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 http://www.nyc.gov/html/cchr/html/ 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 http://lwd.dol.state.nj.us/labor/lwdhome/content/ 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.