This year has brought significant changes for New York employers at both the state and local level. New York State has increased the minimum wage, and New York City has enacted new laws regarding paid sick leave and discrimination against jobless applicants. 

New York State’s Minimum Wage Increase

New York State has approved significant increases to the state minimum wage over the next three years. On December 31, 2013, the state’s minimum wage will increase from $7.25 per hour to $8.00 per hour. The increase was included in New York’s 2013-2014 budget legislation, which passed on March 29, 2013. The legislation further provides for two future minimum wage increases: to $8.75 per hour on December 31, 2014, and to $9.00 per hour on December 31, 2015. These increases do not apply to tipped food service workers and service employees who are currently covered by the New York State Department of Labor’s Hospitality Industry Wage Order.

The budget legislation also established the Minimum Wage Reimbursement Credit as a measure to subsidize businesses impacted by the minimum wage increases. Employers, including multinational corporations operating in New York, are eligible for this credit for each student employee between the ages of 16 and 19 who is paid the minimum wage rate, subsidizing in whole or in part the increase in the minimum wage as compared to current rates. The law prohibits employers from replacing a non-eligible worker with an eligible worker “solely for the purpose of qualifying for this credit,” though critics argue that this provision will be difficult to enforce. Concerns that the Reimbursement Credit provides an incentive for employers to replace non-student adult workers with student teenage workers are cited in support of a bill introduced in the State Senate seeking to repeal this portion of the law.

New York City’s Paid Sick Leave Bill

On June 26, 2013, the New York City Council voted to enact legislation that will require certain businesses to provide workers with paid sick time. In passing the Earned Sick Time Act (the “Act”) with an overwhelming 47-4 vote, the City Council overrode a veto by Mayor Michael Bloomberg and joined a number of jurisdictions that already require paid sick leave.

Starting in April 2014, employers with twenty or more employees will be required to offer workers five paid sick days per year. Starting in October 2015, the law will apply to businesses employing 15 or more people, as well as to all employers of domestic workers. Key provisions of the Act include the following:

  • Businesses that do not meet the minimum employee threshold are not required to provide paid sick leave, but are required to provide up to 40 hours of unpaid sick leave annually.
  • Covered employees include all full-time and part-time workers who work more than 80 hours per year. Employers must provide these workers with up to 40 hours of sick time annually, calculated at a rate of one hour of leave per 30 hours worked.
  • Employees may use sick leave for a variety of reasons, including the employee’s own “mental or physical illness, injury or health condition,” preventive care, or to care for a sick or injured family member.
  • Employees must work for four months before becoming eligible to use their statutory sick leave, but accrual begins on the first day of employment.
  • Employers may require that sick leave be used in increments of no less than four hours in any one day. In the absence of such a requirement, employees may use their leave in increments of their choosing.
  • Employers may require that employees provide seven days’ advance notice if the leave is foreseeable.
  • Under certain conditions, employers may elect to pay employees for their unused sick time at the end of each year in order to avoid excessive carry-overs. However, employers are not required to pay out unused sick time if a worker retires, resigns, or is terminated for reasons unconnected to use of their sick time.
  • Employers will be required to comply with the Act’s extensive recordkeeping provisions, which include a requirement to inform new hires of their right to paid or unpaid sick leave and a requirement to keep records of all such notices, as well as other compliance records, for at least two years.
  • While the Act prohibits retaliation or interference with an employee’s rights under the statute, the Act does not create an independent private cause of action. Rather, the Department of Consumer Affairs (the “DCA”) will be charged with enforcement through a complaint-driven process. Employers found in violation of the Act will incur civil penalties, and the DCA also is authorized to award monetary and equitable relief to employees or former employees where a violation has been committed.

In anticipation of the new law taking effect, employers should review and revise their leave policies. Businesses that already provide paid or unpaid time off — whether as sick days, personal days, or vacation days — that is as or more generous than the Act’s provisions and can be used under the same conditions will not be required to provide additional sick time under the Act.

New York City’s Unemployed Job Bias Bill

Also this year, the New York City Council enacted legislation prohibiting bias against unemployed job applicants. The law, which took effect on June 11, 2013, amended the New York City Human Rights law to bar employers from basing hiring decisions on employment status without a substantially job-related reason. It also prohibits employers from stating in job postings that current employment is a requirement for a position or that currently unemployed applicants need not apply. The City Council overrode Mayor Bloomberg’s veto and voted 43-4 to enact the law, which is the first of its kind to create a private right of action. New Jersey, Oregon, and the District of Columbia have also enacted legislation to protect unemployed job applicants from discriminatory hiring practices.

Discrimination claims arising under the new legislation may be filed in court or with the New York City Human Rights Commission, which will have the authority to order cessation of discriminatory practices, require the hiring of applicants who have been discriminated against, and impose penalties if an employer fails to comply with such orders.

Employers must take care to balance their search for top candidates with the new law’s requirements in order to minimize the risk of complaints or lawsuits. Businesses should change recruiting practices such as automatically screening out resumes that do not indicate current employment, and should make sure that job postings do not in any way suggest that currently unemployed candidates will not be considered. During the interview process, hiring managers should be sensitive to questions concerning periods of unemployment. Employers should also ensure that the hiring decision-making process is well-documented in order to demonstrate, in the event of a complaint or lawsuit, that decisions were based on reasons other than employment status.