Category: Employment Law

Employment Agreement Webinar

What’s in an Employment Agreement? (Webinar Recap)

On February 27, 2020, Julie Bastian and I presented a complimentary webinar called “What’s in an Employment Agreement?”. For those who couldn’t attend the live webinar, we’re happy to make it available for you to watch at your convenience.

In the webinar, we discuss:

  • Position and Duties
  • Compensation and Benefits
  • Term/Termination
  • Confidentiality and Non-competes
  • Intellectual Property Rights

There is no magic prescription for the perfect employment agreement. Each organization has different structures and operational needs. Your company might not use need employment agreements, or at least not for every employee.

This webinar discusses various common components of employment agreements to help you decide how to use them, if at all, in your business.

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

Why You Should Watch “What’s in an Employment Agreement?”

It’s seldom an optimal strategy to take an employment contract off the shelf somewhere and use it across your organization. Each provision has potential practical and legal impacts. So you have to carefully think through what your business needs and adjust your agreements accordingly.

There are some basics found in most employment agreements. But even before you get there, you have to decide whether every employee should sign a written contract. In some industries, they’re very common. In others, not so much.

Employment agreements can range from one page to dozens. This webinar will help you match your needs and objectives to what you put on paper and ask employees to sign.

Do you even know what your employees are agreeing to right now? Use this webinar as a checklist to better understand what you can or can’t and should or shouldn’t expect employees to agree to in your situation.

Don’t Miss Our Future Webinars!

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New York Employment Legislation

New York Employment Legislation Watch – Early 2020

In 2019, the New York State Legislature made substantial changes to workplace laws. It seems likely that this trend will continue. Let’s take a first look at some proposed employment legislation still pending for possible adoption in 2020.

Note that at the time of writing, none of the bills addressed here have become law. We will continue to track this and other New York employment legislation for updates.

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Proposed Bills

These bills have been introduced in the 2020 Legislative Session. Some have been introduced in the past, but did not become law. That is not a clear indication of whether the bill or similar initiative won’t be successful this year. 2019 brought about many changes in New York employment law that would not have become law in prior sessions.

S04883 – “Paid Sick Leave Act”

This bill would require all employers in New York State to provide paid sick leave for their employees.

Sick leave would accrue at the rate of one hour of leave for every 20 hours worked up to a maximum of 80 hours. For small businesses with less than 10 employees, however, the maximum accrual would be limited to 40 hours.

The bill provides that employee must be able to use the paid sick leave:

  • when the employee is ill or injured;
  • for the purpose of the employee’s receiving medical care, treatment, or diagnosis; and
  • to aid or care for certain family members when they are ill or injured, receiving medical care, treatment, or diagnosis.

Covered family members include children, parents, legal guardians/wards; siblings; grandparents; grandchildren; and spouses or another “designated person” if the employee has no spouse.

Employers could choose to provide more paid sick leave than the law would require.

In many ways, this bill is unfathomably broad. But it would not be shocking if New York enacted a more restrained paid sick leave law this year.

A07466 / S02261 – Abusive Work Environment

This bill is an attempt at anti-bullying legislation. It provides that “no employee shall be subjected to an abusive work environment.” Employers would be liable when they or their employees create such conditions in the workplace.

With a broad definition of “abusive work environment,” this bill aims to create protections on top of workplace harassment laws. Essentially, this law would eliminate the requirement that the negative treatment be based on a legally protected personal characteristic. The following could qualify as abusive conduct regardless of the underlying basis:

  • repeated verbal abuse, such as the use of derogatory remarks, insults, and epithets;
  • verbal, nonverbal, or physical conduct of a threatening, intimidating, or humiliating nature; or
  • sabotage or undermining of an employee’s work performance.

While none of these behaviors is pleasant or generally desirable, imposing employer liability on these bases would open floodgates of employment litigation. Still, it wouldn’t be a shocking development for New York in 2020.

The Sponsor’s Memo says, “This legislation will provide legal redress for employees who have been harmed, psychologically, physically, or economically. It will also provide legal incentives for employers to prevent and respond to mistreatment of employees at work.”

On the other hand, it would also provide legal incentives for employers to avoid operating in New York.

A02448 / S01132 – “Schedules That Work Act”

New York City already has a local “Fair Workweek Act” that regulates the scheduling of fast food and retail employees. New York State started down the path of imposing similarly-intended regulations over the past two years. But that effort stalled out of fear that it would have exceeded the Department of Labor’s regulatory authority. However, the State indicated at the time that it might continue the effort through legislation.

The proposed “Schedules That Work Act” would apply to employers with at least 50 employees in New York State. As currently drafted, it would only apply to the retail, food service, and cleaning industries.

This legislation would impose new restrictions on covered employers’ ability to schedule employees. It includes specific parameters regarding call-in pay, split shifts, and advance notice of work schedules.

The Sponsor’s Memo claims:

“This bill would promote more communication between employee and employer regarding expectations for work and require the employer to give more reasonable notice to the employee of changes in their work schedule. A more predictable schedule would result in a more focused employee who has been ensured their responsibilities outside of work have been taken care of. Additionally, giving hourly employees a voice at work would likely decrease worker turnover rates. In this way, this bill would benefit both the employee and the employer.”

Other similar bills are pending, such as A00315 / S03346.

A04714 / S05044 – Personnel Files

Currently, New York law does not require employers to provide employees access to review their personnel files. This bill would change that.

As proposed, this legislation would require employers to:

  • Give current employees and former, upon request, a free copy of their personnel file each year; and
  • Allow former employees (or their attorneys or union representatives) to review and copy the employee’s personnel file.

Several other states already have similar statutory provisions.

The Sponsor’s Memo filed with the bill asserts that:

“In the event of an unscrupulous employer or supervisor taking advantage of their position of power this legislation is very useful in giving the employee the opportunity to defend their name and their work ethic if need be.”

A03863 – Expanded Whistleblower Protection

New York’s Labor Law already provides whistleblower protections for employees who report violations of statutes and government regulations by their employers. This bill would amend the existing law to include reporting of “improper business activities.”

Under the bill, “improper business activities” would include violations of any “internal rule promulgated by the employer pursuant to any statute or ordinance” and “any judicial or administrative decision, ruling or order.”

The amended whistleblower protection would also more broadly apply when the employee “in good faith reasonably believes that an improper business activity has occurred or will occur, based on information that the employee in good faith reasonably believes to be true.”

This amendment would no longer require employees to bring the misconduct in question to the attention of their employer before reporting it to an outside source.

Notably, the bill would also create a new requirement that employers post a notice of these protections in the workplace. It also increases penalties for violations by employers and eliminates employers’ opportunity to recover attorneys fees for claims made without a reasonable basis.

The Sponsor’s Memo contends that:

“Currently, the whistle blower protections afforded under these statutes is [sic] overly narrow in scope, merely protecting employees who are reporting employer misconduct that threatens the general public health and safety. The corporate scandals that rocked the business community in the early part of this decade demonstrate the vital need for broad whistle blower protections. The narrow scope of these statutes deprives them of any true meaning or effect. As a result, this much needed legislation finally offers adequate protection to those brave employees who refuse to sacrifice their own integrity in the face of employer intimidation.”

A similar bill is pending as S03683.

Employer Concerns with Proposed New York Employment Legislation

As already suggested in some places above, New York employers have valid reasons to resist much of this legislation. It is unlikely that all of these bills will become law in their current form. However, any of these topics could produce new legal obligations as soon as 2020.

You should consider whether any of these measures would unduly burden your business. If so, it’s not too soon to start tracking this New York employment legislation and seeking to prevent or modify it.

Whether through one of these bills or other measures, employers should expect New York to continue to impose new employee protections this year. It is critical to be aware of any new laws and prepare for compliance as soon as possible.

To receive updates on New York employment legislation developments, sign up for our email newsletter and follow us on LinkedIn.

Tip Credit

New York Eliminates Tip Credit for Most Industries

On January 22, 2020, the New York Department of Labor issued a proposed rule toward eliminating the tip credit for employees in most industries. The rule change follows a report in which the Commissioner of Labor recommended this approach. Governor Cuomo endorsed the report’s findings on December 31, 2019. The new rule will modify the State’s Minimum Wage Order for Miscellaneous Industries and Occupations.

The proposed rule is subject to a 60-day public comment period. However, it appears quite likely the Department of Labor will finalize this rule before the initial June 30, 2020 partial implementation date.

Affected Employees

The New York Minimum Wage Order for Miscellaneous Industries and Occupations covers most industries. Limited exceptions include the hospitality industry (restaurants and hotels), building services, and farmworkers.

This rule change does not affect tipped restaurant or hotel workers. But it does generally encompass the following types of positions where employees commonly receive tips:

  • car wash attendants
  • nail salon workers
  • tow truck drivers
  • dog groomers
  • wedding planners
  • tour guides
  • tennis instructors
  • valet parking attendants
  • hairdressers
  • aesthetician
  • golf instructors
  • door persons

Current Tip Credit Allowance

Employers have historically been able to pay such employees below the standard New York minimum wage by relying on a tip credit allowance. To apply a portion of the employee’s tips or gratuities toward satisfying the hourly minimum wage requirement:

  • The employee’s occupation must be one in which tips have customarily and usually constituted a part of the employee’s remuneration;
  • The employer must be able to show substantial evidence that the employee has earned at least the amount claimed for the tip credit allowance; and
  • Any tip credit allowance must be recorded on a weekly as a separate item in the wage record.

Where currently allowed, the amount of the tip credit available to employers depends on the level of tips earned by a particular employee. In each case, there is a “low” and “high” tip credit allowance based on the employee’s weekly average of tips received.

New Tip Credit Rule

Under the new rule the tip credit allowance under the New York Miscellaneous Industries and Occupations Wage Order would be cut in half effective June 30, 2020, Then, as of December 31, 2020, it would be eliminated. Thus, by year end, employers will have to pay full minimum wage without the benefit of any tip credit.

Commissioner of Labor Investigation and Report

The New York Commissioner of Labor has the authority to declare that a policy must be eliminated as rapidly as practicable without substantially curtailing opportunities for employment or earning power. Governor Andrew Cuomo had directed the Commissioner to examine the overall impact of the minimum wage tip credits on employees and employers.  The Department of Labor held seven public hearings resulting in approximately 40 hours of testimony, and the Commissioner issued an 11-page “New York State Subminimum Wage Hearing Report and Recommendations.”

The Commissioner’s Report addresses the overall intent behind the project, what action was taken by the Commissioner and his team to investigate the overall impact of the tip credit allowance, the data collected during the investigation, and his recommendations for changes moving forward.

Report Findings

The Commissioner’s Report includes the following findings:

  • There are at least 70,000 workers in the state of New York that fall under the Miscellaneous Wage Order who likely receive tips.
  • 62% of these employees are female, 41% are non-white, and 27% are Hispanic or Latino.
  • Tipped workers are twice as likely to be in poverty, with a below-poverty status of 13%–more than two times that of the broader workforce–and are more likely to rely on public assistance.
  • Tipped workers outside of the hospitality industry are often confused about whether they are entitled to earn minimum wage, leading to wage theft.
  • The testimony cited lower tipping rates in miscellaneous industries due to tip pooling and a lack of broad public awareness of tipping in these types of businesses.

Report Conclusions

The Commissioner concluded that the existing tip credit language in the Miscellaneous Industry Minimum Wage Order:

  • allows employers outside of the hospitality industry to employ workers “at wages that are insufficient to provide adequate maintenance for themselves and their families”;
  • threatens the health and well-being of the people of this state; and
  • injures the overall economy.

Minimum Wage for Tipped Employees (Non-Hospitality)

The charts below show the 2020 minimum wage requirements for employees covered by the Miscellaneous Industries Minimum Wage Order.

New York City
Effective DateMinimum WageLow Tips ($2.25 to $3.64)High Tips ($3.65+)
12/31/2019$15.00$12.75$11.05
6/30/2020$15.00$13.85$13.15
12/31/2020$15.00$15.00$15.00

 

Long Island & Westchester County
Effective DateMinimum WageLow Tips ($1.95 to $3.19)High Tips ($3.20+)
12/31/2019$13.00$11.05$9.80
6/30/2020$13.00$12.00$11.40
12/31/2020$14.00$14.00$12.50

 

Remainder of New York State
Effective DateMinimum WageLow Tips ($1.75 to $2.89)High Tips ($2.90+)
12/31/2019$11.80$10.05$8.90
6/30/2020$11.80$10.90$10.35
12/31/2020$12.50$12.50$12.50

In some parts of the State, the minimum wage will increase again on December 31, 2021. On that date, the minimum wage for Long Island and Westchester will rise to $15.00 per hour. Additional increases for other parts of the state are also likely, but not yet scheduled.

Click here for more details on New York State’s minimum wage rates.

Potential Changes to the Hospitality Tip Credit

This rule change does not apply to individuals employed in the hospitality industry. However, it remains possible that restaurants and hotels will face similar changes in the future.

Several years ago, the Labor Commissioner convened a Hospitality Wage Board to investigate modifications to the required cash wage rates and the allowable credits for tips, meals and lodging for employees in the hospitality industry. In February 2015, based on the Wage Board’s recommendations, the Department of Labor modified tip amounts and criteria for all tipped workers in the hospitality industry. These include food service workers and other restaurant and hotel service employees.

The Hospitality Wage Board found that the tipped employee minimum wage adversely affects “especially low-paid employees, women, and minorities.” It recommended “a complete elimination” of the “subminimum wage” in favor of “a single minimum wage [that] would simplify a complicated system.” However, both restaurants/hotels and their employees have expressed opposition to the elimination of the tip credit for hospitality workers.

Recommendations for Employers in Non-Hospitality Industries

Employers (other than restaurants and hotels) currently taking advantage of the tip wage credit must evaluate their current practices and determine how they intend to comply with the planned changes. In some cases, it may not even be clear whether the hospitality or miscellaneous wage order technically applies. Given the complexity of these regulations, it is critical to carefully review and modify your operations and pay practices as necessary.

 

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