Category: Employment Law

April 17, 2018

State Budget Expands New York Sexual Harassment Laws

On April 12, 2018, New York Governor Andrew Cuomo signed State Budget legislation that includes several provisions aimed at workplace sexual harassment. Some of the items included will require additional clarification through agency guidance and regulations. But here’s an initial overview of how New York sexual harassment laws will change.

Some new aspects of New York sexual harassment law took effect immediately. Others will become effective later. Here they are in the order that they take effect.

Protection of Non-Employees

Before April 12, 2018, the New York Human Rights Law only protected employees from sexual harassment. Effective immediately, it is also unlawful for employers to permit sexual harassment of non-employees in their workplaces.

In addition to employees, the law now protects:

Contractors
Subcontractors
Vendors
Consultants
Other persons providing services under a contract in the workplace
Employees of the above

An employer may be liable for sexual harassment against these individuals if it knew or should have known that the individual was subjected to sexual harassment in its workplace and failed to take “immediate and appropriate corrective action.”

The law does add that: “In reviewing such cases involving non-employees, the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of the harasser shall be considered.”

Public Officers

Effectively immediately, employees and officers of public entities (including the State, its agencies, local governments, and school districts) who are found personally liable for intentional wrongdoing related to sexual harassment must now reimburse their employer if it pays the judgment to a victim.

If the employee does not repay their public employer within 90 days, the employer may withhold compensation from the employee’s pay. If the person is no longer employed by the public entity, the employer may pursue collection through the courts.

Mandatory Arbitration Clauses

Beginning July 11, 2018, New York law will prohibit “any clause or provision in any contract which requires as a condition of the enforcement of the contract or obtaining remedies under the contract that the parties submit to mandatory arbitration to resolve any allegation or claim of an unlawful discriminatory practice of sexual harassment.”

This law defines a “mandatory arbitration clause” as “a term or provision contained in a written contract which requires the parties to such contract to submit any matter thereafter arising under such contract to arbitration prior to the commencement of any legal action to enforce the provisions of such contract and which also further provides language to the effect that the facts found or determination made by the arbitrator or panel of arbitrators in its application to a party alleging an unlawful discriminatory practice based on sexual harassment shall be final and not subject to independent court review.”

The law contains a telling exception. This prohibition applies “except where inconsistent with federal law”. That language is probably unnecessary, as the State law could not trump federal law anyway. But, it shows the Legislature’s recognition that federal law, including the Federal Arbitration Act, broadly favors arbitration. Thus, it remains to be seen whether this state restriction will be enforceable.

The law also allows that mandatory arbitration clauses contained in collective bargaining agreements are not prohibited.

Nondisclosure Agreements

Also as of July 11, 2018, employers may no longer include a provision in any settlement document resolving any claim involving sexual harassment that “would prevent the disclosure of the underlying facts and circumstances to the claim.”

The law provides an exception where “the condition of confidentiality is the plaintiff’s preference.” In that case, the plaintiff must have 21 days to consider the nondisclosure terms. Then, after 21 days, the parties can agree to the provision in a written agreement signed by all parties. But the plaintiff still must have at least 7 days to revoke the agreement after signing it.

New York Sexual Harassment Prevention

For the first time, New York will require all employers to maintain sexual harassment prevention policies and provide training for employees. These requirements take effect October 9, 2018.

Model Policy

A new provision of the New York State Labor Law requires the Department of Labor (DOL) to consult with the Division of Human Rights and publish a “model sexual harassment prevention guidance document and sexual harassment prevention policy.”

The model New York sexual harassment prevention policy must:

Prohibit sexual harassment and provide examples of prohibited conduct;
Include information about federal, state, and local sexual harassment laws;
Include a standard complaint form;
Identify a procedure for “timely and confidential investigation of complaints and ensure due process for all parties”;
Inform employees of their rights of redress and all available administrative and judicial forums for adjudicating sexual harassment complaints;
State that sexual harassment is a form of employee misconduct with sanctions for both individuals engaging in it and supervisors and managers who allow it to continue; and
Prohibit retaliation against individuals who complain of sexual harassment or testify or assist in any proceeding.

Once the model policy is available, all New York employers must adopt it or one that “equals or exceeds the minimum standards provided by such model”. Employers must provide their policy to all employees in writing.

Model Training Program

The DOL must also consult with the Division of Human Rights and produce a model sexual harassment training program.

The model New York sexual harassment prevention training program must be “interactive” and include:

An explanation of sexual harassment;
Examples of conduct that would constitute unlawful sexual harassment;
Information about federal and state sexual harassment laws and remedies;
Information about employees’ rights of redress and available forums; and
Additional responsibilities regarding supervisors.

Every New York employer will have to provide sexual harassment prevention training to all employees annually. Employers may use either the model training program or one that “equals or exceeds the minimum standards provided by such model training.”

State Contractors

Starting January 1, 2019, any entity seeking a contract with the State of New York through competitive bidding must certify that they have instituted a written policy on sexual harassment prevention. They must further certify that they provide annual sexual harassment training to all employees.

Stay Tuned for More on These New York Sexual Harassment Laws

Since most of these New York sexual harassment law changes don’t take effect immediately, employers have some time to prepare. For many, the biggest project will be complying with the new policy and training requirements. Even employers who already provide anti-harassment training to their employees will have to review the model policies and training programs to make sure they meet the minimum standards.

One thing you can do now is sign up for my email newsletter to make sure you get my updates on these important topics. This will include an announcement about a free webinar once the State issues the model New York sexual harassment materials.

April 11, 2018

Firing Employees on Medical Leave

Can you legally do this? Yes . . . maybe. Firing an employee on medical leave is a tricky proposition. But sometimes it is appropriate. Even then, it might not go over well.

Let’s review some of the legal issues and practical considerations that come up in this area.

Legal Protections

The full range of legal protections for employees on medical leave depends on where the employee works. But the Americans with Disabilities Act (ADA) and Family and Medical Leave Act (FMLA) apply throughout the United States. We’ll focus on those laws here, but you should also consider any similar state or local laws that may apply.

ADA

The ADA covers all employers with at least 15 employees. It prohibits discrimination against qualified individuals with a disability. It also requires employers to provide reasonable accommodations to employees with disabilities. Reasonable accommodations may include unpaid medical leave. (Read more: Is Time Off a Reasonable Accommodation?)

Just as refusing time off to an employee with a disability might violate the ADA, so might ending their employment while they’re out of work.

FMLA

Employers with 50 or more employees must allow eligible employees to take up to 12 weeks of unpaid leave per year for specific reasons. These reasons include the employee’s own serious health condition.

Most employees on FMLA leave have the right to return to work at the end of their leave. It is also unlawful to retaliate against an employee for taking FMLA leave. These protections may come into play if an employer seeks to end the employment of someone on FMLA leave.

What You Can’t Do

Employers can’t fire a qualified employee because of their disability . . . . Unless the disability prevents them from performing the essential functions of their job despite any reasonable accommodations.

There are many reasons why managers may get frustrated with employees who seem to never be at work. But there has to be more than just not wanting to deal with someone with a medical condition.

Employers covered by the FMLA also shouldn’t automatically fire an employee who doesn’t return at the end of 12 weeks of FMLA leave. An employee with a medical condition might still be eligible for additional time off as a reasonable accommodation under the ADA.

When Could You Fire an Employee on Medical Leave?

There aren’t many absolutes here. Each situation is different and may raise unique concerns, but here are some times when an employer might be able to separate the employment of someone on medical leave:

The business is closing, so everyone is losing their job.
You are eliminating the person’s position–especially if others not on leave will also lose their jobs without being replaced.
The employee has falsified the medical basis for leave.
You’ve discovered misconduct that warrants termination regardless of leave status.
The employee won’t be able to return for an extended period of time, such that continuing employment is not a reasonable accommodation or would impose an undue hardship.

The above list roughly moves from straightforward to more complicated analyses regarding employees on medical leave. In particular, the last situation involves the complex evaluation of when an accommodation is no longer reasonable–which seldom has an easy answer.

Putting It All Together

Employers should understand that employees are not automatically untouchable just because they’re on medical leave. But, it adds a factor to consider before making the termination decision. The situations posed above are only some of the more common that could occur. As each case raises its own nuances, employers should consult with experienced employment counsel when faced with these decisions.

April 6, 2018

PAID Program Hits Snag for New York Employers

The U.S. Department of Labor recently launched the nationwide Payroll Audit Independent Determination (PAID) program. The PAID Program encourages employers to conduct self-audits of their minimum wage and overtime payment practices. Employers who discover violations and self-report them may avoid penalties under the Fair Labor Standards Act (FLSA).

But . . . New York Attorney General Eric Schneiderman isn’t a fan of this federal program. In response to the launch of the U.S. DOL’s PAID Program, Schneiderman proclaimed:

“The Trump Labor Department’s ‘PAID Program’ is nothing more than a Get Out of Jail Free card for predatory employers.”

Is the Attorney General right? Let’s take a look at what the PAID Program offers, focusing on what all this means for employers in New York.

How the PAID Program Works

This “pilot” program is available to employers across the country. It has three basic components.

Self-Audit

To begin the process, an employer would conduct a self-audit of its compensation practices. If the employer finds compliance concerns it wants to resolve through the U.S. DOL, it must then (according to the DOL):

Specifically identify the potential violations;
Identify which employees were affected;
Identify the timeframes in which each employee was affected; and
Calculate the amount of back wages the employer believes are owed to each employee.

Self-Report

With this information ready, the employer would then contact the U.S. DOL’s Wage and Hour Division (WHD). The WHD will advise the employer what information must be submitted. This apparently will include:

The back wage calculations described above, along with supporting evidence and methodology;
A concise explanation of the scope of the potential violations for possible inclusion in a release of liability;
A certification that the employer reviewed all of the PAID Program’s information, terms and compliance assistance materials; and
A certification that the employer meets all eligibility criteria of the PAID Program.

Payment

The WHD will then follow up with the employer to determine resolution. This will likely include payment of back wages due to employees.

Eligibility Restrictions

Most employers subject to the FLSA are eligible to participate in the PAID Program.

However, an employer cannot participate if the:

WHD or a court has found within the last 5 years that the employer violated FLSA minimum wage or overtime requirements by engaging in the same compensation practices addressed by the self-audit;
Employer is a party to any litigation asserting that the compensation practices in the self-audit violate FLSA minimum wage or overtime requirements.
WHD is investigating the compensation practices at issue in the self-audit;
Employer is specifically aware of any recent complaints by its employees or their representatives asserting that the compensation practices in the self-audit violate FLSA minimum wage or overtime requirements; or
Employer has previously participated in the PAID Program to resolve potential FLSA minimum wage or overtime violations resulting from the compensation practices in the self-audit.

The WHD may otherwise decline to accept any employer into the PAID Program at its discretion.

New York’s Opposition

New York has its own minimum wage and overtime requirements for most private-sector employers. Like the FLSA, these laws include liquidated damages penalties where an employer failed to pay minimum wage or overtime properly. This means that employers found guilty of these wage violations may have to repay twice the amount originally owed. Employees can also recover their attorneys’ fees for these claims. Under New York law, employers may be found liable for unpaid wages going back as far as 6 years from the date of the claim. This is longer than the 2- (sometimes 3-) year statute of limitations under the FLSA.

New York’s Attorney General’s statement against the PAID Program demonstrates that he feels it is not enough that employees will receive the wages they should have been paid in the first place:

Employers have a responsibility under state and federal laws to pay back stolen wages, as well as damages intended to deter them from breaking the law again. The PAID Program allows employers to avoid any consequences for committing wage theft, while blocking lawsuits intended to vindicate employees’ rights.

I want to send a clear message to employers doing business in New York: my office will continue to prosecute labor violations to the fullest extent of the law, regardless of whether employers choose to participate in the PAID Program.

The most straightforward counterargument to Schneiderman’s position is that discouraging employers from self-auditing and self-reporting may mean that employees never recover the wages they should have earned. The state/federal DOLs and private claimants are highly unlikely to uncover every instance of failure to compensate employees properly for minimum wage or overtime.

What This Means in New York

First, it was not a given that the PAID Program would be a great deal for all employers anyway. There are various downsides to self-reporting minimum wage and overtime violations. Beyond having to pay back wages, this may negatively affect employee morale, public image, etc. But the program may benefit some employers depending on their specific circumstances.

Now, however, Attorney General Schneiderman’s announcement raises a major red flag for companies with employees in New York. By raising their hand to participate in the federal PAID Program, these employers would put a target on their backs for state enforcement. FLSA violations would most likely correspond to violations of New York minimum wage/overtime laws. And even if paying back wages arguably precluded further litigation for the same payments, New York’s longer statute of limitations may at least leave employers open to up to 4 more years of liability, including liquidated damages and attorneys’ fees.

Any employer contemplating participation in the PAID Program should definitely consult with an attorney with experience dealing with both the U.S. DOL and New York State DOLs before self-reporting any possible violations. Even if the attorney agrees there has been an underpayment, they may offer better options than the PAID Program. Or, if you go forward with the program, they can assist you in navigating the process appropriately.

If nothing else comes from the PAID Program, employers should use these developments as motivation to review their compensation practices. Misclassification of workers for minimum wage and overtime purposes is one of the most common and costly mistakes employers make.