Employing People in New York: What You Need to Know
EMPLOYMENT AT WILL
In New York, non-union employees who do not have individual employment contracts are employed “at-will.” This means an employer can take adverse action (e.g., fire)
against an employee for any reason, no reason, good reason or bad reason. To illustrate, you may fire an employee because they root for the Buffalo Bills. There is
NO wrongful termination in NY.
Exception to Employment at Will–Unlawful Discrimination
An employer cannot take adverse action against an employee if that action is motivated by the employee’s membership in a “protected class” which includes, but is NOT limited to, race, religion, sex (pregnancy), national origin, age, disability, marital status, military status, sexual orientation, familial status or domestic violence victim status. An employer may NOT retaliate against an employee who complains in good faith about unlawful discrimination (i.e., discrimination on account of membership in a protected class).
Unlawful discrimination in employment is illegal under federal and state laws. The United States Equal Employment Commission (“EEOC”) is a federal governmental agency that enforces federal anti-discrimination laws. The New York State Division of Human Rights (“DHR”) is a state governmental agency that enforces the New York State Executive (Human Rights) Law. The EEOC and DHR have a work sharing agreement. As a general rule, an employee who files a discrimination complaint with one agency protects his/her rights with both agencies.
If you employ 15 or more people (which includes the owners), you must comply with most federal laws that prohibit employment discrimination. If you employee 4 or more people (which includes the owners), you must comply with most state laws that prohibit employment discrimination. If you employ less than four people, you must comply with a state law that prohibits unlawful sexual harassment
If you violate federal and state laws that prohibit employment discrimination, you could be liable to the employee for: (1) back pay; (2) reinstatement/front pay; (3) compensatory damages (which include damages for emotional distress); (4) punitive damages; and (5) attorneys’ fees.
Exception to Employment at Will–Criminal Arrests and Convictions
Section 296(16) of the New York Executive (Human Rights) Law prohibits an employer from making any inquiry about any arrest of an individual not then pending against that individual, which has been resolved in favor of the accused or resolved by a youthful offender adjudication or resulted in a sealed conviction.
An employer cannot compel an employee/applicant to divulge information pertaining to such an arrest. The employer cannot take adverse action against them based by the arrest. Violations are investigated by the DHR.
Employees/applicants who have been convicted of one or more “criminal offense” have some protection from adverse employment action under Article 23-A of the New York Corrections Law. There are eight factors that the employer is required to consider under Section 753(1) of the New York Corrections Law before it can deny or terminate employment.
An employer may require an employee/applicant to disclose prior criminal convictions. If the employer learns that an employee/applicant lied about a previous conviction, it may be grounds for termination of employment.
Miscellaneous Exceptions to Employment at Will
Legal Activities (Labor Law §201-d). Prohibits discrimination against employees who: (1) engage in certain lawful recreational and political activities, or (2) use legal consumable products outside work hours (e.g., smoking cigarettes), off work premises and without using the employer’s equipment.
Whistle Blower Laws (Labor Law §§740-741 & Finance Law 191). Prohibits retaliation against employees who make “protected complaints” (including complaints by health care workers about improper quality of patient care) (Labor Law §§740-741). Prohibits retaliation against employees who complain that their employer has perpetuated a fraud on the state or a local government (Finance Law 191).
Child Care (Labor Law §201-c). Forbids discrimination regarding child care. It does not require employers to provide specific leave periods, but it does require that employees who need child care leave be treated equally under the employer’s leave policies.
Debtor Protection (CPLR §5252). Forbids adverse action against an employee because one or more wage assignments or income executions have been served upon the employer or because of pendency of any action or judgment against the employee for non-payment of any alleged contractual obligation.
Juror Protection (Judiciary Law §519). Forbids adverse action against an employee summoned to serve as a juror if the employee notifies the employer of the duty before the term of jury service starts.
Labor Law Complaints (Labor Law §§215 and 662). Forbids an employer to take adverse action against any employee who: (1) reports a labor law violation (§215); or (2) complains that he has not been paid in accordance with the Labor Law (§662).
Military Service (Military Law §§251-252). Prohibits willfully depriving a member of the military of his employment or prospective employment. Also prohibits an attempt to dissuade anyone from enlisting in the military by threat of injury in respect to his employment. Forbids discrimination against members of an organized militia.
Witness Protection (Penal Law §215.14). Prohibits adverse action against an employee who is summoned to appear as a witness in a criminal trial or who must testify as a victim in a criminal trial, if the employee gives the employer advance notice.
Workers Compensation & Disability Benefit Protection (Workers’ Compensation Law §§120 & 241). Prohibits adverse action against an employee who: (1) files a workers’ compensation claim (or testifies) (§120); or (2) files a short-term disability benefit claim (or testifies) (§241).
There are common law exceptions to employment at will, however, they rarely are successful (e.g., implied by facts [bad handbook] or law [lawyer w/ethical duty]).
PAYING EMPLOYEES PROPERLY
The minimum wage in New York for “non-fast food employees” is $9.70 per hour. For employers in Upstate NY, minimum wage increases will be implemented as follows: (1) On or after
December 31, 2017 – $10.40/hour; (2) On or after December 31, 2018 – $11.10/hour; (3) On or after December 31, 2019 – $11.80/hour; and (4) On or after December 31, 2020 –
The Fair Labor Standards Act (“FLSA”) is a federal law that applies to employers with gross annual revenues of $500K. The New York Labor Law applies to all employers. These laws require that employees be paid not less than the current minimum wage for all hours worked. Non-exempt employees who work more than forty (40) hours in a given week must be paid overtime, i.e., one and one-half times their regular rate of pay for all hours worked above forty (40).
Some employees are exempt from the right to receive overtime pay. To be exempt, the following three must be true:
THE EMPLOYEE MUST BE PAID A WEEKLY SALARY OF A SPECIFIED AMOUNT. IF THE EMPLOYEE IS PAID LESS THAN THE SPECIFIED AMOUNT, THEY ARE NON-EXEMPT (AND ENTITLED TO OVERTIME PAY) AS A MATTER OF LAW.
Currently, the minimum salary for an exempt employee is $727.50/week ($37,830/year). Minimum salary increases will be implemented as follows: (1) On or after December 31, 2017 – $780.00/week ($40,560/year); (2) On or after December 31, 2018 – $832.00/week ($43,264/year); (3) On or after December 31, 2019 – $885.00/week ($46,020/year); and (4) On or after December 31, 2020 – $937.50/week ($48,750/year).
THERE MUST BE NO UNLAWFUL DEDUCTIONS FROM THE SALARY PAID. In simple terms, absent five recognized circumstances, you cannot make any deductions from the salary paid. The regulations contemplate five circumstances under which you MAY deduct from salary: (1) absenteeism; (2) certain sick leave/Family & Medical Leave Act protected leave; (3) penalties imposed in good faith for infractions of safety rules; (4) unpaid disciplinary suspensions; and (5) certain mistaken overpayments.
FINALLY, THE DUTIES PERFORMED BY THE EMPLOYEE MUST MEET ONE OF SEVERALTESTS IN THE FLSA. The most common “white collar” exemptions are:
- Administrative Exemption: This exemption applies if the employee’s primary duty: (1) is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and (2) includes the exercise of discretion and independent judgment with respect to matters of significance.
- Executive Exemption: This exemption applies if: (1) the employee’s primary duty is managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; (2) the employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and (3) the employee must have the authority to hire or fire other employees, etc.
- Professional Exemption: This exemption applies if: (1) the employee’s primary duty is the performance of work requiring advanced knowledge; (2) the advanced knowledge must be in a field of science or learning (such as law, medicine, accounting, engineering, etc.); and (3) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
NEW YORK PAID FAMILY LEAVE (“PFL”)
Starting January 1, 2018, PFL will provide paid job-protected leave to eligible workers. Almost all full-time and part-time NY Employees who work for private employers will be
covered by PFL, regardless of their size.
PFL will phase in over four years: (1) 2018: Employees can take up to 8 weeks of PFL with a weekly benefit of 50% of their average weekly wage (“AWW”), capped at 50% of New York State’s Average Weekly Wage (“NYSAWW”); (2) 2019: Employees can take up to 10 weeks of PFL with a weekly benefit of 55% of their AWW, capped at 55% of NYSAWW; (3) 2020: Employees can take up to 10 weeks of PFL with a weekly benefit of 60% of their AWW, capped at 60% of NYSAWW; and (4) 2021: Employees can take up to 12 weeks of PLF with a weekly benefit of 67% of their AWW, capped at 67% of NYSAWW.
Types of PFL: (1) Maternity and/or paternity leave: This begins after birth and is not available for prenatal conditions. It applies to parents expecting, fostering or adopting a child; (2) Leave to care for a close relative with a serious health condition: A close relative includes a spouse, domestic partner, child, parent, parent-in-law, grandparent and/or grandchild; or (3) Leave to spend time with those (a close relative) called to active military service or to relieve family pressures when someone is called to active military service.
Unlike the similar federal law, employees may NOT take PFL because they themselves have a serious health condition.
Employees are eligible for PFL after working full-time for 26 weeks or part-time for 175 days. They can take the maximum benefit length in any 52-week period. Employers are prohibited from discriminating or retaliating against an employee for taking PFL
Employees are guaranteed to be able to return to their job or a comparable position after returning from PFL. While out, an employee continues their health insurance, but remains responsible for their portion of the premium cost.
An employee may choose to use accruals with PFL to receive their full salary. However, they cannot be required to exhaust it by employers (unlike federal law).
The Family & Medical Leave Act (“FMLA”) is a federal labor law that applies if you employ 50 or more people in a 75-mile radius of where an employee works. The FMLA requires covered employers to provide certain employees with up to 12 weeks of job-protected unpaid leave per year for any of the following reasons: (1) For the birth and care of the newborn child of the employee; (2) For the placement with the employee of a child for adoption or foster care; (3) To care for an immediate family member (spouse, child or parent) with a serious health condition, or (4) To take medical leave when the employee is unable to work because of a serious health condition.
Employees are eligible for FMLA if they have worked for the employer for at least 12 months and have worked at least 1,250 hours in the year before they seek job protected leave.
MANDATORY NOTICES & RECORD KEEPING REQUIREMENTS
NOTICES CONCERNING PAY AND REQUIRED EMPLOYEE BENEFITS
NY Wage Theft Prevention Act. Requires ALL employers to provide a specified written notice to each new hire that must include, among other information, the employee’s rate of pay, including overtime (if applicable), how the employee will be paid, the official name of the employer, the address/phone number of the employer’s principal location and allowances taken as part of the minimum wage. Employers in the hospitality industry (e.g., hotels and restaurants) also must provide this notice to current employees whenever any of the information changes (e.g., upon an increase in pay). Employers in other industries need NOT do so provided that the employee’s pay stub clearly states the changed pay rate. Here is a model notice to a non-exempt employee https://labor.ny.gov/formsdocs/wp/LS54.pdf
Employers must have each employee sign and date the completed notice.
Employers that do not give notice may have to pay damages of up to $50/day per employee, unless it paid employees all wages required by law. The notice must appear in English and the employee’s primary language.
Employers must give employees a wage statement or pay stub each payday that lists payroll data plus the employee’s name, employer’s name, address and phone number, dates covered by the payment and provide a written explanation of how it computed wages if asked for it by the employee.
Workers’ Compensation (“WC”). You must cover all employees. If you are an owner, you may be able to exempt yourself. You must post a notice confirming you have WC coverage. You should get the required notice from your carrier.
Short Term Disability (“STD”). You must cover all employees. If you are an owner, you may be able to exempt yourself. You must post a notice confirming you have STD coverage. You should get the required notice from your carrier. STD benefit fixed by law is 50% of the employee’s usual weekly wage but NOT more than $170/week. This benefit lasts for 26 weeks after a one week waiting period and is taxable. Consider purchasing more STD. It costs less than you think.
New York Paid Family Leave. This is required by state law. Employers must obtain form PFL-120 from their insurance carrier or licensed agent and display the form in a conspicuous location, similar to what they do for Workers’ Compensation and Disability Insurance.
Unemployment Insurance. This is required by state law. You must post the Unemployment Insurance Notice to Employees (IA 133).
Social Security Contribution. This is required by federal law. There is no notice that you must post.
Termination Notice. Upon termination of employment, an employer MUST notify an employee, in writing, of the exact date of such termination and the exact date of cancellation of employee benefits connected with such termination. The notice must be provided NOT LATER THAN five working days after the date of termination (Labor Law § 195 ).
NOTICES CONCERNING VOLUNTARY EMPLOYEE BENEFITS
Health Insurance. Most employers are NOT required to provide health insurance coverage to their employees. If they do so, they do not have to pay the entire cost for the coverage.
If you require an employee to contribute to the cost for this insurance, be careful about how you handle deductions from their wages. NY law is very strict about whether, even
with employee consent, you can make any withholding from an employee’s wages (Labor Law § 193).
COBRA. If you offer health insurance coverage, upon termination of employment, the carrier should issue a notice to the employee about his/her right to continue the coverage, AT THEIR OWN EXPENSE, under COBRA. Alert employees that they may not be eligible for health insurance coverage under the Affordable Care Act (https://nystateofhealth.ny.gov/) immediately if they first elect continued coverage under COBRA.
Long Term Disability (“LTD”) Insurance. Employers are NOT required to provide LTD insurance to employees. Consider purchasing LTD. It costs less than you think.
Paid Time Off (Vacation, Sick, Holidays). Employers are NOT required to provide paid time off for their employees. If you do, you MUST have a written policy and MUST follow that policy consistently. The Department of Labor and courts generally frown on any policy which forfeits “accrued” time off.
RECORD KEEPING REQUIREMENTS
Labor Law § 195 provides that every employer must “establish, maintain and preserve for not less than six years payroll records showing the hours worked, gross wages, deductions and net wages for each employee” (Labor Law § 195 ).
Federal law requires that you verify the identity of all employees and that they are authorized to work in the United States (better known as immigration form I-9). Every employer must maintain copies of the I-9 form for at least three years after the employee is hired or one year after the employee separates from employment, whichever period is longer (8 U.S.C. § 1324a [b]).
Workers’ Compensation Law § 110 (1) requires all employers to maintain injury report forms (better known as Employer Injury Report C-2) for 18 years from the date of the work-related injury.
SOME VALUABLE POLICIES TO IMPLEMENT
Anti-Harassment Policy. This policy is critical if there is alleged sexual or other form of unlawful harassment. It should include an option to notify someone
outside your organization if the principal is the alleged harasser.
Client Confidentiality. You cannot remind your employees enough about the importance of client confidentiality.
Internet & E-Mail Usage. Improper use of the internet or e-mail can harm your credibility, disclose client confidences or subject you to liability.
Confirmation of Employment at Will/Standards of Conduct/Equal Employment Opportunity. Employment at will is an employer’s best friend. It never hurts to confirm it clearly.
Paid Time Off Policy. As noted above, if you offer paid time off, you must have a written policy and must act consistent with that written policy.
New York Paid Family Leave Policy. A policy makes clear the rights and obligations of employers and employees.
HELPFUL WEB RESOURCES
- New York State Division of Human Rights
- United States Equal Employment Opportunity Commission
- Modica Law Firm Advice Library
- United States Department of Labor, Wage & Hour Division
- New York State Department of Labor, Labor Standards
- New York State Department of Labor, Required Posters
- New York State Workers’ Compensation Board, Information for Employers
- New York Paid Family Leave
- New York Paid Family Leave Forms