29

August, 2022

Unlimited Time Off Presents Hidden Challenges for Employers

I have increasingly been fielding inquiries from organizations that are looking to implement some version of unlimited time off for their employees. They saw that employees continued to be productive while working remotely during the pandemic, and they want to give them the flexibility to take time off as/when needed – provided the work still gets done. The motives behind these policies are commendable, but the challenge lies in their implementation.

Consider Scope as to Legally Required Time Off
Employers currently face a myriad of paid leave requirements, which vary by state and locality. These laws may mandate paid time for sick leave, domestic violence victims, care of family members, voting, jury service, witness duty, blood donation, bone marrow donation, attending school meetings and activities, public health emergencies, bereavement, or for no specific reason at all. When considering an unlimited time off policy, employers need to determine whether the policy is intended to cover some or all of these paid time off legal requirements.

Employers are also required in various locations to provide a range of unpaid time off, which may include family and medical leave, pregnancy disability leave, military leave, family military leave, leave for first responders, leave for crime victims, and lengthier leave for jury service. Some states offer partial compensation through state-regulated programs for certain periods of unpaid leave. In most circumstances, even the biggest proponents of unlimited paid time off do not intend to pay for the time used during most or all of these leave periods, particularly not for legally required leaves that can extend for months at a time. The scope of the unlimited time off policy in relation to legally required leaves needs to be determined in advance so that policies can be properly drafted.

Is This Just for the Employee’s Self-Care, or Family Too?
Also when considering scope, employers should determine whether they want unlimited paid time to be available for care of family members. Employers may intend for the unlimited paid time to cover employees who are themselves ill or injured, even for extended periods of time, and they can cap their payroll exposure by requiring qualifying employees to apply for short-term and long-term disability benefits for more extended absences. However, most paid sick leave laws are not limited to leave for the employee’s own illness or injury. The sick leave laws extend to family members – often spanning multiple generations and even individuals who are “like” family but with no blood or marital relationship.

Granting unlimited paid time off to care for family members can quickly leave an employer in an awkward situation of trying to balance its broad policy offering, the statutory protections that cover at least part of the leave time, and the need to have the employee get work done. Some employers address this by carving out care of family from their “unlimited” time off policies. They may choose to grant only the legally required leave for care of these individuals, or may provide a benefit that is more generous than the law, but less than “unlimited.” Other employers reframe the unlimited time off policy as intended for discretionary and personal reasons, akin to a combination of vacation, personal days and flexible holidays, and maintain a separate, statutory-compliant paid sick and safe leave policy that caps the amount of time employees can use for their own or a family member’s illness, injury or related medical or safety reasons.

Consider Approvals and Documentation
The temptation and appeal of an unlimited policy is to be free from all the legal mandates related to time off policies. Senior leaders just want employees to be “responsible adults,” take the time they need and make sure they do their jobs.

The reality is that reasonable minds will differ as to when an employee is acting responsibly when determining when and for how long to take off from work. “Unlimited” time does not relieve managers of the responsibility to manage their employees.

While requesting medical or other documentation in support of a time off request may seem superfluous if the time off is “unlimited,” such documentation can be critical to ensure that, when time is being taken for legally protected reasons, it is given appropriate consideration. And when time is being taken “just because,” managers should have greater flexibility to advise employees if the scheduling of that time off would be contrary to business needs, and delay or deny those requests.

Spell It All Out in Writing
An unlimited paid time off policy must address all the above considerations and the parameters that the employer has chosen to set with regard to the scope, use, timing, and ancillary requirements under its policy. To the extent that paid or unpaid leave laws may require specific language or provisions to be included, that too should be folded into the unlimited time off policy – if the leave law is intended to be satisfied through the unlimited paid time off policy. And if the legally protected leave is being carved out as an exception to “unlimited” paid time off, then that needs to be made clear in the written policies as well.

Finally, in those locations where paid sick leave and other specific time off accruals and usage need to be reflected on pay stubs or elsewhere, employers should consult with legal counsel and their payroll provider as to where and how accruals should be reflected. Some jurisdictions have held that no accruals need to be posted when a policy grants unlimited time, while other jurisdictions have been less clear on how that notice requirement is to be satisfied.

Keep Perspective
Legislators mean well when they adopt new paid and unpaid leave requirements. But these laws are often written from the perspective of protecting employees from miserly employers. They can feel unduly constricting to generous employers that want to give employees time to relax and manage their personal obligations, but do not want to run afoul of the law.

Some version of “unlimited” time off is achievable even in the most regulated localities. The policies just need to be thought through in advance, in the context of applicable leave laws, and drafted to cover the relevant parameters. This is one of those situations in which it would be prudent to seek guidance from legal counsel.

By Tracey I. Levy

Facebooktwitterredditpinterestlinkedinmail
25

July, 2022

CTFMLA Notice to Employees Is Overdue, Employers Need to Update Policies

Connecticut employers sorting through the complexities of the amended Connecticut Family and Medical Leave Act (CTFMLA) and Connecticut Paid Leave Act (CTPL) need to ensure they are providing all new hires with the requisite notice, which explains CTFMLA entitlements, employee obligations, the prohibitions against retaliation, and the procedures to file complaints with the Labor Department for alleged violations.  This is a new requirement, effective as of July 1, 2022.

Employers additionally have an ongoing obligation to provide employees with notice of their rights under CTFMLA and CTPL on an annual basis.  Employers may wish to update their employee handbooks to include the notice provisions.  While not yet final, pending regulations proposed by the Department of Labor indicate that such a handbook update will satisfy the annual notice requirement.  Also, FAQs issued by the Department of Labor include this recommendation.

Expanded Reasons for Leave

CTFMLA and CTPL collectively provide eligible employees with job-protected leave and income replacement while the employee:

  • recovers from or cares for a family member with a serious health condition;
  • bonds with a child newly added to the family;
  • serves as an organ or bone marrow donor;
  • addresses qualifying exigencies related to a close family member’s military service; or
  • cares for a close family member who is seriously ill or injured while on active duty in the armed forces.

CTFMLA provides the job-protected leave entitlement, while CTPL is an income replacement program.  CTPL is additionally available for employees who have been impacted by family violence, and in that context the employee’s ability to take the leave is protected under the Connecticut Family Violence Leave Act.

Other CTFMLA Provisions Also Expanded

Employers should note that these laws are newly effective as of January 1, 2022.  They alter and expand employers’ prior CTFMLA obligations and add a new layer of paid leave.  Employers that were familiar with and meeting the prior CTFMLA requirements must ensure that they have updated their policies and practices to reflect the changes to the law – which expand the uses of CTFMLA, and shift from a schedule of leave taken over a 24-month period to a program of up to 12 weeks of job-protected leave over a 12-month period (thereby more closely mirroring the federal FMLA).  The new CTFMLA further grants employees who are incapacitated due to pregnancy an additional two weeks (14 in total) of job-protected leave, and again mirrors the federal FMLA in that it provides employees who are caring for a covered service member with up to 26 weeks of job-protected leave in a 12-month period.  Another key change under the new version of the CTFMLA is that, while employers can require employees to use their accrued, paid time off during their leave period, employees can exempt from that requirement and preserve up to two weeks of their paid time off to be used for other purposes.

By Tracey I. Levy

Facebooktwitterredditpinterestlinkedinmail
16

June, 2022

Beyond Job Postings, New York State Pay Transparency Laws Would Create a Foundation for Massive Employee Pay Data and Pay History Collection

Two bills passed by both houses of the New York State legislature and currently awaiting submission to the governor for signature add a new, and significant, dimension to the range of pay transparency laws that are proliferating around the country.  Starting from the most public version of pay transparency requirements in the context of individual job postings, these laws impose substantial data retention and reporting requirements that may have widespread implications for future assessment of the equitableness of employers’ pay practices.

Pay Transparency in Job Postings

The first pending New York State law follows the model of New York City and Colorado in that it will require employers to disclose in their job postings the proposed wage or range of wages that would be paid for an advertised job, promotion or transfer opportunity.  The law will prohibit employers from refusing to interview, hire, promote, employ, or otherwise retaliate against an applicant or employee for that individual’s exercise of rights under the pay transparency law.

Where the law is more expansive than others is in two respects.  First, it additionally requires employers to include the job description in their posting or advertisement, if a description exists.  Second, and building on that requirement, the law expressly requires employers to retain:

  • a history of the compensation ranges for each job, promotion or transfer opportunity; and
  • the job descriptions for those positions.

While the pay transparency law will not require employers to report or otherwise collectively disclose that compensation history, another law passed by the state legislature and pending the governor’s signature will, if adopted, expand employee compensation reporting requirements for employers.

Equal Pay Disclosures – State Contractors

Described as relating to equal pay disclosure for state contractors, this second pending law will require contractors to submit reports that include a summary of their “workforce pay averages” (a term not defined by the legislation), which are to be calculated by job category, gender, race and ethnicity, and also report the percentage difference between pay averages in each category.  Businesses with 100 or fewer employees would be exempt from the pay disclosure reporting requirement.

The pending law makes clear that it does not mean to impose a mere paperwork exercise.  Rather, various state government leaders are to receive annual reports related to the information gleaned from the reports.  All the reports are required to be available to the public for inspection and copying, redacting only individual employee names and social security numbers that may have been included.  Further, all government agencies that have retained government contractors are required, “where practicable, feasible and appropriate,” to assess the equal pay practices of contractors submitting bids or proposals to be awarded a state contract.

Implications if New York State’s Pay Transparency Initiatives Become Law

There are substantial, and valid, considerations motivating this drive toward greater wage transparency, as we have discussed in past blog articles and in an interview I did with Dr. Ruth Gotian for Forbes.com.  And there also is reason to question whether these laws will actually achieve their intended objective of wage parity.  Will arming applicants and employees with more information be sufficient to overcome differences in negotiating style (that often correlate with gender and racial differences, whether that be attributable to natural proclivities, defensive techniques developed in response to unconscious bias, or other factors)?

If signed into law, these new legislative requirements pull employers into the center of a massive experiment.  Historical data that employers are required to gather and retain provides a ready source of new information that plaintiffs’ lawyers can likely obtain through discovery and utilize in support of legal claims.  And it is not a far leap to anticipate subsequent legislation that requires employers to publicly report, publish or analyze the data that they will soon be required to collect and retain.  The proposed equal pay disclosure law for state contractors already exemplifies that approach.

Pay transparency laws, particularly in a state like New York where employees have a protected right to discuss salary information with one another, will invite probing questions from existing employees who suddenly learn they are far lower on the pay scale than they had realized.  Already HR colleagues have reported that they are fielding these types of inquiries as to rationale and pressure to boost pay for certain employees.  Employers that have not holistically evaluated their compensation philosophy, methodology and baseline data, and those employers that do not currently have well-defined roles that align with detailed job descriptions and salary bands, may face serious employee relations issues, or worse, under pay transparency mandates.

In New York State, the earliest any of these laws will take effect is November 1, 2022.  Perhaps a pay audit and equity analysis as a summer project?

By Tracey I. Levy

Facebooktwitterredditpinterestlinkedinmail
4

April, 2022

NYC Wage Transparency Law Has Its Limits Under NYC Guidance

By Tracey I. Levy

New guidance issued by the New York City Commission of Human Rights expounds on both the breadth, and the limitations, of the city’s new wage transparency law.  The law, which we discussed in our prior blog article, requires employers posting for a position in New York City to state in their job posting the minimum and maximum salary for the position.  This requirement is currently scheduled to take effect May 15, 2022, but there is a pending legislative proposal under consideration in the City Council to delay the effective date.

Update: a May 12, 2022 amendment to the law delays the effective date to November 1.

Breadth in Applicability

The wage transparency law covers employers with four or more employees or one domestic worker.  When counting “employees,” business owners, employees, interns and independent contractors must all be considered, as long as at least one of them works in New York City.  Employment agencies are also covered.  There is an exception for temp firms seeking applicants to join their pool of available workers, but the law provides that the employers who work with those temp firms must follow the new wage transparency law.

The law also extends to every form of advertisement or job posting – whether internal or external, printed or electronic, published or circulated.  And it covers any type of job – whether a new position, a promotion or a transfer.  Employers need not advertise for a position in order to hire, but if they do post or advertise in any way then the guidance states that they must comply with the law.

Limitations in Wage Information to Be Disclosed

Significantly, though, the wage transparency law is about disclosure of base pay only.  Whether defined as an hourly wage or a fixed salary, that dollar value must be disclosed.  The guidance makes clear that employers are not required to disclose, for example, either in specific or general terms, any bonuses, commissions, tips, stock, overtime pay, or other forms of compensation that may apply to the position.  Compensation structures that will thereby experience little impact from the new law include:

  • sales jobs paying largely on a commission basis;
  • mid-level and higher positions in industries such as financial services for which the bulk of compensation is in the form of discretionary bonuses; and
  • positions at tech firms and other start-ups that offer stock option awards as a significant component of their overall compensation plan.

New York City’s new law also does not require disclosure of wage supplements, such as paid time off, or benefits, including insurance or pension plan contributions.  In this regard the law differs from its closest counterpart in Colorado, where employers are required to include in their job postings a general description of any bonuses and the nature of benefits provided.

The law further has its limitations – and the guidance is not particularly helpful – in regard to the wage range to be posted.  Where the pay is fixed, perhaps at or slightly above minimum wage, meeting this requirement is as simple as posting “$15 per hour.”  Where there is more flexibility or variability, depending on factors such as the candidate’s prior skills and experience or meeting the candidate’s stated salary expectations, New York City employers are directed to post a wage range based on the employer’s honest belief as of the time of the job posting as to the range of pay it would offer to a successful applicant.

States with similar wage transparency laws, most notably neighboring Connecticut, have defined benchmarks for employers to use in defining the wage range.  These may be an applicable pay scale, the amount budgeted for the position, or the actual range of wages for those employees currently holding comparable positions.  The New York City law, and this new guidance, are both silent on that point.  Nothing in the law or the guidance states that an employer cannot hire someone at a wage that is above or below the posted range, but there also is nothing in the law or guidance that assures an employer it can make those hiring decisions.

Employers that hire, transfer or promote candidates into roles at wage rates that fall outside the posted range must therefore be prepared to demonstrate the bona fides of their original wage range estimate, as reflected in the job posting.  These employers also should be prepared to explain why/how the wage they ultimately agreed to pay was not foreseeable at the time of the job posting.

Facebooktwitterredditpinterestlinkedinmail
25

March, 2022

3 Handbook Policy Requirements that New York Employers May Overlook

By Tracey I. Levy and Alexandra Lapes

Spring cleaning is a great time for employers to revisit their employee handbook policies to confirm that they comply with current legal obligations.  In addition to updates prompted by new legislation, there are more long-standing, New York-specific requirements that we find employers may overlook.  These include specific provisions on accommodation of breastfeeding employees, protection of reproductive health decisions, and smoking prohibitions.

Policy on Lactation Accommodation

All New York State employers are required to make reasonable efforts to provide their employees with a designated room or other private, sanitary location that is not a bathroom, as well as reasonable unpaid break time, for the purposes of expressing breast milk.  New York City law requires that employers have a written policy regarding the rights of nursing mothers to express milk at work, which it distributes to all employees upon hire.  The New York State Division of Labor Standards has similarly issued guidelines that employers are expected to provide employees who are returning to work following the birth of a child with written notice, either individually or through a written handbook policy, regarding their right to break time and an appropriate location for expressing breast milk.

A declarative statement as to the availability of appropriate time and space to express breast milk, or of the employer’s support of its breast-feeding employees, may not be sufficient.  The New York City law specifies a plethora of provisions that must be in the written policy, including:

  • a statement of the employee’s right of access to an appropriate lactation room and reasonable break time to use it;
  • how to request access to the designated lactation room;
  • reference to the employer’s obligation to respond to access requests within a reasonable timeframe, not to exceed five business days;
  • a procedure to follow when two or more individuals need to use the room at the same time; and
  • assure employees that if the request poses an undue hardship, the employer will engage in a cooperative dialogue with the employee to provide a reasonable accommodation.

Reproductive Health Decisions Policy

All employers in New York State are prohibited from discrimination based on an employee’s or the employee’s dependent’s reproductive health decisions.  The law further requires that any New York employer that provides an employee handbook to its employees must include in the handbook a notice of employee rights and remedies under the law.  This includes notice that:

  • employers are prohibited from accessing an employee’s personal information regarding the employee’s or the employee’s dependent’s reproductive health decision making;
  • employers are prohibited from discriminating or retaliating against an employee based on the employee’s or dependent’s reproductive health decision making;
  • employers are prohibited from requiring an employee to sign a waiver of the employee’s right to make reproductive health decisions; and
  • employees have the right to bring a civil action against the employer for violation of the law and available remedies.

Some employers satisfy this obligation with a separate reproductive decisions policy.  Others may choose to incorporate the requisite provisions pertaining to reproductive health decisions into existing handbook policies that prohibit discrimination and retaliation and specify employees’ legal rights and available remedies under the laws against harassment, discrimination and retaliation.

Note: a March 29, 2022 federal district court decision, CompassCare et.al v. Cuomo, has permanently enjoined enforcement of the notice requirement with regard to reproductive health decisions, on the grounds that it violates the First Amendment.

Smoking Prohibitions in the Workplace

It has been several decades since New York State, New York City, and various counties adopted laws prohibiting smoking in the workplace and other public areas, such that those restrictions are no longer novel or surprising to most workers. This cultural shift may lead employers to overlook a long-standing requirement in many of the local laws, including from Westchester County and Suffolk County, that employers adopt and maintain written policies against smoking in the workplace. New York City’s law goes a bit further in its specificity.  The New York City law requires every employer to have and distribute to all new employees when hired a written policy outlining:

  • the legal prohibitions on smoking and the use of electronic cigarettes;
  • the protection from retaliation for employees or applicants who exercise their right to a smoke-free workplace; and
  • the employer’s procedure for an employee to raise concerns in the event of perceived retaliation.

Takeaways

The passage of time can dull any employer’s recollection of when handbook policies are simply memorializing employer expectations and practices, and when those policies are driven by legal requirements.  The latter must be maintained and updated as the law changes.  Now is a great time for employers to take stock of their handbook policies, and ensure they have the requisite provisions to comply with the law.

Facebooktwitterredditpinterestlinkedinmail
Back to Top