Category: Workforce Trends

October 31, 2024

Paid Pet Leave for NYC Employees?

On October 23, 2024, a new pet leave bill was introduced before the New York City Council. The bill proposes to amend NYC’s Earned Safe and Sick Time Act (ESSTA) to allow employees to use paid sick time for the care of pets. Below is a summary of the proposal and insights on what employers should consider as this legislation progresses.

Key Provisions of the Pet Leave Bill

The proposed law, introduced by Council Members Shaun Abreu and Tiffany Cabán, expands the existing NYC sick leave to include absences related to the care of “covered animals.” Here are the essential elements:

“Covered Animals” includes any animal primarily kept for companionship in compliance with local laws and service animals. This ensures a broad application, covering both household pets and certified service animals.
Types of Permitted Leave: Under the new law, employees could use sick leave for:
- Medical diagnosis, care, or treatment of an animal’s physical illness, injury, or health condition.
- Preventive medical care for the pet.
Existing Sick Leave Entitlement Remains Unchanged: The law does not increase the amount of sick leave available to employees. Instead, it adds pet care to the list of permitted uses for existing sick leave hours.
Effective Date: Should the bill pass, it will take effect 120 days post-enactment, giving employers some time to adjust policies accordingly.

Implications for Employers

Policy Adjustments: Employers may need to revise their sick leave policies to explicitly include pet care as a covered absence.

Employee Documentation and Requests: As with other types of sick leave, it may be necessary to establish guidelines for requesting pet leave to prevent misuse. Unfortunately, employers don’t currently have much latitude in questioning sick leave requests.

Potential Operational Impacts: New York City has a high rate of pet ownership. Thus, the potential increase in short-term absences is worth consideration, especially for roles that require continuous coverage.

Supporting Employee Well-being: This initiative reflects a growing focus on mental health and well-being in the workplace. For employees, being able to care for their pets without the fear of losing pay or facing disciplinary action could enhance morale and reduce anxiety, particularly for those who rely on their pets for companionship. Employers should look for ways to benefit from the law. Some employers already allow pet care leave voluntarily.

Potential Pet Leave Implications Beyond New York City

The proposed pet leave bill specifically amends New York City’s ESSTA. IT would not directly apply to employees outside the City. However, New York State also has a statewide paid sick leave law modeled after NYC’s ESSTA. So, this proposal could prompt consideration of similar measures at the state level. If the pet leave bill gains support and proves effective in NYC, it may set a precedent that encourages the New York State Legislature to consider a statewide extension.

Employers across the state (and country?) should monitor this proposal as its implementation in NYC might foreshadow future legislative developments. In particular, those with locations in both New York City and elsewhere should evaluate how this potential change aligns with their broader leave policies.

Next Steps for Employers

The pet leave bill is still under consideration. However, employers should proactively evaluate their current leave policies and consider how they might integrate this potential change. By staying informed and prepared, businesses can ensure they remain compliant while demonstrating that they support their employees’ diverse needs.

As this bill advances through the New York City Council, stay updated and consult legal professionals if you need further guidance. This proposed change could set a precedent for future legislation that might even expand to other aspects of employee pet ownership.

Stay tuned for updates on the passage of this law and potential best practices for implementation!

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August 29, 2024

NYS Model Freelancer Contract

New York State’s Freelance Isn’t Free Act took (FIFA) effect on August 28, 2024. As required by the Act, the New York State Department of Labor has developed a model freelancer contract. Although the model agreement meets the legal requirements, it has serious limitations. Accordingly, most hiring parties should consider modifying the model contract or drafting their own FIFA-compliant agreement.

Freelance Isn’t Free Act Overview

New York’s FIFA addresses non-employment relationships between a “hiring party” and a “freelance worker.” Under this law, only individuals and single-person organizations can qualify as a “freelance worker.”

When a hiring party engages a freelance worker, there must be a written contract between them.

By law, the contract must contain the following information:

Name and mailing address of both the hiring party and the freelance worker
Itemization of all services to be provided by the freelance worker
Value of the services to be provided
Rate and method of compensation
Date or mechanism of determining when payment will be made
Date by which a freelance worker must submit a list of services rendered to allow the hiring party to process timely payment

Hiring parties that don’t ensure there is a compliant contract in place risk various penalties. But the biggest risks aren’t just not having a written contract.

Purpose of the Freelance Isn’t Free Act

More than insisting on a written contract, FIFA is designed to give non-employees compensation protections similar to those of employees. Instead of typical breach of contract damages, FIFA allows freelancers to recover enhanced penalties as are available for unpaid wage claims. Consequently, hiring parties face significant liability risk when they don’t pay a freelancer in full and on time.

Click here for more on the FIFA requirements.

Components of the Model Freelancer Contract

The DOL’s model freelancer contract contains 25 numbered sections. These include identification of the parties, compensation terms, and various provisions referring to the freelance worker’s rights under FIFA. It appears the latter content goes beyond what the law actually requires.

Such additional provisions include those with the following headers:

Prohibition Against Waiver
Prohibition Against Retaliation and Discrimination
Violations

The template also includes the following provisions that may not be desirable (at least as written) in all contexts:

Intellectual Property Rights
Revisions
Termination
Indemnification
Insurance Required
Other Business Activity
Late Payment
Limitations on Liability
Confidential Information

The NYS DOL template “Freelance Worker Agreement” is available here.

Model Freelancer Contract Doesn’t Avoid Employment Relationship

By using the model freelancer contract as written, hiring parties would not only be telling freelancers how to pursue claims against them, but may also unwittingly jeopardize the independent contractor nature of the relationship.

The model contract states that “Nothing in this Agreement shall indicate the Freelance Worker is a partner, agent, or employee of the Hiring Party.” But it doesn’t specifically acknowledge that the freelancer is not an employee! Plus, the check-box, fill-in-the-blank format of other sections could result in terms that may support an employment classification.

Remember, a hiring party and worker can’t simply decide whether they have an employment relationship or not. That is always a question that could be determined by a court or government agency for various purposes after the fact. And the laws often operate on the assumption of an employment relationship (with the attendant legal consequences). Typically, the burden is on the hiring party to demonstrate that no employment exists, regardless of what the worker intended when entering into the arrangement.

Other aspects of the template agreement could also unwittingly support an employment arrangement. For example, providing an hourly pay rate and certain insurance coverages may be more typical for employees.

Better Approaches to FIFA Compliance

Ultimately, using the DOL’s model freelancer contract is probably better than not satisfying the obligation to put the terms of a freelance engagement in writing. However, hiring parties should strongly consider preparing their own agreements (with appropriate legal advice). It’s probably fair to say the DOL’s template is designed to favor freelancers. Even if not, the one-size-fits-all approach is likely to lead to problems down the road for some hiring parties.

Remember, the Freelance Isn’t Free Act and other related employment/independent contractor provisions are intended to protect workers. Any ambiguity will be resolved to their benefit. Thus, it’s critical to be intentional and cautious in drafting your independent contractor agreements (whether subject to FIFA or not).

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August 20, 2024

FTC’s Non-Compete Ban Blocked Nationwide

On August 20, 2024, the U.S. District Court for the Northern District of Texas enjoined the Federal Trade Commission’s (FTC) proposed non-compete ban. The decision, issued by U.S. District Court Judge Ada E. Brown, sets aside the FTC’s Non-Compete Rule. So, the FTC cannot attempt to enforce the rule when it is scheduled to take effect on September 4, 2024.

The case is captioned as Ryan LLC (Plaintiff) and Chamber of Commerce of the United States of America, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce (Plaintiff-Intervenors) v. Federal Trade Commission, Civil Action No. 3:24-CV-00986-E.

Basis for Injunction

Judge Brown found two legal deficiencies in the promulgation of the FTC’s non-compete rule.

Exceeding Statutory Authority

The court found that the FTC exceeded its statutory authority under the Federal Trade Commission Act (FTC Act). The ruling emphasized that the FTC does not have the power to issue substantive rules that broadly prohibit non-compete agreements across all industries and employment levels. The FTC’s authority to prevent unfair methods of competition does not extend to the creation of sweeping, substantive regulations such as this Non-Compete Rule.

Arbitrary and Capricious Action

The court also determined that the FTC’s rule was arbitrary and capricious. The ruling criticized the FTC for imposing a one-size-fits-all ban on non-compete agreements without adequately considering less restrictive alternatives or providing a rational basis for the rule. Plus, the FTC’s reliance on certain studies was insufficient to justify such a broad prohibition. The judge noted that no state had enacted a rule as far-reaching as the FTC’s proposed regulation.

According to Judge Brown, “In sum, the Rule is based on inconsistent and flawed empirical evidence, fails to consider the positive benefits of non-compete agreements, and disregards the substantial body of evidence supporting these agreements.”

Status Quo Preserved

With the proposed non-compete ban blocked, employers may continue using non-competes to the extent allowed under applicable state law. Note that some states, such as California, already largely prohibit the enforcement of non-compete clauses.

While this ruling halts the FTC’s current efforts, it does not entirely close the door on federal regulation of non-competes. The FTC may attempt to appeal the decision (though the relevant appellate courts are not expected to reach a different conclusion). Alternatively, the FTC may revise its approach with a more limited non-compete ban. Some individual state legislatures will probably revisit potential non-compete bans as well.

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