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.

Captive Audience Meetings

New York Bans “Captive Audience” Meetings

On September 6, 2023, New York Governor Kathy Hochul signed amendments to state law that enhance employee protections. The amendments to Section 201-d of the New York Labor Law prohibit employers from disciplining employees for refusing to listen to the employer’s opinion concerning religious or political matters. Most notably, this new restriction prevents employers from holding so-called “captive audience” meetings in response to union organizing campaigns.

New York Labor Law Section 201-d

For decades, New York has had among the broadest protections for employees based on their off-duty conduct. Section 201-d of the state’s Labor Law has long prohibited employers from discriminating against applicants and employees for any of the following:

  1. Legal political activities outside of working hours, off of the employer’s premises and without use of the employer’s equipment or other property.
  2. Legal use of consumable products before the beginning or after the conclusion of the employee’s work hours, and off of the employer’s premises and without use of the employer’s equipment or other property.
  3. Legal recreational activities outside work hours off of the employer’s premises and without use of the employer’s equipment or other property.
  4. Membership in a union or any exercise of rights under the federal Labor Management Relations Act or New York’s Taylor Law.

The law was amended in 2021 to grant employees the right to use marijuana outside of work.

Read here for more on the traditional 201-d protections. 

“Captive Audience” Meetings

For the past 75 years, the National Labor Relations Board has interpreted the National Labor Relations Act to permit employers to hold mandatory meetings during employees’ work time to convey the company’s views on unions and labor organizing. Such meetings have been most commonly used in response to an imminent threat of unionization, such as when a union has filed an election petition with the NLRB.

Because the employees are at work and being paid, the NLRB has reasoned that their employers have the right to determine what the employees will be doing, even if that means attending a meeting. Of course, there have always been limits on what the employer can say, especially while an election is pending. For example, employers could not threaten reprisal based on an employee’s support of the union or offer incentives to employees who vote no to representation. Still, labor unions have long derided this practice as unduly coercive. They argue that because the employees are a “captive audience,” they have no choice but to listen to what management says and may believe they must go along with the company’s view.

Despite the longstanding NLRB precedent, the agency’s current General Counsel has indicated an interest in reconsidering an employer’s prerogative to hold such meetings. Given their decidedly pro-labor sentiments, it is entirely plausible that the current NLRB majority will eventually reverse the Board’s landmark 1948 ruling in Babcock v. Wilcox.

Section 201-d Amendments

Following past attempts by Oregon and Wisconsin, the New York Legislature has clearly set out to block captive audience meetings as a matter of state law. In other words, they’re trying to do what the NLRB might, but hasn’t yet accomplished. (Connecticut, Maine, and Minnesota have now also enacted similar legislation.)

In case there was any uncertainty about their intentions, the sponsors of the amendments included the following in their memorandum introducing the bill:

“Over the past 40 years, as labor union membership has declined and worker protections have been stripped, employers have been emboldened to share their political and personal beliefs with employees. . . . Not only are employers fabricating support for partisan politicians of their liking, they are also pushing their opinions on legislative issues, unionism, and religious topics on their workers.

It is interesting that the Legislature has squeezed the ban on captive audience meetings into a law designed to protect off-duty conduct. The connection is perhaps logical, but seemingly tenuous. In theory, the amendments purport to safeguard employees’ political and religious speech and beliefs, which one assumes would typically be exercised outside of work. However, the direct prohibition here is not related to what employees choose to do, but on how employers can communicate with their employees–even during work time.

Political Matters

Section 201-d already used the term “political activities” to mean “(i) running for public office, (ii) campaigning for a candidate for public office, or (iii) participating in fund-raising activities for the benefit of a candidate, political party or political advocacy group.” Generally, employers could not punish employees for engaging in those activities on their own time.

Now the law also separately defines “political matters.” This new term means “matters relating to elections for political office, political parties, legislation, regulation and the decision to join or support any political party or political, civic, community, fraternal or labor organization.”

At first glance, that addition would seem to expand the scope of political activity that employees are entitled to engage in. Ironically, however, employees aren’t getting any new rights to join political parties or civic organizations, as discussed below. If they have such rights, they’re afforded by the pre-existing aspects of Section 201-d.

Religious Matters

The amendments also add the term “religious matters” to Section 201-d. It is defined  to mean “matters relating to religious affiliation and practice and the decision to join or support any religious organization or association.”

Both federal and state employment discrimination laws already provide extensive protections for employees based on their religious beliefs. Section 201-d, as amended, doesn’t directly affect those rights. Instead, it (arguably) adds restrictions on what employers can say to employees about religion.

Newly Protected “Category”

The new references to “political matters” and “religious matters” are only used in discussing the types of meetings and communications that employers can no longer require employees to be party to.

In addition to the previous protections for off-duty conduct, Section 201-d now prohibits employers from “discharg[ing] from employment or otherwise discriminat[ing] against an individual in compensation, promotion, or terms, conditions or privileges of employment because of an individual’s refusal to:

  • attend an employer-sponsored meeting with the employer or its agent, representative or designee, the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters; or
  • listen to speech or view communications, the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters.

Exceptions

As with the original Section 201-d employer prohibitions, the amendments include some specific exceptions. Consequently, the law still does NOT prohibit:

  • an employer or its agent, representative or designee from communicating to its employees any information that the employer is required by law to communicate, but only to the extent of such legal requirement;
  • an employer or its agent, representative or designee from communicating to its employees any information that is necessary for such employees to perform their job duties;
  • an institution of higher education, or any agent, representative or designee of such institution, from meeting with or participating in any communications with its employees that are part of coursework, any symposia or an academic program at such institution;
  • casual conversations between employees or between an employee and an agent, representative or designee of an employer, provided participation in such conversations is not required; or
  • a requirement limited to the employer’s managerial and supervisory employees.

Religious Institutions

There is also a new exception for religious institutions in certain circumstances. The exception references and invokes Title VII’s exemption “with respect to speech on religious matters to employees who perform work connected with the activities undertaken by” a covered religious entity.

Posting Requirement

For the first time, the Legislature has added a notice posting requirement related to Section 201-d. Employers must now “post a sign in every workplace at the location or locations where notices to employees are normally posted, to inform employees of their rights” under this provision of the Labor Law. The notice obligation is not limited to the new captive audience meeting ban. It also includes the statute’s off-duty conduct protections.

Without further guidance from the State on what the posting must include, employers may consider posting the entire text of Labor Law Section 201-d to ensure compliance. You can download a copy here.

Implications for Employers

The amendments took effect immediately. Accordingly, employers should at least consider posting Section 201-d promptly. Notably, under another recent change to State law, the posting must also be made available to all employees electronically.

If your company was otherwise considering holding any meetings to discuss what may now be deemed “political” or “religious” matters, make sure you understand these amendments before proceeding. Legal challenges are expected, as the National Labor Relations Act may be deemed to preempt the New York law, at least with respect to the captive audience meetings related to unionization. However, employers who take the risk of relying on that argument may find themselves in protracted litigation and on the other side of a currently pro-labor National Labor Relations Board.

Note that the law does not say employers cannot discuss political or religious matters. However, employees must be free to choose whether or not to attend or listen to meetings, conversations, or other means of communication in which such subjects are discussed. Unfortunately, employers who initiate such conversations and subsequently have reason to discipline an employee who happened not to participate could face a claim of discrimination/retaliation based on their declining to do so.

 

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FLSA Exemption Threshold

DOL Proposes Increased FLSA Exemption Threshold

On August 30, 2023, the Wage and Hour Division of the U.S. Department of Labor announced its intention to propose significant increases in the compensation required for several common minimum wage and overtime exemptions. If adopted following public review and comment, the FLSA exemption threshold for the administrative, executive, and professional exemptions would increase by more than 50% over the current salary requirement. The proposal also seeks an automatic adjustment every three years. In addition, the pay required to qualify for the FLSA’s “highly compensated employee” exemption would also increase substantially.

FLSA Minimum Wage and Overtime Requirements

The Fair Labor Standards Act applies to most employers across the United States. It generally requires that employees receive a minimum wage of at least $7.25 per hour and then receive overtime at time-and-a-half the employee’s regular rate for hours worked beyond 40 in a week. However, there are various exceptions and exemptions from those requirements.

Note that many states and some localities have additional minimum wage and overtime requirements. Employers are often subject to and must comply with both the FLSA and the applicable state/local standards.

“White-Collar” Exemptions

The FLSA permits a series of so-called “white-collar” exemptions that employers commonly rely on in structuring compensation for certain, typically non-manual, workers. The most generally applicable of these are known as the administrative, executive, and professional exemptions.

Under the FLSA, each of these exemptions has a salary basis requirement. To qualify for the exemption, an employee must be paid a salary that usually doesn’t vary based on how much the employee works in a given week.

Currently, the minimum salary for these exemptions is $684 per week ($35,568 annualized).

Proposed FLSA Exemption Threshold

The U.S. DOL has the authority to issue regulations interpreting the FLSA, including its exemptions. The salary requirement has historically been implemented through such administrative rulemaking.

The DOL has now proposed to base the salary requirement on the 35th percentile of weekly earnings of full-time salaried workers in this lowest-wage U.S. Census Region. The South is traditionally and currently the lowest-wage region.

Based on this method, the new FLSA exemption threshold would be $1,059 per week ($55,068 annualized). However, the DOL’s proposal indicates in a footnote that the actual threshold upon adoption of a final rule could be higher. Since some time will pass before the rule is finalized, the 35th percentile earnings in the South may increase. The DOL notes that given its current projection for future quarterly earnings data, the new weekly salary threshold could be up to approximately $100 higher than $1,059 upon adoption.

The proposal would also impose automatic updates to the salary requirement. The DOL would change the amount every three years to maintain the 35th percentile standard.

Highly Compensated Employee Threshold

The administrative, executive, and professional exemptions are not based solely on compensation. Employees’ duties must also meet particular standards. However, the FLSA recognizes an alternative potential exemption for some employees who do not fully meet the duty requirements of the other white-collar exemptions.

Currently, the “highly compensated employee” exemption could apply to an employee who makes a salary of at least $684 per week and overall qualifying annual compensation of at least $107,432.

As proposed, the new DOL rule would tie the overall annual compensation requirement to the 85th percentile of full-time salaried workers nationally. Based on current earnings statistics, that would initially be $143,988. Like the standard exemption salary threshold, this bar would also be subject to automatic updates every three years.

Rulemaking Process

Once the DOL’s proposal is formally published in the federal register, the public will be afforded at least 60 days to submit comments. After the comment period ends, the DOL can move forward with a final rule change. The new rule could be exactly what is currently proposed or include some revisions.

Given the necessary rulemaking timeline, it is unlikely the FLSA exemption threshold would change before 2024.

Potential Litigation

The last time the DOL tried to include automatic indexing of the FLSA exemption threshold, it was challenged in the courts and ultimately never took effect. Similar lawsuits will presumably be filed in response to the DOL’s current attempt to increase the salary requirement. The outcome of those cases cannot be as reliably predicted.

Impact of Proposals

The practical impact of the potential increases will vary depending on an employer’s circumstances. Some states already have higher exemption thresholds than what the DOL seeks here. Some companies already pay most exempt employees beyond this level. Nonetheless, many would need to either re-classify employees as non-exempt or increase their salaries, potentially significantly.

Even where the initial jump to $1,059 (or more) per week is not particularly problematic, the prospect of automatic indexing could be more so. This approach would almost certainly result in meaningful increases every three years. Notwithstanding other economic factors, some employers would raise salaries to meet the new higher thresholds, putting upward pressure on average weekly wages nationwide (and perhaps especially in the South, where fewer states currently impose thresholds beyond the FLSA level). As a result, it almost necessarily will become more expensive over time to maintain these exemptions.

 

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Reviewing Your New York Anti-Harassment Policies

Reviewing Your New York Anti-Harassment Policies (Webinar Recap)

On August 24, 2023, I presented a complimentary webinar entitled “Reviewing Your New York Anti-Harassment Policies”. 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:

  • Sexual Harassment Policies
  • Other Protected Characteristics
  • Best Practices
  • Legal Impact
  • Training

and much more!

All New York employers must have a written sexual harassment prevention policy. The State has recently updated its model policy, and employers should be aware of the suggested changes. You should also consider how to address other forms of harassment in your employee handbook or other policy materials. Given relatively low bars for asserting unlawful harassment in New York, it is critical that employers continue to monitor their efforts in this area.

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

Why You Should Watch “Reviewing Your New York Anti-Harassment Policies”

New York State has updated its model sexual harassment prevention policy. While employers are not required to adopt the model policy, you must meet minimum guidelines established by the State. Unfortunately, it’s not so clear exactly how to do that. In this webinar, we discuss some strategies and best practices for compliance depending on your circumstances.

Of course, employees have legal rights to be free from harassment based on other characteristics as well. What do your current policies say about racial harassment, age-based harassment, and harassment against individuals with disabilities? Make sure your policies make sense together and are up-to-date in light of periodic changes in applicable employment discrimination laws.

The webinar also includes reminders about mandatory sexual harassment training and ideas on preventing harassment, which is the only way to genuinely reduce the risk of legal liability.

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