This year, a number of New York State laws aimed at expanding protections for women in the workplace and regaining New York’s place among the most progressive employment jurisdictions in the country went into effect. In particular, these laws—building upon the wave of momentum towards pay equity generated by the Obama administration’s focus on the federal Equal Pay Act and the national movement towards greater wage transparency— strengthen New York’s equal pay requirements. The laws also prohibit New York employers from discriminating based on familial status and require employers to reasonably accommodate employees with pregnancy-related and childbirth-related conditions, among other changes. This article examines the most impactful of the recent changes to New York State law, and provides practice tips for employers regarding compliance and risk prevention. Background On October 21, 2015, New York Governor Andrew Cuomo signed into law a series of bills known as the “New York Women’s Agenda.” These bills, aimed at “break[ing] down barriers that perpetuate discrimination and inequality based on gender,”1 went into effect on January 19, 2016. Three of the bills, in particular, are most applicable to larger employers: (1) one modifies the New York Labor Law’s equal pay provisions to afford employees broader protections and prevent employers from prohibiting employees from discussing their wages; (2) another prohibits employment discrimination based on familial status; and (3) a third requires employers to provide reasonable accommodations for pregnancy-related and childbirth-related conditions. Changes to the Equal Pay Act The Achieve Pay Equity Act (APEA) (bill number S.1/A.6075) amends New York State’s equal pay law (New York Labor Law Section 194(1)) in several significant ways that decrease the effectiveness of many of the levers that employers traditionally have used to defend against equal pay lawsuits. As such, the APEA appears to hold the greatest potential risk among the Women’s Agenda for New York employers. First, the APEA expands the workplace locations that may be compared for purposes of determining whether an employer pays men and women equally. Like its federal counterpart, the New York equal pay law prohibits an New York State Expands Protections for Women in the Workplace By Gary D. Friedman and Thomas McCarthy* *Weil Summer Associate Genna Sinel also contributed to the drafting of this article
employer from paying wages to an employee at a lower rate than the rate at which it pays employees of the opposite sex in the “same establishment” for “equal work” performed under “similar working conditions.” The “same establishment” requirement has traditionally meant that to establish an equal pay claim, a plaintiff must establish that he or she was paid less than employees working in the same physical workplace location. The APEA, however, expands the definition of “same establishment” under New York law to include all of an employer’s locations in the “same geographical region, no larger than a county,” taking into account factors such as population distribution and economic activity. As a result, while the relevant comparators for an equal pay claimant under the federal Equal Pay Act are generally limited to other employees working in the same store, warehouse or office as the claimant, the pool of relevant comparators for an equal pay claimant under New York law may now extend to other employees at all workplace locations maintained by the employer in a given municipality or county. Thus, even if a company pays all sales clerks within a particular store in New York equally, a female sales clerk in that store may be able to bring an equal pay claim under New York law if she is paid less than a male sales clerk employed at another of the company’s stores in a different town in the county. As such, New York employers should be prepared to justify disparate wages in separate locations. Second, the APEA narrows the exception to New York’s equal pay requirement for pay differentials based on factors other than sex. Previously, New York’s equal pay law, like the federal Equal Pay Act, required employers to pay men and women equally for equal work, unless a pay differential is based on “any… factor other than sex.” As amended by the APEA, the New York Labor Law now limits the exception to the equal pay requirement to pay differentials based on a “bona fide factor other than sex, such as education, training, or experience.”2 While this change may appear small on its face, it increases the burden placed on employers to prove that the “catch-all exception” applies. The APEA further requires the “bona fide factor” to be “job-related with respect to the position in question and … consistent with business necessity.”3 These concepts, borrowed from Title VII case law, are found nowhere in the federal Equal Pay Act. As a result, many federal Equal Pay Act cases—traditionally an important guidepost for interpreting New York’s equal pay law—have now been rendered irrelevant for the purpose of interpreting the New York State statute. New York employers should review whether the factors that comprise their compensation decisions (market forces, for example) would meet the new “bona fide factor” test. Even if an employer can meet that test, however, an employee may still prevail on an equal pay claim under the New York Labor Law, as amended by the APEA, if the employee can show that (i) the “employer uses a particular employment practice that causes a disparate impact on the basis of sex,” (ii) “an alternative employment practice exists that would serve the same business purpose and not produce such [a] differential,” and (iii) “the employer has refused to adopt such an alternative practice.” Employers should thus be particularly attuned to any equal pay allegations by employees that are accompanied by suggestions for modifying the employer’s pay practices. A dismissive response to an employee’s suggestion may later be cited by an employee in an equal pay action. Third, in a change that has generated comparatively less coverage, the APEA facilitates employees’ efforts to discover any pay disparities that may exist by providing that New York employers may not prohibit
[E]ven if a company pays all sales clerks within a particular store in New York equally, a female sales clerk in that store may be able to bring an equal pay claim under New York law if she is paid less than a male sales clerk employed at another of the company’s stores in a different town in the county.
employees from inquiring about, discussing or disclosing their own or other employees’ wages. The APEA does, however, permit employers to enact “written policies” that impose “reasonable workplace and workday limitations on the time, place and manner” of employees’ discussions about wages, such as, for example, prohibiting employees from discussing another employee’s wages without that “employee’s prior permission.”4 An employee’s failure to abide by such a policy provides an affirmative defense for the employer, should the employee bring a claim alleging that the employer took an adverse employment action against him or her for inquiring about, discussing or disclosing wages. Employers should also note that the law contains a carve-out that allows employers to prohibit employees who have access to wage information as part of their essential job functions, such as human resources and payroll employees, from disclosing the wages of other employees to individuals who do not otherwise have access to such information, aside from disclosures in connection with a complaint, charge, or investigation.5 While the National Labor Relations Act (the “NLRA”) has long been interpreted to prohibit employment policies that ban employee discussions of wages, its scope is limited (e.g., the NLRA does not cover “supervisors”). Many employers—in the interests of keeping competitively sensitive pay information confidential from competitors and preventing workplace conflicts over justifiable pay differences— therefore maintain policies in their employee handbooks or standard confidentiality and nondisclosure agreements prohibiting employees from discussing their wages. In the wake of the APEA, however, companies that employ workers in New York will have to review their policies to ensure compliance with the APEA’s new ban on policies that prohibit employees from discussing their pay. Beyond the impact on basic company policies, the APEA’s pay transparency provisions raise questions about the confidentiality of wage information generally. Plaintiffs’ lawyers will likely argue that, at least within New York State, the legislature has determined that compensation information is not information that should be declared confidential in a litigation context. Some courts may reevaluate whether sealing compensation information in filings is appropriate, or whether to endorse confidentiality stipulations between litigants that declare compensation information confidential. Furthermore, the EEOC has proposed revising the Employer Information Report (EEO-1) to include collecting pay data from employers with 100 or more employees.6 These “sunshine” efforts surrounding pay data may have significant competitive consequences. Finally, as amended by the APEA, the New York Labor Law now provides for liquidated damages of up to three hundred percent (300%) if an employer willfully violates the equal pay provisions. By contrast, the federal Equal Pay Act permits recovery of liquidated damages up to two hundred percent (200%) for a violation. Familial Status Discrimination The End Family Status Discrimination (bill number S.4/A.7317) modifies the New York State Human Rights Law (NYSHRL) to add “familial status” as a protected category under the employment discrimination provisions of the NYSHRL, a separate classification that does not exist under Title VII. As amended, the NYSHRL defines “familial status” as being pregnant, having custody of a minor child, or being in the process of obtaining legal custody of a minor child.7 New York employers are therefore prohibited from discriminating against an employee or applicant based on the fact that he or she has small children at home. The law also forbids employers from asking about familial status during the hiring process. The legislative history of the bill suggests that state lawmakers were particularly concerned about single parents who are denied jobs or promotions based on employers’ stereotypes about a single parent’s level of commitment to his or her job. In the wake of these changes at the state level, New York City Mayor Bill de Blasio signed legislation on January 5, 2016, expanding the New York City Human Rights Law’s (NYCHRL) protections. As a result, as of May 4, 2016, the NYCHRL now prohibits discrimination in employment based on “caregiver status.” The NYCHRL defines “careg
who provides direct and ongoing care for either a minor child or care recipient, regardless of whether the child or care recipient is biologically or legally related to the caregiver.8 “Care recipient” is defined as anyone with a disability who (i) is a “covered relative” or (ii) is a person that resides in the caregiver’s household.9 These changes to the NYCHRL expand the City law’s protections beyond “familial status.” Whereas the New York State law was designed to combat assumptions about parents’ commitment to their jobs, the City law addresses similar assumptions about employees who care for elderly or disabled friends or family members. Reasonable Accommodation for Pregnancy The Protect Women from Pregnancy Discrimination Act (bill number S.8/A.4272) requires New York employers to provide reasonable accommodations to employees and applicants with a pregnancy-related condition. While the New York State Division of Human Rights has interpreted the sex and disability protections of the New York State Human Rights Law to encompass sex and disability conditions, the legislature was concerned about confusion in the case law, and codified the Division’s existing interpretation of the law. The law defines “pregnancy-related condition” to mean “a medical condition related to pregnancy or childbirth that inhibits the exercise of a normal bodily function.”10 Employers should re-evaluate their disability policies with respect to reasonable accommodations and determine how to integrate pregnancy-related and childbirth-related conditions. Some “reasonable accommodations” could include more rest for pregnant employees and/or modified work schedules. Employers with employees in positions that require intense physical labor should consider whether they have the flexibility to offer temporary administrative work. Employers should also be cognizant of the fact that the accommodation mandate does not only apply to employees before the birth. The Fair Labor Standards Act already requires all covered employers to provide break time for nursing mothers to express breast milk, as well as a separate space in which to do so that is not a bathroom, but new mothers may need additional accommodations to perform the necessary functions of their positions. Finally, the Remove Barriers to Remedying Discrimination Act (bill number S.3/A.7189) revises § 296 of the New York State Executive Law to provide for the award of attorneys’ fees in a successful claim of sex-based discrimination. Those who practice regularly in this area are well aware that Title VII and other federal discrimination statutes already provided for attorneys’ fees, as did relevant New York City statutes and New York State equal pay law. Thus, plaintiffs asserting discrimination claims under New York State law would often include federal or city discrimination claims in the action in order to collect attorneys’ fees. The modification to the state law brings it more in line with the federal and city statutes in allowing for the award of attorneys’ fees on successful sex discrimination claims, although it should be noted that attorneys’ fees are still not available under New York State law for discrimination claims based on age, race, sexual orientation, or any protected characteristics other than sex. Practice Tips The following are some suggested ways in which employers may respond to the new state gender legislation: ■ Perform an analysis of the company’s workforce to determine whether any pay disparities exist between employees of the opposite sex performing the same job. This analysis should extend to all locations within a county, so that employers can identify and be prepared to defend any differences between separate locations.
■ Consider standardizing job titles across the entire workforce. This could allow for more cost-effective identification of pay differentials. ■ Review wage policies to determine whether differences in wages can be explained by any of the specific factors identified in the statute. Instruct management to carefully consider any proposed changes to the pay system aimed at addressing pay disparities. ■ Review disability and accommodation policies and integrate pregnancy-related and childbirth-related impairments into the process. ■ Educate and train individuals with the authority to hire, fire, or promote employees on assumptions regarding the work capabilities of parents or guardians of small children. 1. http://assembly.state.ny.us/leg/?default_fld=%0D%0A&bn= A04272&term=2015&Summary=Y&Actions=Y&Memo=Y 2. N.Y. Labor L. Art. 6, § 194(1)(d). 3. Id. 4. N.Y. Labor L. Art. 6, § 194(4). 5. Id. 6. https://www1.eeoc.gov/eeoc/newsroom/release/1-29-16.cfm 7. N.Y. Exec. L. § 292(26). 8. N.Y.C. Admin Code § 8-102. 9. Id. 10. N.Y. Exec. L. § 292(21-f).