More Changes to the Employment Landscape NY Employers Need to Know

July 31, 2019

By: Kimberly Klein, Shari A. Alexander, and Rachael M. Senatore

2019 has been an exceptionally busy year for New York businesses trying to keep up with changes to the employment landscape.  Below are six important changes companies need to know: 

1. NYS provides paid time off to vote.
2. U.S. DOL proposes new joint employer test favorable to employers.
3. U.S. DOL proposes changes to workers’ regular rate of pay.
4. U.S. Supreme Court: No class action arbitrations unless explicit in agreement.
5. NYC prohibits discrimination based on reproductive health.
6. NYS DOL abandons proposed predictive scheduling rules.

New York State Amends Election Law Allowing Workers Up To Three Hours of Paid Time Off to Vote

On April 12, 2019, Governor Andrew Cuomo signed into law an amendment to the Election Law entitling employees in New York to three hours of paid time off to vote as part of New York’s 2020 budget.

The amendment to New York Election Law Section 3-110 provides that all registered voters may request up to three hours of time off, regardless of their schedule, without loss of pay to enable the employee to vote in any public election.  Employers may designate whether the time off will be taken at the beginning or end of the employee’s shift.

To be entitled to voting time off, employees must be registered to vote and must provide at least two days’ advance notice of the need for time off to vote.

Prior to this amendment, employees were eligible to request up to two hours of paid time off to vote if they did not have four or more consecutive hours off between: (i) the time when the polls opened and they began their shift; or (ii) the end of their shift and the closing of the polls.


U.S. DOL Proposes New Test Favorable to Employers to Determine Joint Employer Status

On April 1, 2019, the U.S. Department of Labor (“DOL”) announced a proposed rule to revise the test to determine when an employer is a joint employer.  Such a finding would require a company to exercise control over the terms and conditions of a worker’s employment.  The Proposed Rule sets forth a four-factor test which considers whether the potential joint employer actually exercises the power to:

  • hire or fire the employee;
  • supervise and control the employee’s work schedules or conditions of employment;
  • determine the employee’s rate and method of payment; and/or
  • maintain the employee’s employment records.

The Proposed Rule also provides helpful examples setting forth when an employer would be considered a joint employer, including:

  • Two restaurant establishments affiliated with the same nationwide franchise that employs the same individual would not be considered joint employers where the establishments are owned by different franchisees and do not coordinate control over the employee.  If however, the franchises had the same owner and coordinated the employee’s terms and conditions of employment, the establishments would be joint employers.
  • A company hires a third-party vendor, such as a cleaning or landscaping company.  As long as the company does not supervise, oversee or direct the work of the third-party vendor’s employees or have the ability to terminate or keep records of the employees, the hiring company will not be found to be a joint employer.
  • Where a company hires workers from a staffing agency and determines the workers’ hourly rate of pay, supervises their work and adjusts their hours, the company will be considered a joint employer with the staffing agency.

Prior to the Trump administration, the DOL and the National Labor Relations Board had found that a company and its contractors or franchisees could be deemed a single joint employer even if the company has not exerted overt control over workers’ terms and conditions of employment.


The DOL Proposes Changes to Worker’s Regular Rate of Pay

For the first time in more than 50 years, the U.S. DOL is proposing a rule that would redefine a worker’s regular rate of pay when determining overtime.  Under the current rules, the DOL has found that employers are discouraged from offering perks and other benefits to workers because these costs must be included in the regular rate of pay, exponentially increasing a worker’s overtime rate.

The Proposed Rule would allow employers to exclude the following from an employee’s regular rate of pay:

  • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;
  • payments for unused paid leave, including paid sick leave;
  • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
  • reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements;
  • discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;
  • benefit plans, including accident, unemployment, and legal services; and
  • tuition programs, such as reimbursement programs or repayment of educational debt.

Should the Proposed Rule pass, employers will have more options offering workers’ benefits without increasing overtime rates.


Ambiguous Arbitration Provisions Are Insufficient to Compel Class Arbitration

On April 24, 2019, the U.S. Supreme Court ruled 5-4 that arbitration provisions must explicitly provide for class arbitration, making it harder for employees to arbitrate collectively.  Lamps Plus Inc., et al. v. Varela, No. 17-988, 2019 WL 1780275 (April 24, 2019).  This decision is consistent with and further clarifies the Supreme Court’s prior class arbitration decision Stolt-Nielsen SA v. Animal Feeds Int’l, 559 U.S. 662 (2010), which held that an agreement’s silence on class arbitration is not enough to compel class arbitration.

The ruling reversed a Ninth Circuit holding, which affirmed a trial court’s decision to compel class arbitration where the language in the arbitration agreement did not specifically address class actions.  In affirming, the Circuit court relied on the general principle that ambiguous contracts must be interpreted against the drafter.

In reversing, Chief Justice John Roberts, who authored the decision, held:  “Under the Federal Arbitration Act, an ambiguous agreement cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration.”


New York City Law Protects Employees from Reproductive Health Decision Discrimination

On January 20, 2019, a new amendment to the NYCHRL became law, further broadening the list of protected classes under the NYCHRL by prohibiting discrimination or harassment based on an individual’s “sexual and reproductive health decisions.” The amendment took effect on May 20, 2019.

Under the law, “sexual and reproductive health decisions” means “any decision by an individual to receive services, which are arranged for or offered or provided to individuals relating to sexual and reproductive health, including the reproductive system and its functions.” The new amendment also provides a non-exhaustive list of these services, such as:

  • Fertility-related medical procedures;
  • Sexually transmitted disease prevention, testing, and treatment; and
  • Family planning services and counseling, such as birth control drugs and supplies, emergency contraception, sterilization procedures, pregnancy testing, and abortion.

The NYCHRL applies to all New York City employers with four or more employees. Accordingly, all employers subject to the NYCHRL should take proactive steps to make sure their existing equal employment opportunity and anti-discrimination policies and employee handbooks are updated to comply with the new amendment, and that supervisors, managers, and human resources staff are informed of the new protected category.


NYS DOL Abandons Proposed Predictive Scheduling Rule

As we previously reported [link to], on December 12, 2018, the NYS DOL published revised proposed regulations that would impose penalties designed to curtail several scheduling practices that are common among employers, such as on-call scheduling, last-minute cancellations (or new shifts), and call-in requirements.  On March 1, 2019, the NYS DOL announced that it is abandoning the proposed rule altogether, but held open the possibility that it would revisit predictive scheduling “in the future”.

In the announcement, the NYS DOL stated:

Based on extensive feedback in the subsequent comment period, it was clear the Department’s initial intent to support workers while being fair to businesses was viewed as a one-size-fits-all approach that was not appropriate for every industry. Comments on the revised rules, issued in late 2018, indicated that significant issues remained, and the revisions did not achieve the balance of certainty and flexibility for either workers or businesses.

See other Moses & Singer articles regarding 2019 employment laws:
NYS Makes It Easier for Employees to Bring Harassment Claims
Employment Laws NY Employers Need to Know in 2019
More Employment Law Changes NY Employers Need to Know
New York Legislature Passes Bill That Would Allow Liens Against Employers For Unpaid Wage Claims
New York Mandated Annual Sexual Harassment Prevention Training

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