Ten Important Employment Law Updates for New York Employers

October 28, 2020

By: Kimberly Klein, Shari A. Alexander, John Vincent Baranello, Daniel A. Hoffman, Rebecca Zittell, and Eliza Barrocas

Since March 2020, New York employers have had to scramble to keep up with the many new employment laws as a result of COVID-19.  Below we highlight 10 employment law changes and updates that businesses need to know in 2020:

  1. Reminder to Conduct Annual Sexual Harassment Training
  2. Increased Leave under NYS Paid Family Leave
  3. Updates to NYC Earned Safe and Sick Time Act
  4. NYC Deems COVID-19 a Protected Classification
  5. The DOL Proposes New Independent Contractor Test
  6. NYS Sick Leave Law Goes Into Effect
  7. OSHA Issues Virus Reporting Rule
  8. NY Court Strikes Down Portion of DOL Revised Joint Employer Rule
  9. DOL Updates FMLA Forms
  10. Governor Vetoed Wage Theft Bill

Reminder to Conduct Annual Sexual Harassment Training 

New York State employers with one or more employees and New York City employers with 15 or more employees who work at least 80 hours in a calendar year must conduct annual sexual harassment training by end of the year if they have not yet done so.  Under New York City law, independent contractors are considered employees and must also undergo the training.  The training requirement, which went into effect in 2019, must be interactive. 

Employers should consider live training for management-level employees and can contact Moses & Singer attorneys to meet their training obligations.

Increased NYS Paid Family Leave (PFL)

Beginning January 1, 2021, New York employers must increase the amount of employee-funded PFL provided to applicable employees from 10 to 12 weeks.  The leave, which applies to all NY employers, may be taken to bond with newly born, adopted, or fostered children; care for family members with a serious health condition; or assist loved ones when a family member is deployed abroad on active military service.  Employees may also be eligible to use PFL if a worker or a minor dependent child are under an order of quarantine or isolation due to COVID-19.  Full-time employees (who have worked 26 consecutive weeks) and part-time employees (who work less than 20 hours per week and have worked a total of 175 days) are eligible for the leave. 

Eligible employees will receive 67% of their average weekly wage (up from 60%), capped at 67% of the NYS average weekly wage which, for 2021, will be $1,450.17, making the maximum weekly benefit $971.61.  Employees contribute .511% of their gross wages each pay period capped at $385.34 annually.  PFL can be used consecutively or intermittently.  To the extent applicable employers wish PFL to run concurrent with the Family and Medical Leave Act, handbooks must reflect this.  PFL and disability leave cannot be taken at the same time.  See our prior alert for more detail concerning paid family leave.

Updates to NYC Earned Safe and Sick Time Act (ESSTA)

NYC recently amended the ESSTA, in part, to make the leave consistent with the new NYS sick leave law.  The ESSTA provides leave to covered employees for the care and treatment of themselves or a family member and to seek assistance or take other safety measures if the employee or a family member may be the victim of any act or threat of domestic violence or unwanted sexual contact, stalking, or human trafficking.

Effective January 1, 2021, employers with 100 or more employees must increase paid leave from 40 to 56 hours annually.  Employees accrue one hour of leave for every 30 hours worked.  In addition, employers with fewer than five employees and a net income of $1 million or more must now provide paid leave.  Previously, this leave was unpaid.

In addition, effective September 30, 2020, employers must provide employees the amount of accrued and used leave and the total balance of accrued leave each pay period.  Such notice can be included in the payroll statement or some other writing.  Employers will have until November 30, 2020 to implement this requirement before applicable penalties go into effect.  Significantly, the amendments provide that accrued, unused ESSTA leave can be carried over from year to year for those employers who do not frontload the leave and will be in addition to 40 hours of accrued leave in the new calendar year.  Before, employers could cap the leave at 40 hours per year despite being able to carry over unused leave.  Employees may use the ESSTA leave as it is accrued. 

Also effective September 30, 2020, domestic workers must receive 40 hours of paid ESSTA leave.  Finally, employers who require documentation after an employee takes more than three days of consecutive leave must reimburse workers for that expense. 

NYC Deems COVID-19 a Protected Classification

On May 5, 2020, the New York City Commission on Human Rights (the “Commission”) issued guidance stating that an actual or perceived infection with COVID-19 is a disability under the New York City Human Rights Law (“NYCHRL”).  The Commission further provided that it is unlawful for an employer to harass or discriminate against an employee based on a presumption that a worker contracted, or is more likely to contract, COVID-19 as a result of their race, national origin or other protected status.

Employers have an ongoing duty to provide employees with accommodations for disabilities, including those related to COVID-19, unless doing so poses an undue hardship or the disability presents a direct threat to the workplace.  Under the NYCHRL, employers are required to engage in a cooperative dialogue with an employee when they know (or have reason to know) that the worker may have a medical condition that could require a reasonable accommodation, “even if the employee has not requested a reasonable accommodation.”  This includes disabilities directly related to COVID-19, as well as underlying conditions for which exposure to COVID-19 may pose a particular risk of complication, including pregnancy, cancer, chronic kidney disease, COPD, weakened immune system from solid organ transplant, obesity, and serious heart conditions.

According to the Commission, employers with a “large number of people” may satisfy their obligation to initiate the cooperative dialogue by reminding all staff of their policies regarding reasonable accommodations and the process for applying for an accommodation. 

The DOL Proposes New Independent Contractor Test

On September 25, 2020, the U.S. Department of Labor (the “DOL”) published a Notice of Proposed Rule Making (“Proposed Rule”), seeking to clarify the test to determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (“FLSA”).  The Proposed Rule supposedly streamlines the “economic reality” test, making it easier to identify employees covered by the FLSA while allowing other workers to “pursue the freedom and entrepreneurialism associated with being an independent contractor.” To determine a worker’s status, the revised test focuses on economic dependence. 

The Proposed Rule identifies five non-exhaustive economic reality factors.  Although the Proposed Rule notes that no single factor is dispositive, there are two “core factors” that should be given greater weight when conducting the analysis: (i) the nature and degree of the worker’s control over the work and (ii) the worker’s opportunity for profit or loss.  The three additional factors, which are “less probative and afforded less weight,” are:  (i) the amount of skill required for the work, (ii) the degree of permanence of the working relationship between the potential employer and the worker, and (iii) whether the work is part of an integrated unit of production.  If the two core factors align (i.e., support a particular classification), there is a “substantial likelihood” that the classification is “accurate,” according to the DOL.

Accrual of NYS Sick Leave Law Went Into Effect

As we reported in April 2020, New York employers are required to provide sick leave to their workers starting January 1, 2021.  The leave, however, begins to accrue starting September 30, 2020. 

Employers with four or fewer employees and a net income of less than $1 million dollars in the previous tax year must provide employees with 40 hours or 5 days of unpaid leave in each year.  Employers with four or fewer employees with a net income of more than $1 million dollars in the previous tax year, and employers with between five and 99 employees must provide their workforce with 40 hours of paid sick leave annually.  Employers with 100 or more employees must provide their workforce with 56 hours or 7 days of paid sick leave in each year.  For more information, see our alert  here

OSHA Issues Virus Reporting Rule

On September 30, 2020, OSHA released guidance requiring employers to report in-patient hospitalizations due to COVID-19 to the agency only if the worker contracted the virus at work within 24 hours of the hospitalization. The guidance has been criticized because, according to the Centers for Disease Control and Prevention, COVID-19 symptoms can take days or weeks to manifest and therefore, most (if not all) in-patient hospitalizations would occur well after 24 hours of exposure.  Critics further argue that the requirement essentially removes the obligation for employers to report COVID-19 work-related in-patient hospitalizations. 

The guidance further provides that employers must report COVID-19 deaths if the death occurs within 30 days of exposure to the virus at work.  Critics claim this window is too narrow.  For more information, click here.

NY Court Strikes Down Portion of DOL Revised Joint Employer Rule

In September 2020, a federal trial court struck down a controversial portion of a recently enacted U.S. Department of Labor (DOL) rule that would have made less employers accountable for employee wage and hour violations as joint employers under the Fair Labor Standards Act (FLSA).  State of New York v. Scalia, 2020 WL 5370871 (S.D.N.Y. Sept. 8, 2020).  In doing so, the court held that the Rule was “arbitrary and capricious” because the DOL failed to explain why it departed from prior interpretations, ignored the broad definition of “employ,” and failed to consider the financial impact on workers as a result of the change. 

In March 2020, the DOL issued the revised Rule articulating a four-factor balancing test for determining when one company can be found to be a joint employer depending on the extent of control over the employee.  Examples of such relationships, known as “vertical” joint employment, include staffing companies or subcontractors who contract out employees to perform work for another entity.  The new articulated factors were whether the claimed joint employer: (1) hires or fires the employee, (2) supervises and controls the work schedule and conditions of employment, (3) determines rate and method of payment, and (4) maintains employee records.  Under the new Rule, the joint employer must actually exercise one or more of the four factors (as opposed to just having the ability and means to do so).  Economic dependence on the potential joint employer was no longer relevant to the determination. 

The trial court vacated the Rule’s four-factor test, determining, among other things, that the Final Rule’s requirement that the joint employer must actually exercise one or more of the four factors conflicted with the FLSA and that excluding considerations of economic dependence contradicted established case law and prior DOL guidance.  The court left intact the “horizontal” joint employment relationship whereby one employee is employed by two “sufficiently associated” companies.  The DOL could appeal the decision or revise the Rule.

DOL Updates FMLA Forms

In an effort to clarify and streamline the process for employees requesting leave under the Family and Medical Leave Act (“FMLA”), on July 16, 2020, the United States Department of Labor (“DOL”) unveiled new standard certification and designation forms. 

The revised forms are optional and replace the existing “expired” forms.  The revamped forms are intended to be easier to understand, limit open ended-questions, and reduce the likelihood that an employer will need to seek follow-up information from health care providers. Employers do not submit the forms to the DOL. 

The revised FMLA forms can be found  here along with a  Q&A discussing the applicability of the forms.

Governor Cuomo Vetoed NYS Wage Theft Bill

On January 1, 2020, Governor Andrew M. Cuomo vetoed the employee wage lien bill (referred to by its sponsors and supporters as the “Securing Wages Earned Against Theft” or “SWEAT” bill). As detailed in our previous alert, both the New York State Senate and Assembly passed the bill (S2844B/A486B) in June 2019.   If enacted into law, the bill would have allowed current and former employees to obtain liens on their employers’ personal and real property for alleged wage and hour violations prior to any judicial determinations on the merits (or lack thereof) of the employees’ claims.

In vetoing the bill, Governor Cuomo announced that he supports the bill’s intent but that an overly expansive definition of “employer” and due process concerns precluded his signature. The bill’s legislative sponsors have vowed to resubmit a revised bill that would address the governor’s stated concerns, however, no such revised bill has been submitted at this time.