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July, 2021

Employers Throughout the NY Tri-State Area Face New Obligations: Takeaways Summer 2021

Summer 2021 has brought changes for employers throughout the New York tri-state area, as New York is mandating employers plan for the next pandemic; New Jersey is cracking down on wage law violations; and Connecticut passed four significant new employment mandates on cannabis use, nursing mothers, pay equity and voting. Employer obligations in response to COVID, on the other hand, are now dictated largely at the federal level. Our Summer 2021 issue of Takeaways covers all these legal developments, as well as the most recent federal employment law changes and relevant court decisions.

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3

June, 2021

The Courts Have Awoken: Takeaways Spring 2021

After a dearth of notable caselaw over the course of the pandemic, this past quarter brought five significant decisions across New York, New Jersey and Connecticut — addressing the parameters of employer obligations to medical marijuana users, the scope of New Jersey’s Pregnant Workers Fairness Act, business executives’ liability for harassing conduct by a supervisor, and New Jersey’s ban on arbitration of discrimination claims. Our Spring 2021 issue of Takeaways summarizes all those decisions, as well as recent employment law developments in New York and New Jersey resulting from the legalization of recreational marijuana usage, further updates on the ever-evolving maze of requirements related to COVID-19, expanded protections for discrimination related to employees’ hairstyles and head coverings, and a substantial increase in the minimum wage for federal contractors, taking effect in very short order.

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12

February, 2021

NYC Upends Employment at Will – Revolutionary Change in the Fundamentals of US Employment Law

By Tracey I. Levy

Employment “at will” — the ability to fire an individual for any reason or no reason at all and the individual’s right to quit at any time — has been the bedrock principle of the employment relationship in the United States throughout its history.  Collective bargaining agreements modify that relationship, contractually, in the union context.  Individual employment agreements may similarly include contractual limitations on the employment at will doctrine.  Employment laws modify employment at will by precluding employers from terminating an individual for a discriminatory, retaliatory, or similarly unlawful reason.

But now New York City has gone one step further and abolished the concept of employment at will in its entirety in the discretely targeted area of the fast food industry (defined as fast food chains with 30 or more operating establishments nationally).  While the law thereby will have limited application in its current form, the radical shift that the New York City law presents cannot be understated.  We are unaware of any other state, city or locality that has superseded the principle of employment at will for an entire industry, thereby requiring private employers to demonstrate “just cause” before taking any significant, adverse employment action against an individual employee.

New York City’s new law expands on prior restrictions requiring “predictive scheduling” for hourly fast food workers to now provide that, absent “just cause” or a “bona fide economic reason,” once such employees successfully complete a 30-day probationary period they cannot be “discharged”, which means not only that they cannot be fired, but that they cannot be suspended indefinitely, laid off, or subjected to more than a 15% reduction in their scheduled work hours.  While “discharged” is thus defined quite broadly, the new law defines “just cause” quite narrowly, as an employee’s “failure to satisfactorily perform job duties or misconduct that is demonstrably and materially harmful to the fast food employer’s legitimate business interests.”  The law then builds on that definition to provide that, absent “egregious” behavior, the just cause standard cannot be satisfied unless the employer already has in place a written progressive discipline policy that was provided to the employee, and the employer followed its progressive discipline process.  Disciplinary actions taken more than a year prior to the discharge effectively expire, as the law says they cannot be considered part of the progressive discipline process.  Finally, employers need to be careful with their documentation, as they must provide the impacted employee with a written explanation of the precise reason for discharge within five days, and they effectively waive the right to later defend their action based on any reason that is not included in that written explanation.

To assert that termination was due to a “bona fide economic reason,” the employer must show through its business records that, in response to reduced production volume, sales or profit, it needs to fully or partially close its operations or make technological or organizational changes.  When invoking this standard as a reason for discharge, employees must be let go in reverse order of seniority, so that the longest tenured employees are the last to go and the first to be rehired.  For a twelve-month period following such a discharge, the employer has to make “reasonable efforts” to reinstate former employees before it can offer shifts to other employees or hire anyone new.

Employees are entitled to reinstatement if they are found to have been discharged without just cause, plus the employer must bear the cost of the employee’s reasonable attorneys’ fees and may be liable for back pay and punitive damages.  As a further penalty, the employer will be liable for schedule change premiums, as provided under the existing predictive scheduling law, for each shift the employee loses as a result of having been discharged without just cause.  Alternatively, the law makes arbitration available as an option to employees, beginning in January 2022, and provides that a losing employer must reimburse the city for the cost of the arbitration.

The broad definition of “discharge”; narrow definition of “just cause”; precise policy, notice and documentation requirements; and heavy financial costs imposed on a losing employer collectively provide fast food employees with unprecedented job protection, likely greater than that provided anywhere else in the country.  Even well-intentioned employers that are indisputably contending with employees presenting persistent attendance issues, repeated underperformance, or offensive behavior may find themselves tripped up by the procedural requirements of the law, particularly the five-day window to thoroughly document the precise reason for discharge.  Similarly, by defining a work schedule reduction of more than 15% as a “discharge”, the new law brings the full weight of the documentation and enforcement provisions down on employers endeavoring to adjust work schedules to meet business needs.

Finally, the law’s recognition of seniority as the sole basis for determining employee selections in the event of a downsizing or restructuring deprives employers of necessary flexibility in making selection decisions.  The longest tenure does not consistently equate with the best performance and skillset, yet the law fails to recognize the relevance or legitimacy of those factors in reviving a struggling business.

While the applicability of this law is limited to a discrete industry, its import is manifold greater.  Government-mandated paid sick leave was unheard of in the private sector when it was adopted by San Francisco in early 2007, and in the subsequent 14 years such laws have proliferated to 13 states, the District of Columbia, and discrete localities in at least five other states.  The precedent has been set, and absent responsive action by the business community, it may not be long before employment at will fades away as past history.

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30

December, 2020

Extension of FFCRA Credit Helps NYS Employers

By Tracey I. Levy

As a post-script to our last blog post, the latest federal COVID-19 relief package, which was signed into law on December 27, 2020, includes a short-term extension of the FFCRA tax credit that offers some additional financial relief for New York State employers.  As we previously discussed, the paid leave requirements of the FFCRA are set to expire December 31, 2020, and the new COVID-19 relief package allows those requirements to sunset.  However, those employers that voluntarily elect to continue to provide the paid leave that was available under the FFCRA, under that law’s eligibility requirements, can continue to claim a federal payroll tax credit through March 31, 2021 to offset the cost of that leave.  New York employers do not have an option with regard to providing COVID-19 leave, and therefore the extension of the FFCRA credit may be a valuable benefit to manage the associated costs.

There are some notable limitations on which employers can benefit from the federal tax credit:

  • Large Employers

Employers with more than 500 employees are subject to the New York State paid leave requirements, but were not subject to the FFCRA paid leave requirement and therefore cannot claim the credit;

  • Multiple Quarantines for the Same Employee

To the extent the reasons for leave under the FFCRA and New York State law have overlapped, the FFCRA tax credit was limited to a total of ten days of paid leave, per employee.  However, the New York State law does not appear to place a limit on the number of times an employee can receive paid leave, provided each leave is in accordance with a government-mandated quarantine or isolation order.  Once an employer has claimed the FFCRA tax credit for an employee, it appears that it cannot be claimed again for a repeat occurrence of quarantine.

New York State employers should consult with their tax advisor with regard to the availability of the tax credit in specific circumstances.

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30

November, 2020

Three Key Employment Items to Address Before the New Year

By Tracey I. Levy and Alexandra Lapes

As the new year quickly approaches, employers should aim to update their policies and practices to stay legally compliant and prepare their workforce for the new year.   In particular, employers in New York, Connecticut and New Jersey need to ensure they are complying with harassment prevention training requirements, have updated their sick and safe leave and their harassment and discrimination prevention policies, and have updated their procedures to meet new notice, payroll, and tracking requirements.

1. Training

This is year two for meeting the annual New York State and New York City interactive sexual harassment prevention training requirements.  Employers that have not yet conducted training this year should make that a priority before year-end to remain in compliance at both the state and city levels.  Note, for new hires, New York City requires employers with 15 or more employees to conduct initial training within their first 90 days, and all other New York employers are subject to the state’s requirement for training to be conducted as soon as practicable after hire.  When conducting the training, employees must be provided with a copy of the employer’s sexual harassment prevention policy, training materials, and a notice of employee rights.

Connecticut employers are also required to conduct sexual harassment prevention training, and the Connecticut Commission on Human Rights and Opportunities recently extended that deadline to January 1, 2021.  Employers with three or more employees must train all their employees, while the smallest employers need only train those in a supervisory role.  Meeting this training obligation will satisfy an employer’s legal requirements for the next ten years as to existing employees, but on an ongoing basis, new hires need to be trained within six months after they are hired.

2. Policies

Employers should review and revise their employee handbook policies on sick and safe leave, harassment prevention, and anti-discrimination, to ensure compliance with recent changes in the law.

  • Sick and safe leave
    • New York State adopted a state-wide paid sick leave law (in addition to the pandemic-related paid leave law), that requires employers to provide up to seven days of paid sick leave per year, depending on the size of the employer.
    • New York City expanded its paid sick leave law to mirror and expand upon the state law provisions. The amendments will require New York City employers to update their paid leave policies to reflect the new updated accrual amounts and eliminate certain eligibility and waiting period requirements, as well as to add “domestic violence” as an additional basis for taking leave.
    • While Westchester County has its own paid sick leave law, the county has posted a notice on its website that the state law now governs paid leave and employers should refer to the state law for their rights and obligations. Note that there is no similar notice with regard to the Westchester County paid safe leave law, and employers should therefore assume that the safe leave law’s separate paid leave requirements are still in full force.
  • Harassment and discrimination prevention
    • Employers in New York State should update their harassment prevention policies to reflect the State Human Rights Law’s new definition of sexual harassment.
    • New York State employers must also update their policies to provide employees with appropriate notice of their rights and remedies with regard to reproductive health decisions, including a prohibition against discrimination and retaliation based on an employee’s or an employee’s dependent’s reproductive health decision-making.

3. Notice Requirements

The following payroll and tracking procedures must be put in place, in addition to meeting new notice and posting requirements.

  • Payroll and Tracking
  • New York State employers must:
    • Maintain paid sick leave records for no less than six years; and
    • Be prepared to timely provide employees with a summary of the amount of sick leave accrued and used upon request.
  • New York City employers must additionally provide:
    • Accrual, usage, and paid sick leave balance information to employees each pay period;
    • Written notice by January 1, 2021 (see notice link here) of employees’ paid sick leave rights at hire and to current employees of organizations with 100 or more employees, and conspicuously post that notice; and
    • Retain compliance records for at least three years.
  • Westchester County employers must additionally provide:
    • A Notice of Employee Rights and a copy of the County’s Safe Leave Law to all new hires; and
    • Display the required Safe Time poster both in English and Spanish, in a conspicuous location.
  • New Jersey employers with 10 or more employees must ensure they have:
    • Updated their payroll statements to ensure that they each specify: the employee’s gross and net wages; the employee’s rate of pay; and, for hourly employees, the number of hours worked during the pay period.
  • Job Protection
  • New Jersey employers must have conspicuously posted (as of April 1, 2020), two notices regarding employee misclassification.
  • Connecticut employers must provide information on the illegality of sexual harassment and remedies available to new hires within three months of their start date and send this information to each employee.
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