Category: New York

March 19, 2020

New York State Creates COVID-19 Quarantine Leave for Employees

On March 18, 2020, New York enacted a new law providing job-protected leave and compensation to any employee in New York State who is under a precautionary or mandatory order of quarantine or isolation due to COVID-19. The law provides varying benefits based on several characteristics of the employer.

In addition to the statutory terms discussed below, the law requires various State agencies to issue interpretative regulations by June 1, 2020. The law, however, took effect immediately.

Private (Non-Government) Employers

“Small” Employers

Private employers with less than 10 employees as of January 1, 2020, and income less than $1 million in the previous tax year must provide unpaid sick leave to any employee who is placed under a precautionary or mandatory order of quarantine or isolation due to COVID-19 through the duration of the order. Employers must continue to provide such employees and any other benefit that the employee has a right to under any law.

These employees are entitled to receive compensation for the duration of the leave through the New York paid family leave and disability benefits programs.

“Medium” Employers

A middle category of benefits applies to employees of employers with:

less than 10 employees who had a net income greater than $1 million in the previous tax year; and
between 11 and 99 employees.

These employers must provide at least 5 days of paid leave to employees under COVID-19 quarantine or isolation. They must also allow unpaid leave for the remainder of the quarantine or isolation period.

After the 5 days of paid leave, such employees will be eligible for paid family leave and disability benefits.

“Large” Employers

Employers with one hundred or more employees must provide at least 14 days of paid sick leave to any employee under COVID-19 quarantine or isolation.

The statute does not state that these employees can receive additional unpaid leave or paid family leave and disability benefits. That might be based on the assumption that quarantine usually wouldn’t last beyond 14 days. Or perhaps, the omission could be inadvertent and may be corrected through an amendment upon discovery by the State.

Public Employers

Public employers (i.e., all state and local government entities) must provide any employee or officer under a mandatory or precautionary order of quarantine or isolation with 14 days of paid sick leave.

The statute clarifies that such public employees must receive compensation at their “regular rate of pay” for “regular work hours” they miss due to the quarantine or isolation order. There is no specific clarification of the compensation rate for private-sector employees.

Additional Conditions for Quarantine Leave

Qualifying Quarantine/Isolation Order

To qualify for leave the employee’s order of precautionary or mandatory quarantine or isolation for COVID-19 must be issued by the State of New York, the NYS Department of Health, a local board of health, or any government entity duly authorized to issue such an order.

However, the law clarifies that this law does not apply to an employee who meets both of the following conditions:

has been deemed asymptomatic or has not yet been diagnosed with any medical condition; and
is physically able to work while under a mandatory or precautionary order of quarantine or isolation, whether through remote access or other similar means.

Job Restoration

Employers must restore any employee who returns to work from COVID-19 quarantine leave to the position the employee held before taking the leave. The employee must receive the same pay and other terms and conditions of employment.

The law prohibits discrimination and retaliation against employees for taking this leave.

Conversely, the law does not bar employers from taking personnel actions unrelated to “any request to use, or utilization of, any leave provided by this act.” Presumably, this acknowledges that employers may discipline or even layoff or discharge employees due to performance, misconduct, or economic factors.

Impact on Other Sick Leave

Any employee who qualifies for leave under this law may take it without losing any other accrued sick leave.

Disqualifying Travel

Any employee who (other than for work or at the direction of their employer) traveled to a country subject to a Level 2 or Level 3 travel health notice from the Center for Disease Control and Prevention, despite receiving such notice, is not eligible to receive paid sick leave during the period of quarantine or isolation. Such employees still may use any other accrued paid sick leave and remain entitled to unpaid leave for the duration of the quarantine or isolation.

Employee Eligibility for Insurance Benefits

New York State Disability Benefits

The new law amends, for limited purposes, the definition of “disability” under the New York State Disability Benefits Law to mean:

any inability of an employee to perform the regular duties of his or her employment or the duties of any other employment which his or her employer may offer him or her as a result of a mandatory or precautionary order of quarantine or isolation issued by the state, the department of health, a local board of health, or any government entity duly authorized to issue such order due to COVID-19 and when the employee has exhausted all paid sick leave provided by the employee’s employer” under the COVID-19 quarantine leave law.

For employees with such a disability, the law waives the standard 5-day waiting period before receiving disability benefits. This waiver allows qualifying employees to begin receiving disability benefits starting the first full workday that they miss due to COVID-19 quarantine or isolation.

The law seems to increase substantially the dollar amount of disability benefits potentially available for employees missing work for this purpose. Usually capped at $170 per week, disability benefits for qualifying employees on COVID-19 quarantine leave will be equal to the difference between the maximum family leave benefit and the employee’s average weekly wage, up to a maximum of $2,043.92.

New York State Paid Family Leave

The COVID-19 quarantine leave law also amends, for limited purposes, the definition of “family leave” under the New York State Paid Family Leave Benefits Law to mean:

(a) any leave taken by an employee from work when an employee is subject to a mandatory or precautionary order of quarantine or isolation issued by the state, the department of health, a local board of health, or any government entity duly authorized to issue such order due to COVID-19; or

(b) to provide care for a minor dependent child of the employee who is subject to a mandatory or precautionary order of quarantine or isolation issued by the state, the department of health, a local board of health, or any government entity duly authorized to issue such order due to COVID-19.

Notably, part (a) of this revised definition provides for “family leave” in the case of the employee’s own quarantine or isolation due to COVID-19. This addition is a significant departure from the existing NYS paid family leave provisions, which only apply to particular circumstances unrelated to the employee’s own medical condition.

Simultaneous Benefits

The above all now means that an employee under quarantine or isolation for COVID-19 can receive both disability benefits and paid family leave benefits at the same time.

However, the law caps these benefits for employees under quarantine or isolation at no more than $840.70 in paid family leave benefits and $2,043.92 in disability benefits. An employee’s average weekly wage would have to be at least $2,884.62, or $150,000 annually, to reach the cap.

Ironically, it seems that perhaps employees making less than about $1,400 per week would end up with less than full wage replacement. That is because the law determines the amount of disability benefits based on the “maximum weekly family leave benefit,” which arguably is the maximum for any employee (currently $840.70), rather than the lower amount that the employee in question would receive in paid family leave benefits. It’s uncertain whether the State intended this discrepancy. It is possible that they might seek to “clarify” the calculation by an amendment or further regulatory action.

Interaction with Other Laws

This New York State measure addresses possible overlap with federal law. Indeed, within hours of Governor Cuomo signing this act, President Trump signed a bill from Congress that also provides for up to two weeks of paid sick leave related to COVID-19. The federal law would apply to some of the same employees and employers as the State law, does but there are differences in coverage.

The New York law indicates that its benefits (whether through paid sick leave, paid family leave, or disability benefits) are not available to the extent the employee otherwise receives compensation under the federal law. However, where the State law provides more generous benefits than the federal law, the employee is eligible to receive the difference in benefits to supplement what the federal law requires.

Our full summary of paid sick leave and paid FMLA requirements under the Families First Coronavirus Response Act is available here.

Penalties

The New York law does not contain any express penalties for non-compliance. However, existing penalty provisions under the New York Disability Benefits Law and New York Paid Family Leave Benefits Law would likely apply to relevant portions. Moreover, failure to pay the new sick leave benefits might constitute a failure to pay wages subject to stiff penalties under the New York Labor Law.

What Employers Must Do

Asking employers to comply with this new law, especially when coupled with new federal requirements and during an unprecedented national health crisis, is no small request by the State. The provisions are quite complex, including peculiar implications under existing insurance policies. But the law is now in effect and should be taken seriously. Ideally, this would include updating applicable policies, such as your paid family leave policy, which all New York employers must have in writing. We strongly encourage you to consult with experienced employment attorneys in attempting to apply this new array of leave benefits to your workplace.

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February 15, 2020

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.

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.

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February 4, 2020

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 Date	Minimum Wage	Low 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 Date	Minimum Wage	Low 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 Date	Minimum Wage	Low 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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