Summary of Employment Proposals from the Executive’s Budget

On January 17, 2024, New York Governor Kathy Hochul released the proposed Executive Budget for fiscal year 2025. The Budget proposes a number of changes to New York’s employment laws.  Here is the summery of key proposals: 

Sunset of COVID-19 Paid Leave

The Budget includes a proposal that would bring an end to the requirement that employers provide mandatory paid sick time – above and beyond what is required under the New York State Paid Sick Leave Law – for employees who are under a mandatory order of quarantine or isolation because of COVID-19. If enacted, the amendment will sunset the requirement on July 31, 2024.

Expanding NYDOL Enforcement Power to Include Seizure of Employer Assets

The Budget further aims to expand recovery methods for violations of certain wage payment provisions under the Labor Law. The Budget proposes to give the New York Department of Labor (“NYDOL”) the ability to seize employer assets to satisfy wage debts owed by employers to employees.  The proposal would empower the Commissioner of Labor to directly execute a wage violation order that has been filed with the county clerk of the employer’s residence or place of business. The Commissioner would be empowered to issue a warrant to any officer or employee of the NYDOL who may then file the warrant with the appropriate county clerk. The Budget proposal grants the Commissioner (or the designated officer or employee of the NYDOL) the same power conferred upon sheriffs under the laws and rules of New York State to seize and sell the employer’s property for owed wages.

Alternatively, the Commissioner would be granted the power to directly issue a warrant to the sheriff of the employer’s county, commanding them to seize and sell real property of the employer-within that county. The sheriff would be responsible for filing this warrant with the appropriate county clerk and then executing the warrant.

Expanding Disability Leave Protections and Increasing Maximum Short-Term Disability Benefits 

Presently, covered New York employees are entitled to collect statutory short-term disability benefits due to a qualifying off-the-job illness or injury for a period of up to 26 weeks per 52-week period. The budget proposes to extend job protection to employees during a disability leave period and would further require continuation of existing health benefits during a disability leave in the same manner as is currently required under the NYS Paid Family Leave Program (the “NYPFL”).  This would effectively create a statewide paid “mini-FMLA” program whereby employees experiencing a period of disability may be entitled to up to 26 weeks of protected leave for such condition, upon timely return from which they would be entitled to be reinstated to their same or a comparable position, with comparable benefits, pay, and other terms and conditions of employment. The existing 26-week combined cap on receipt of disability and NYPFL benefits in a given 52 week period would continue under the proposal.

In addition, for the first time since 1989, the Budget proposes an increase to the maximum weekly benefit amount for statutory short-term disability benefits. The current maximum weekly benefit of $170 would be amended to instead eventually be tied to the Statewide Average Weekly Wage (“SAWW)” to keep pace with wage growth. The SAWW is based on the average weekly wage paid in New York State during the previous calendar year.

The increases would phase in and benefit amounts would be tiered depending on the length of a disability leave.  Beginning as of January 2025, the proposed benefit rate would increase to 50% of the employee’s average weekly wage (“AWW”) up to a weekly maximum of $400 per week for the first 12 weeks of a disability leave, and a rate of 50% of the employee’s AWW capped at $280 per week for the 12th through the 26th weeks of leave.  These amounts would increase annually through 2029, landing at a rate of 67% of an employee’s AWW up to a weekly maximum of 67% of the SAWW for the first 12 weeks of disability leave, and 67% of the employee’s AWW capped at $280 per week for the remaining weeks. Accordingly, the proposal would increase employee contributions toward disability benefits to one-half of 1% of the employee’s wages, not to exceed 40% of the average of the combination of all employee and employer contributions to disability benefits during the prior calendar year, as determined by the Superintendent of Financial Service.

Lactation Breaks

The Budget includes a proposal that would require paid breaks for breast milk expression in the workplace. Presently, employers are required to provide reasonable unpaid break time or permit an employee to use paid break or meal time to express breast milk during the workday. The proposal would require employers to provide paid lactation break time for up to twenty minutes and permit employees to use existing paid break or meal time for time needed in excess of twenty minutes.

Paid Leave for Prenatal Appointments

The Budget includes a proposal that would expand the New York State Paid Family Leave Law (“NYPFL”) to include partially paid leave for prenatal appointments. The NYPFL presently provides eligible employees with up to 12 weeks of partially paid leave for reasons that include caring for a covered family member with a serious health condition, bonding with a newly born or placed child, and certain reasons related to military exigency. The proposed amendment would expand the NYPFL to permit up to 40 hours of leave for eligible employees to attend prenatal appointments above and beyond the existing 12 weeks of leave currently available.

Eliminating Liquidated Damages for Some Pay Frequency Claims

As reported in another article in this Newsletter, the Budget includes proposed legislation precluding recovery of liquidated damages for violations of the Labor Law’s frequency of payment provisions. 

What’s Next?

While Governor Hochul is responsible for proposing a comprehensive budget, there is no guarantee that the proposed budget, in its current form, will be approved. The New York State Legislature will next review and possibly modify the budget before enaction. Upon approval, amendments will take effect on the sixtieth day after the budget is signed into law.

New York City Proposes Changes it needs to Paid Sick Leave Law

The New York City Council has passed a bill (Proposed Int. No. 563-A) that would create a private right of action to seek damages and other relief for violations of New York City’s Earned Safe and Sick Time Act (ESSTA). Unless Mayor Eric Adams vetoes the bill within 30 days, it will become a law and apply to all employers covered by ESSTA.

By way of background, ESSTA permits employees to use ESSTA leave for the care and treatment of sickness affecting themselves or a family member or to seek legal and social service assistance, or take other safety measures if the employee or a family member is a victim of an act or threatened act of domestic violence or unwanted sexual contact, stalking, or human trafficking. Currently, the law permits employees who claim a violation of their rights under ESSTA to file a complaint with the New York City Department of Consumer and Worker Protection (DCWP).

The recently proposed amendment would allow individual employees to file a complaint in court against the employer, versus going through the DCWP. This could increase the number of complaints against employers in New York City.

The proposed amendment to ESSTA would allow employees who allege a violation of their rights to commence a civil action in court, where employees could seek compensatory damages, injunctive and declaratory relief, attorneys’ fees and costs, as well as other relief the court deems appropriate.

Also, the proposed amendment would increase the amount of monetary damages that individual employees could recover should they pursue recourse individually. Specifically, while the current law permits the DCWP to impose a civil penalty upon an entity or person found to have violated ESSTA of $500 for the first violation, $750 for subsequent violations that occur within two years of any previous violation (but not to exceed $750 for the second violation, and $1000 for each succeeding violation), the proposed amendment would allow such penalties per instance of violation.

The statute of limitations for commencing a civil action is two years.

Employers covered by ESSTA should write to the Mayor’s office and urge him to VETO this bill. The DCWP already imposes significant burdens on employers in New York City with the manner with which it enforces the law and the penalties it seeks, but by empowering employees to seek recourse independently in court, employers will face additional litigation and cost expenses associated with ESSTA compliance.

New York Employers Required to Notify Employees of UI Eligibility upon a “Reduction in Hours”

Effective November 13, 2023, Section 590 of New York Labor Law was amended to require employers to inform employees of their right to apply for unemployment benefits with the New York State Department of Labor (NYDOL) “at the time of each permanent or indefinite separation from employment, reduction in hours, temporary separation, [or] any other interruption of continued employment that results in total or partial unemployment.”  The  eligibility notice must be “in writing on a form furnished or approved by” NYDOL.  The notification will further be required to include: (i) “the employer’s name and registration number”; (ii) “the address of the employer to which a request for remuneration and employment information with respect to such employee must be directed”; and (iii) any other information that may be required by the NYDOL commissioner.

For per diem workers like home care aides, it is unclear what would constitute a reduction in hours.  Based on the language in the law, the stated intention, and references to Unemployment Insurance Law provisions about what reductions in hours qualify as a reduction for purposes of UI benefits, it appears that employees whose hours are reduced through no fault of their own to less than 30 hours per week, and they earn $504 or less in gross pay, would qualify to receive these notices.  However, please be sure to check with counsel before making any blanket determinations for your organization.

DOL Issues Final Rule on Independent Contractor Classification

On January 9, 2024, the US Department of Labor (“DOL”) released the final rule, changing the criteria for classifying independent contractors under the Fair Labor Standards Act (“FLSA”).  The final rule, which rescinds the 2021 rule, will take effect on March 11, 2024.

As an initial matter, this DOL rule determines whether a worker is an employee or non-employee of an employer for purposes of minimum wage and overtime rules.  Other independent contractor tests, such as those under the National Labor Relations Act, determine a worker’s status for other purposes, such as whether or not an employee can join a company’s union.  And then there are of course definitions of “employment” and non-employees for purposes of other laws, such as the Affordable Care Act.  Again, however, this article only focuses on the DOL rule that defines what workers are entitled to minimum wage and overtime protections, and from which employers. 

Pursuant to the 2021 worker classification rule, the analysis for classifying a worker involved two main factors; (1) the nature and degree of control over the relevant worker; and (2) an individual’s opportunity for profit or loss.  The 2021 rule also required analysis of 3 less critical factors; (1) the amount of skill required for the work; (2) the degree of permanence of the working relationship; and (3) whether the work is part of an integrated unit of production. 

The new rule, which restores the former “totality of the circumstances” test, considers the following six factors:

1. The degree to which the employer controls how the work is done.

2. The worker’s opportunity for profit or loss.

3. The amount of skill and initiative required for the work.

4. The degree of permanence of the working relationship.

5. The worker’s investment in equipment or materials required for the task.

6. The extent to which the service rendered is an integral part of the employer’s business.

Furthermore, the analysis under the 6th factor has been changed to a consideration of whether the service provided by the worker is critical, necessary or central to the company’s business.  In contrast, the previous “test” looked at whether or not the worker was an integral part of the business.

DOL has indicated that it will be providing the public with additional guidance in order to aide in employer compliance.  However, DOL has noted that the above six factors are not exhaustive, that neither factor will be weighed heavier than another, and that indeed the entire situation will dictate the DOL’s conclusions.

Employers who rely on independent contractors should periodically conduct internal independent contractor audits to ensure that the workers to whom they are paying “project fees” or other similar lump sum amounts are proper methods of compensation for the worker at issue.  This new DOL rule underscores the importance of conducting these audits because the new rule will deem more workers as “employees” for purposes of minimum wage and overtime.

EEOC Implements New, Faster, System for Filing Charges Against Employers

On December 13, 2023, the U.S. Equal Employment Opportunity Commission (EEOC) announced the launch of e-file for attorneys, allowing attorneys to file charges of discrimination electronically on behalf of their clients, enabling a more efficient process for charging parties and the EEOC. Prior to implementing this electronic filing option, according to the EEOC, approximately a third of the charges received are filed by attorneys on behalf of their clients using mail, fax, or hand-delivery, and those charges are then processed by the EEOC manually. This electronic filing option will now enable attorneys representing charging parties to immediately upload a signed charge, or create a charge for their client to sign and submit through the EEOC Public Portal.

Under this e-file option, attorneys will not be able to file amended charges through the application, and will not be able to file a charge without disclosing a client’s identity. Once submitted, attorneys will be able to access the charge through the Public Portal.

A charge of discrimination is a signed statement asserting that an employer, union or labor organization engaged in employment discrimination, and requests the EEOC to take remedial action. If an employee believes they have been discriminated against in the workplace based on their age, disability, sex (including pregnancy, sexual orientation and gender identity), race, color, religion, national origin or genetic information, they must file a charge of discrimination with the EEOC prior to filing a lawsuit against their employer.

New York Employers Must Update Template Settlement/Release/Severance Agreements 

New York State recently enacted additional restrictions on confidentiality/nondisclosure language that can be contained in employment-related release agreements (including severance, separation, and settlement agreements).  Employers that have pending employment claims which they are settling, or employers who use template separation and release agreements, should review this article in detail.

Effective November 17, 2023, employers cannot include confidentiality and nondisclosure language within settlement agreements where, “the factual foundation…involves discrimination, harassment or retaliation, in violation of laws prohibiting discrimination, including discriminatory harassment or retaliation…unless the condition of confidentiality is the [individual’s] preference.”  This “preference” must be in writing.

These amendments also give individuals “up to twenty-one (21) days to consider” inclusion of the confidentiality provision. This amendment effectively makes the previously non-waivable Consideration Period waivable; individuals are now able to sign off on confidentiality language immediately upon being presented with the release, rather than waiting three weeks. 

Significantly, this law does not amend Section 5003-B of the New York Civil Practice Laws & Rules (CPLR) which requires plaintiffs to wait the full 21 days before signing an agreement containing a nondisclosure provision that would prevent the underlying facts and circumstances of any discrimination claim. This CPLR provision applies only to pending litigations and filed administrative charges, not pre-litigation disputes (including release of claims through a separation/severance agreement).

In addition, a release of claims in an employment agreement, separation agreement, release agreement, or similar agreement is unenforceable if it requires the individual who has breached a confidentiality provision of such agreement to pay liquidated damages or to forfeit the agreement’s consideration (i.e., money paid by the employer or former employer per the terms of the agreement).  Furthermore, such agreements cannot contain language where an individual states that the individual “was not in fact subject to unlawful discrimination, including discriminatory harassment, or retaliation[.]” Should the agreement contain such language the release of claims in the agreement would be void.

Employers should review – and modify where necessary – their separation, severance and settlement agreements that include release of New York-based claims to ensure compliance with these amendments to New York law.  Employers should also review agreements that are currently being considered or have been entered into from November 17 to present to ensure compliance and to determine whether modification (retraction, amendment, or supplementation) is necessary.

Reminder of New NYS Laws Taking Effect in the First Six Months in New York

As New York employers kick off the new year, they should keep the following key dates in mind:

  • February 15, 2024 – The statute of limitations for filing administrative claims of unlawful discrimination under the New York State Human Rights Law extends from 1 year to 3 years (running from the date of the alleged unlawful discriminatory practice). Claims of sexual harassment are already subject to this 3-year limitations period.
  • March 12, 2024 – New York employers will be prohibited from requesting or requiring that an employee or applicant disclose any username, password, or other means for accessing a personal account through specified electronic communications devices as a condition of hiring, employment status, or for use in disciplinary actions. The law provides exceptions, including for accounts used for business purposes and devices paid for by the employer.
  • May 20, 2024 – An amendment to the New York Labor Law goes into effect which sets forth wage and job protections for freelance workers (defined in the law as workers hired as an independent contractor for at least $800). The law requires companies that engage covered freelancers to enter into written agreements with such workers, which agreements must contain certain minimum requirements. This includes the name and mailing address of both parties, an itemization of services to be provided, the value of the services, the rate and method of compensation, the date on which payment must be made, and the date by which a worker must submit a list of all services rendered to meet any payment processing deadlines.  There is already a similar law in effect in New York City, but this law applies Statewide.

Reminder: New Minimum Salary and Minimum Wage Rates are in Effect

The New York State Department of Labor (NYSDOL) has adopted proposed regulations to align the state’s industry-specific wage requirements with the January 1, 2024, increases in the state minimum wage.

In May 2023, Governor Kathy Hochul signed into law a bill to increase New York’s minimum wage again (to $17.00 an hour by 2026). The first increase (to $16.00 an hour) is effective on January 1, 2024, and subsequent changes will take effect on January 1, 2025, and January 1, 2026.

As many of the industry-specific wage requirements in the New York Wage Orders are based on the minimum wage, NYSDOL has adopted regulations to adjust the New York Wage Orders on various issues, including credits against the minimum wage and the minimum salary threshold for certain overtime exempt employees.

Changes to Home Care Worker Minimum Wage

The minimum wage for home care workers has also been updated, effective January 1, 2024.  The DOL has updated its Home Care Worker Minimum Wage poster, which can be found here

Changes to Minimum Salary Requirements for Overtime Exempt Employees

To be an exempt executive or administrative employee under New York law, the employee must be paid on a salary basis and meet the salary level threshold, in addition to meeting the duties prong of the exemption. This salary threshold is set by New York Department of Labor as being 75 times the applicable minimum wage. 

The minimum salary amounts for administrative and exempt employees, starting January 1, 2024 are:

For New York City, Westchester, and Long Island:

  • 2024 – $1,200.00/week ($62,400.00 per year)
  • 2025 – $1,237.50/week ($64,350.00 per year)
  • 2026 – $1,275.00/week ($66,300.00 per year)

For the rest of New York:

  • 2024 – $1,124.20/week ($58,458.40 per year)
  • 2025 – $1,161.65/week ($60,405.80 per year)
  • 2026 – $1,199.10/week ($62,353.20 per year)

Changes Affecting Food Service Workers Under Hospitality Wage Order

A “food service worker” is an employee other than a delivery employee who is primarily engaged in the serving of food or beverages to guests, patrons, or customers and who regularly receives tips from such guests, patrons, or customers.  The modified minimum cash wage, and overtime rates, and tip credit for such employees are:

For New York City, Westchester, and Long Island:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Minimum Wage$16.00$16.50$17.00
Cash Wage$10.65$11.00$11.35
Overtime Cash Wage   $18.65$19.25$19.85
Tip Credit$5.35$5.50$5.65

For the rest of New York:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Minimum Wage$15.00$15.50$16.00
Cash Wage$10.00$10.35$10.70
Overtime Cash Wage   $17.50$18.10$18.70
Tip Credit$5.00$5.15$5.30

Changes Affecting Service Employees Under Hospitality Wage Order

A service employee is an employee other than a food service worker who receives tips at or above a required “tip threshold” rate of tip compensation.  The modified minimum cash wage, overtime rates, tip credit, and tip threshold for such employees are:

For New York City, Westchester, and Long Island:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Minimum Wage$16.00$16.50$17.00
Cash Wage$13.35$13.75$14.15
Overtime Cash Wage   $21.35$22.00$22.65
Tip Credit$2.65$2.75$2.85
Tip Credit Threshold  $3.45$3.55$3.65

 For the rest of New York:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Minimum Wage$15.00$15.50$16.00
Cash Wage$12.50$12.90$13.30
Overtime Cash Wage   $20.00$20.90$21.30
Tip Credit$2.50$2.60$2.70
Tip Credit Threshold   $3.20$3.30$3.40

Changes to Meal Credit

Meals furnished by an employer to an employee may be considered part of an employee’s wages under various wage orders. Thus, some employers take a meal credit against an employee’s wages for each shift that the employee is furnished a meal.

For New York City, Westchester, and Long Island:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Food Service Employees   $3.85$3.95$4.05
Service Employees  $4.45$4.60$4.75
Non-Service Employees  $5.50$5.65$5.80

 For the rest of New York:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Food Service Employees   $3.80$3.95$4.10
Service Employees  $4.10$4.25$4.40
Non-Service Employees  $5.20$5.35$5.50

Changes to Uniform Allowance

Under New York law, if an employer requires an employee to wear a certain uniform, the employer can launder and maintain the uniform or pay the employee Uniform Maintenance Pay. Uniform Maintenance Pay is paid weekly and is dependent on the hours worked by the employee during the week. Under the Miscellaneous Wage Order, this allowance can be set off by monies paid in excess of minimum wage. Calculations need to be reviewed with the increased minimum wage to ensure any excess covers the allowance.

For New York City, Westchester, and Long Island:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Work >30 Hours$19.90$20.50$21.10
Work 20-30 Hours   $15.75$16.25$16.75
Work <20 Hours $9.50$9.80$10.10

For the rest of New York:

 Eff. 1/1/2024   Eff. 1/1/2025   Eff. 1/1/2026
Work >30 Hours$18.65$19.25$19.85
Work 20-30 Hours   $14.80$15.30$15.80
Work <20 Hours  $8.95$9.25$9.55

If you have any questions about these rates or compliance with these rates, please be sure to contact your Forework account managers.

National Labor Relations Board Expands Definition of Joint Employment

The National Labor Relations Board (“NLRB” or the “Board”) recently expanded its rules for defining “joint employment” status for purposes of the National Labor Relations Act (the “Act”).  The new rule effectively lowers the bar for when two separate and distinct companies will be considered to be joint employers.  As a joint employer, the two companies will be equally liable for alleged violations of the NLRA, and their joint workforce may unionize into one bargaining unit.  For these reasons, it is important for employers to know these rules and recognize whether or not they are vulnerable to a joint employment liability with another company.  The NLRB’s new rule will take effect on February 26, 2024 and the new standard will be applied to cases filed after the rule becomes effective. 

The current NRLB rule for joint employment, promulgated in April 2020, is considered by many to be more favorable to employers because it requires the NRLB to differentiate between direct and indirect control over a worker by an employer, and it requires a showing of “substantial direct and immediate control” over the essential terms and conditions of employment of an employee before two distinct businesses will be considered a joint employer of that employee. 

Conversely, the new NLRB rule will not require any differentiation between direct and indirect control nor will it require consideration of whether or not the employer exercised that control.  Instead, the new rule merely provides that entities will retain joint employer status if they have authority to control essential terms and conditions of employment, even if the employer never actually exercises that control and their authority is indirect. These are the essential terms and conditions of employment that will be considered in the joint employment analysis:

  1. Wages, benefits and other compensation – does one or more entity control this in relation to the employee who might be jointly employed?
  2. Hours of work and scheduling – who controls the hours of work and scheduling (actually or indirectly)?
  3. The assignment of duties to be performed – same; which entities have actual or indirect control?
  4. The supervision of the performance of duties;
  5. Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  6. The tenure of employment, including hiring and discharge; and
  7. Working conditions related to the safety and health of employees.

The new joint employment standard will be met when the employer has authority to control even just one of the above terms or conditions.  At this time it appears to be unclear how much indirect control is going to be deemed sufficient to find joint employer status.  The Board has responded to this by indicating that they will engage in a fact specific analysis on a case-by-case basis to determine whether two or more companies meet the standard.

Companies that share or coordinate control of a single worker in any capacity are vulnerable, under this new standard, to being a joint employer with the second entity or individual (in cases of domestic employment, for example, or cases of CDPAP fiscal intermediaries).  The higher the level of control, actual or indirect, the higher the likelihood that – in cases of employment disputes coming under the NLRA – both entities will be deemed responsible for the employment law violation.

Employers should evaluate their affiliations, subsidiary relationships, workforce sharing, staffing, or other arrangements where a single worker is being affected, coordinated, controlled, scheduled, or affected in terms and conditions of employment with another entity or individual.  Such a self-audit will help identify the level of exposure for the employer and provide an opportunity for the employer to engage in risk mitigation efforts. 

The New York Clean Slate Act- What Does it Mean for Employers?

On November 16, 2023, Governor Hochul signed into law the New York Clean Slate Act, which, among other things, will impact how employers conduct background checks. In an effort to promote second chance hiring, the Clean Slate Act will require state and local authorities to automatically seal from public access certain criminal records of individuals who have satisfied their sentence and remain a law-abiding citizen for a certain period of time. Specifically, an individual will be given a “clean slate” under the following scenarios:

  • For a misdemeanor conviction, the record will be sealed once 3 years have passed since the individual’s release from incarceration, or the imposition of sentence if there was no sentence of incarceration.
  • For a felony conviction, the record will be sealed once 8 years have passed from the date the individual was last released from incarceration, provided (i) the individual does not have a criminal charge pending and (ii) the individual is not currently under the supervision of any probation or parole department.

The Act excludes convictions for sex crimes, murder, and other serious felonies, and applies only to criminal records of convictions under New York State’s penal law —meaning state and local authorities will not be required to seal criminal records of convictions under federal law or any other state’s criminal law.
Under the Act, which will go into effect November 16, 2024, employers will generally be prohibited from inquiring about sealed records or using sealed conviction records when making employment decisions. Notably, there are several exceptions under the Clean Slate Act, including entities that are required or authorized under state or federal law to conduct a fingerprint-based background check where a job applicant would be working with children, the elderly, or vulnerable adults. This includes home care and human services employers such as home care agencies and managed long-term care plans – which have a regulatory obligation to conduct a Criminal History Record Check on certain job applicants and employees – to inquire about and use sealed criminal records to make employment decisions.
Employers should review their employment practices and personnel policies relating to the use of criminal background checks and, if necessary, work with legal counsel to modify and implement those policies to ensure compliance with this Act.