This past year the New York legislature and New York Department of Labor amended several employment laws implementing changes that are set to take effect at the end of 2015 or in early 2016. This update summarizes the new and updated legal requirements imposed by those amendments to help New York employers prepare and comply in 2016.
Minimum Wage Increases
In 2016, wage rates for New York employees will rise statewide. (N.Y. State Dep’t of Labor,Minimum Wage). Starting on December 31, 2015, the New York minimum wage will increase to $9.00 per hour from $8.75. Id. For employers applying a tip credit toward the minimum wage, tipped employees must receive a minimum wage of $7.50 per hour, and the maximum tip credit that an employer may take for service employees will adjust to $1.50 per hour. (N.Y. Dep’t of Labor, Order of Acting Commissioner of Labor Mario J. Musolino on the Report and Recommendations of the 2014 Hospitality Wage Board (Feb. 24, 2015)).
In addition to the minimum wage increase applicable to all employees statewide, the Department of Labor also issued a new wage order increasing minimum wage for employees at certain fast food chain restaurants in New York as part of an incremental plan to establish a $15 minimum wage for fast food workers over the next few years. (N.Y. Dep’t of Labor, Order of Acting Commissioner of Labor Mario J. Musolino on the Report and Recommendations of the 2015 Fast Food Wage Board (Sept. 10, 2015)). Pursuant to the wage order, on December 31, 2015, the minimum wage for fast food workers will rise to $9.75 outside New York City and $10.50 inside New York City. Id. The wage order also sets additional increases in 2016 and beyond which will ultimately increase the minimum wage to $15 by December 31, 2018 for fast food workers in New York City and by July 1, 2021 for fast food workers elsewhere in New York State. Id.
Updated Pay Equity Requirements
In 2015, the New York legislature passed the Achieve Pay Equity bill which is intended to “strengthen New York State law to truly prohibit employers from paying women less than men for performing the same work.” (S.1, 2015-2016 S. Reg. Sess. (N.Y. 2015)). The bill, which will take effect on January 19, 2016, amends Section 194 of the New York Labor Law in the following areas:
- Defenses to Pay Discrimination Claims. Under current law, employers can defend against a pay discrimination claim by demonstrating that a challenged payment structure is justified by a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or “any other factor other than sex.” The Achieve Pay Equity bill replaces the fourth justification with “a bona fide factor other than sex, such as education, training, or experience.” The undefined “bona fide factor” cannot be based on sex, and must be both job-related and consistent with business necessity, which the bill defines as “a factor that bears a manifest relationship to the employment in question.” Even if an employer establishes such a “bona fide factor,” however, an employee may still prevail on his or her claim by demonstrating three things: (1) that the “bona fide factor” has a disparate impact on one sex, (2) that there are alternative employment practices that would serve the same business purpose and would not create a pay differential; and (3) that the employer refused to adopt the alternative practice.
- Compensation Comparison. Section 194 requires that employers provide equal pay to employees in the “same establishment” for equal work; this mandate was generally interpreted to mean within the same workplace. The Achieve Pay Equity bill explicitly and expansively defines “same establishment” to mean workplaces for the same employer located within the same county.
- Wage Disclosure. The Achieve Pay Equity bill amends Section 194 to prohibit employers from banning employee discussions about pay. Instead, employers may only, in a written policy distributed to all workers, “establish reasonable workplace and workday limitations on the time, place and manner for inquiries about, discussion of, or the disclosure of wages.” Employers may limit employee pay discussions by “prohibiting an employee from discussing or disclosing the wages of another employee without that employee’s prior permission.”
- Penalty for Violation, According to the bill, an employer who willfully violates Section 194 will be liable for liquidated damages of 300% of the wages found to be due, as opposed to the current 100% limit.
New Groups Covered Under the New York Human Rights Law
Two bills will take effect on January 19, 2016 that amend the New York State Human Rights Law (the “NYSHRL”) prohibiting discrimination in employment. First, the End Status Discrimination bill will amend the NYSHRL to add familial status to the characteristics of groups protected from employment discrimination. (S.4, 2015-2016 S. Reg. Sess. (N.Y. 2015)). Although aimed at remedying misconceptions about the ability of mothers and women with children to work, the bill applies equally to men and women and is generally intended to create an equal employment playing field for all New Yorkers with children in the workforce. Id. Under the amendments, the NYSHRL will define “familial status” as a person who is pregnant, has a child, or is in the process of securing legal custody of any individual under the age of eighteen. Id.
Second, the Protect Women From Pregnancy Discrimination bill will amend the NYSHRL to require employers to provide reasonable accommodations for pregnancy-related conditions, including any medical conditions related to pregnancy or childbirth. (S.8, 2015-2016 S. Reg. Sess. (N.Y. 2015)). The amendment requires employers to treat pregnancy-related conditions as temporary disabilities and engage in the same reasonable accommodation process as they would with other disabled employees. As with other disabilities, employers are required to provide reasonable accommodations unless doing so would create an undue hardship.
Expanded Sexual Harassment and Sex Discrimination Protection
Finally, two new bills were passed in 2015 which expand sexual harassment and discrimination protections for employees and will take effect on January 19, 2016. First, the Protect Victims of Sexual Harassment bill expands the NYSHRL to include protections for employees of small businesses. (S.2, 2015-2016 S. Reg. Sess. (N.Y. 2015)). Under current law, the sexual harassment prohibitions of the NYSHRL do not apply to employers with fewer than four employees. The Protect Victims of Sexual Harassment bill amends the NYSHRL to extend current legal prohibitions on sexual harassment to include all employers, regardless of size.
New legislation will also contemporaneously increase the amount recoverable in sex discrimination lawsuits. (S.3, 2015-2016 S. Reg. Sess. (N.Y. 2015)). In particular, the Remove Barriers to Remedying Discrimination bill will permit employees who prevail in sex discrimination lawsuits to recover attorneys’ fees. An employer will be responsible for such fees only if it has been found liable for having committed an unlawful discriminatory practice.
Employers in New York State paying minimum wage to any of their employees should review the new minimum wage requirements and ensure that the proper increases are made by December 31, 2015. In addition, employers should review their employment policies, hiring procedures and pay structures to ensure compliance with each of the legislative changes addressed above and implement any necessary changes by the effective date of January 19, 2016.