical condition is known, or should have been known, to the employer unless the employer can show the accommodation would cause an undue hardship.

Factors that an employer may consider in determining  whether a requested accommodation is an undue hardship  include the nature and cost of the accommodation, the  overall financial resources of the facility and the employer,  the number of persons employed at the particular facility, and the overall size of the business. An employer also can  raise an affirmative defense that even with the requested  accommodation the employee could not meet the “essential  requisites of the job.”

The new law also requires that employers provide all  employees (not just female employees) with a notice  describing employees’ right to be free from discrimination  related to pregnancy, childbirth, and related medical  conditions. Notice must be provided to new employees  at the start of their employment and within 120 days of  the effective date of the new law (i.e., May 30, 2014) to  existing employees. New York City has provided posters  in seven languages at publications/pregnancy-employment-poster.shtml.

New York City Earned Sick Time Act

Last year, over then-Mayor Bloomberg’s veto, the New York City Council passed the Earned Sick Time  Act, mandating that as of April 1, 2014 employees of  businesses with twenty or more employees be provided up  to forty hours of paid sick time each year (unpaid leave  must be provided to employees in businesses with less than  twenty employees) and, as of October 1, 2015 expanding  the requirement of paid leave to businesses with fifteen  or more employees. In late February 2014, the New York  City Council expanded the law to cover all businesses with  five or more employees as of the original bill’s effective  date of April 1, 2014. The City Council also broadened  the definition of “family member” for which sick time can  be used to include not only children, spouses/domestic  partners and parents, but also grandchildren, grandparents  and siblings.

Most employers that provide vacation and sick days or  have a paid time off (“PTO”) program often are able to  comply with the Earned Sick Time Act without having to  provide additional time off, but modifications to existing  policies typically will be required.

New Jersey Extends Discrimination Protection  to Pregnancy

Similar to the extension of the NYCHRL undertaken  by New York City, New Jersey has amended its Law  Against Discrimination to specifically address workplace  discrimination against women because of pregnancy,  childbirth, or related medical conditions. Under the amendments, employers must provide reasonable accommodations to pregnant women who request an  accommodation  on  advice  of  a physician,  including  bathroom breaks and breaks for increased water intake,  periodic rest, assistance with manual labor, modified work  schedules and job restrictions, as well as temporary transfers  to less strenuous or hazardous work. Employers may deny  requests for an accommodation if it would cause an undue  hardship. Additionally, the amendments specifically provide  that they are not meant to increase an employee’s right to  leave (whether paid or unpaid).

New Jersey Requires Notice Regarding Gender  Equality

New Jersey now mandates that employees be provided  with notice of their right to be free from gender-based  discrimination in the workplace. Notices are available  on the website of the New Jersey Department of Labor  and Workforce Development in English and Spanish and  include information related to applicable state and federal  laws. See employerpacketforms.html.

New Jersey employers having fifty or more employees  (regardless of whether those employees work in New  Jersey or other states) are required to post the notice in a  conspicuous place at the workplace or on the employer’s  intranet. The statute also requires that the notice be  distributed directly to employees as follows: (a) to current  employees by February 5, 2014; (b) to new employees hired  after January 6, 2014 at the time of hire; (c) to all employees  annually on or before December 31 of each year; and (d)  at any time an employee requests a copy. Furthermore,  employers are required to obtain signed acknowledgments  or electronic verifications from each employee.

Jersey City Paid Sick Time Ordinance

Jersey City now requires that private sector employers with  ten or more Jersey City employees provide a minimum of  one hour of paid sick leave for every thirty hours worked  by an employee, up to a maximum of five days of sick leave  per year. Private sector employers with fewer than ten Jersey  City employees are required to provide unpaid sick leave  in similar amounts. Employers are required to provide  written notice to employees of their rights under the new  law. Similar to the expanded New York City sick time law,  sick time may be used to take care of children, spouses/ domestic partners, parents, grandparents, grandchildren  and siblings.