Author: Scott Horton

Scott has been practicing Labor & Employment law in New York for almost 20 years. He has represented over 400 employers and authored 100s of articles and presentations and wrote the book New York Management Law: The Practical Guide to Employment Law for Business Owners and Managers. Nothing on this blog can be considered legal advice. If you want legal advice, you need to retain an attorney.

Auditing Your New York Worker Classifications Webinar Cover Slide

Auditing Your New York Worker Classifications (Webinar Recap)

On November 29, 2022, I presented a complimentary webinar entitled “Auditing Your New York Worker Classifications”. For those who couldn’t attend the live webinar, I’m happy to make it available for you to watch at your convenience.

In the webinar, I discuss:

  • Employees vs. Independent Contractors
  • Students & Interns
  • Minimum Wage/Overtime Exemptions
  • Pay Frequency
  • Notice Requirements

and much more!

A complex interplay between state and federal laws makes worker classification a particularly troublesome area for New York employers. With sometimes inconsistent technical requirements, well-intended employers can make mistakes that can lead to significant financial liability. This webinar offers an overview of the key employee status distinctions for purposes such as what compensation, if any, is required and when it must be paid.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “Auditing Your New York Worker Classifications”

If your organization misclassifies employees as independent contractors or as exempt instead of non-exempt, then it could result in a wage claim that produces monetary liability well beyond what the worker should have been entitled to.

This webinar is designed to help you prevent costly litigation by classifying employees correctly before issues arise. We address both federal and New York state laws with a focus on practically evaluating worker status in compliance with an array of legal standards.

For some, this ideally would be an in-depth reminder of day-to-day operational matters that have become seemingly routine. For others, it will point out new considerations in the way your company hires or compensates workers. Either way, you don’t want to miss this convenient opportunity to get your workplace on the right track.

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Electronic Monitoring and Algorithmic Management

Will the NLRB Rein in Electronic Monitoring and Algorithmic Management of Employees?

National Labor Relations Board General Counsel Jennifer A. Abruzzo has an announced her intention to seek new restrictions on electronic monitoring and algorithmic management of employees both remotely and in the workplace. In an October 31, 2022 General Counsel Memorandum, Abruzzo directed NLRB staff to apply the National Labor Relations Act to protect employees to the greatest extent possible in these areas. The scope of any new limitations on employers will depend on how the Labor Board decides future cases that the General Counsel’s Office chooses to prosecute.

Section 7 Rights

Section 7 of the National Labor Relations Act grants employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”

It is unlawful for an employer to interfere with, restrain, or coerce employees in the exercise of these rights.

Though Section 7 doesn’t directly address electronic surveillance or the use of artificial intelligence or algorithms in managing employees, Abruzzo emphasizes that “It is the Board’s responsibility ‘to adapt the Act to changing patterns of industrial life.'”

According to the GC Memorandum, it is already legally established that employers violate the NLRA if they:

  • Institute new monitoring technologies in response to activity protected by Section 7;
  • Utilize technologies already in place for the purpose of discovering that activity; or
  • Create the impression of monitoring its employees for that purpose.

A New Framework

The General Counsel now implores the Board to adopt a new framework for protecting employees from “intrusive or abusive forms of electronic monitoring.” Without detailing what particular practices might be unlawful, the Memorandum references current practices such as:

  • recording workers’ conversations and tracking their movements using wearable devices, security cameras, and radio-frequency identification badges;
  • “keep[ing] tabs” on drivers using GPS tracking devices and cameras; and
  • monitoring employees who are working on computers using keyloggers and software that takes screenshots, webcam photos, or audio recordings throughout the day.

This new framework would find that an employer presumptively commits an unfair labor practice where its electronic surveillance and management practices, viewed as a whole, would tend to interfere with or prevent a reasonable employee from engaging in activity protected by the Act. GC Abruzzo further urges the balancing of the effect of employer rules on “a reasonable employee who is in a position of economic vulnerability, taking into account the totality of the circumstances.”

Productivity vs. Employee Rights

The General Counsel’s Memorandum even casts doubt on employers’ use of software to encourage employees to work faster. She laments, “In the workplace, electronic surveillance and the breakneck pace of work set by automated systems may severely limit or completely prevent employees from engaging in protected conversations about unionization or terms and conditions of employment that are a necessary precursor to group action.”

In other words, it appears the General Counsel would go so far as to suggest that employees have a Section 7 right to have time to discuss unionization or their terms of employment while working. This view would likely shock many employers who have justifiably assumed they could expect employees commit themselves entirely to the job at hand during work time.

What This Means for Employers

Although the General Counsel can’t change the law herself, she has a significant role in determining what cases will be brought before the National Labor Relations Board, whose members can and do establish the law under the National Labor Relations Act. Moreover, employers may be found to violate the law based on practices that have never been challenged in the past, or even those that have previously been deemed lawful by the NLRB. Thus, the pronouncement of this new enforcement initiative should concern employers who engage in any form of electronic monitoring or algorithmic management of their employees.

Other than mentioning various technological capabilities, the General Counsel hasn’t expressly advised employers what practices she may challenge. All that is clear is that she seeks strong protections for employee privacy at the potential expense of employer productivity and profitability.

Employers that utilize computer algorithms, artificial intelligence, or electronic monitoring tools should review their use in light of this NLRB General Counsel Memorandum. Relevant considerations probably include whether the software or monitoring continues outside the office or working hours, whether any data are available to third parties, and the purposes the use of technology serves. But until the NLRB weighs in on more specific cases, it will be hard to predict the extent of the potential limitations and which factors will be most important in the Board’s analysis.

 

For more labor law insights and NLRB developments, follow Horton Law on LinkedIn and subscribe to our email newsletter.

Manual Workers

Heightened Emphasis on Weekly Pay for New York Manual Workers

The frequency with which New York employers must pay their employees depends on the nature of the employee’s work and how they are categorized under New York Labor Law. For relevant purposes, the law classifies private sector (non-governmental) employees under the categories of “Manual Worker,” “Railroad Worker,” “Commission Salesperson,” and “Clerical or Other Workers.” A ruling by a New York appellate court brought new scrutiny to what constitutes a “Manual Worker” and has substantially increased the prevalence of litigation over the subject.

Click here for more on the New York pay frequency requirements for non-manual workers.

Manual Workers

The New York Labor Law states employers must pay manual workers weekly, not later than 7 calendar days after the end of the week in which the employee earned the wages. There are some exceptions to this requirement. for (1) for-profit companies with at least 1,000 employees in the state authorized by the Commissioner of Labor and (2) non-profit organizations. Where the exceptions apply, employers may pay manual workers no less frequently than semi-monthly.

The law defines “manual worker” to mean a “mechanic, workingman, or laborer.” This definition has allowed room for interpretation, but the distinction between manual workers and other categories has not always been among employers’ most pressing concerns.

The New York Department of Labor considers an employee to be a manual worker if they spend at least 25% of their work time doing “physical labor,” which can include an array of physical tasks. In addition to traditional factory or construction work, activities involving heavy lifting, such as moving boxes or luggage, and even mopping or sweeping floors may qualify as physical labor. Even some employees who qualify for so-called “white collar” exemptions to overtime pay requirements might be deemed manual workers.

Vega v. CM & Associates Construction Management, LLC,

175 A.D.3d 1144

This 2019 decision by the First Department of the New York Appellate Division allowed manual workers to sue their employer and recover liquidated damages on late but fully paid wages.

The court stated, “The moment that an employer fails to pay wages in compliance with the [pay frequency laws], the employer pays less than what is required.” Thus, manual workers paid less frequently can seek legal remedies available for underpayment of wages even though they have already been paid the wages owed. Following this opinion, employees are pursuing lawsuits to recover liquidated damages and their attorneys’ fees, amounts potentially larger than the wages initially earned. Previously, such claims typically only resulted in relatively small civil penalties for employers.

The State’s highest court, the Court of Appeals, has not yet weighed in on this ruling.

Classifying Workers

With the stakes now much higher under Vega, defining what constitutes physical labor is increasingly critical for employers.

Many notable retail and hospitality companies are dealing with class action litigation over this subject. These cases may reshape how manual labor is defined within these and other industries. For example, a recent employee complaint cited sizing individuals for suits as an example of physical labor.

Review Your Pay Frequency

Now facing potentially steep damages awards, it is crucial for employers to carefully consider the classification of their employees for pay frequency purposes. Ambiguity in defining what constitutes manual/physical labor allows broad interpretation. Coupled with an onslaught of litigation, employers must proactively protect themselves by reviewing how often they pay all employees in New York.

 

For the most recent updates on New York employment law, follow Horton Law on LinkedIn.