It’s been a demanding year in New York for employers. New York employers have had to continuously pivot to meet obligations under new laws and requirements in 2022, with no end in sight as we step into 2023. From New York’s new electronic monitoring law, to New York City’s salary and pay range disclosure requirements, to the newly-delayed enforcement of NYC’s automated employment decision tools law (a brief sigh of relief for employers), new laws are certain to make for a busy 2023 for New York employers. Here are 10 changes employers should know now as we get the ball rolling in 2023.
1. NYC Employers Using Automated Employment Decision Tools Now Have Until April 15, 2023 to Meet New Obligations
The New York City Department of Consumer and Worker Protection (DCWP) granted New York City employers a happy holiday by announcing a delay of enforcement of its automated employment decision tools law (Local Law 144 of 2021) until April 15, 2023.
Until the announcement, New York City employers who use artificial intelligence in employment decision-making were faced with new requirements beginning January 1, 2023–including a prohibition against using automated employment decision tools (AEDTs) unless they took a number of specific steps prior to doing so, not the least of which would be conducting a bias audit of their AEDTs.
On December 15, 2022, DCWP published revised proposed rules for Local Law 144, making several changes to initial proposed rules published by DCWP September 23, 2022.
The initial proposed rules defined or clarified some terms (including “independent auditor,” “candidate for employment,” and “AEDT”), set forth the form and requirements of the bias audit, and provided guidance on notice requirements.
After comments from the public on the initial proposed rules, and after a November 4, 2022 public hearing, the DCWP modified the proposed rules, with changes including:
- Modifying the definition of AEDT (according to DCWP, “to ensure it is focused”);
- Clarifying that an “independent auditor” may not be employed or have a financial interest in an employer or employment agency seeking to use or continue to use an AEDT, or in a vendor that developed or distributed the AEDT;
- Revising the required calculation to be performed where an AEDT scores candidates;
- Clarifying that the required “impact ratio” must be calculated separately to compare sex categories, race/ethnicity categories, and intersectional categories;
- Clarifying the types of data that may be used to conduct a bias audit;
- Clarifying that multiple employers using the same AEDT can rely upon the same bias audit as long as they provide historical data (if available) for the independent auditor to consider in such bias audit; and
- Clarifying that an AEDT may not be used if its most recent bias audit is more than one year old.
DCWP will hold a second public hearing on the proposed rules on January 23, 2022.
For more on the law, see our recent blog Happy Holidays! Enforcement of New York City’s Automated Employment Decision Tools Law Delayed to April 15, 2023.
2. New York Employers with “No Fault” Attendance Policies Subject to Penalties for Disciplining Employees Who Take Protected Leave
Beginning February 20, 2023, New York employers with absence control policies who discipline employees for taking protected leave under any federal, state or local law will be subject to penalties.
Signed by Governor Kathy Hochul on November 21, 2022, S1958A (which amends Section 215 of the New York Labor Law (NYLL)) targets employer policies that attempt to control employee absences by assessing points or “demerits” or docking time from a leave bank when an employee is absent, regardless of whether or not the absence is permissible under applicable law. The amendment prohibits employers in New York from taking these actions when employees take a legally protected absence. Though the law does not prohibit attendance policies that include a penalty point system, legally protected absences cannot be used to deduct from these point systems.
Employers are prohibited from retaliating or discriminating against any employee that makes a complaint that the employer violated the law, and violations can come with sizable penalties. In addition to enforcement by the New York State Department of Labor (NYSDOL), NYLL Section 215 provides a private cause of action for current and former employees to recover monetary damages from employers who have violated Section 215. Monetary damages include back pay, liquidated damages and attorneys’ fees in addition to civil penalties that can be issued by NYSDOL of up to $10,000 for the first violation and $20,000 for repeat violations.
- Employers who currently have policies that assess points or demerits against employees for taking absences under applicable law should review and update the policies to be compliant with the law.
- Employers should train HR professionals, managers and supervisors on the new law.
3. Employers Must Provide Pay Ranges in Job Postings under New York City Pay Transparency Law Now–and under New York State Pay Transparency Law Beginning September 17, 2023
New York City employers are already feeling the impact of having to meet the requirements of New York City’s new pay transparency law (Local Law 32 and its amendment), which went into effect on November 1, 2022. Now, employers all across New York State will also have to comply with salary transparency requirements. Governor Hochul signed New York State’s salary transparency bill (S9427A) into law on December 21, 2022. Employers should begin to prepare now for the law’s September 17, 2023 effective date.
New York City’s law requires New York City employers with four or more employees (with at least one working in New York City) to disclose salary and hourly ranges in any advertisements for jobs, promotions, or transfer opportunities. (See our prior blogs here and here–and for a deeper look at salary and pay range disclosure requirements in job postings across the US, watch our video Employers: All Eyes on Salary and Pay Range Disclosure in US Job Postings).
Similar to New York City’s law, New York State’s law also requires employers with four or more employees to include a compensation range in all advertisements for new jobs, promotions and transfer opportunities. It’s not clear at this time whether all four employees must be employed within New York State, or whether an employer is covered even if employees are located elsewhere. The New York Department of Labor (NYDOL) is authorized to promulgate regulations to clarify the law, and it is anticipated that guidance will be issued before the law’s effective date.
Employment agencies and recruiters–but not temporary employment agencies–are also covered by each law.
Salary or hourly range–not open ended–required
Under the New York City law, the salary or hourly range can extend from the lowest to the highest range that the employer in good faith believes it would pay for the advertised job, promotion, or transfer opportunity at the time of the posting. Employers must include both a minimum and a maximum salary/hourly rate for the range – meaning the range cannot be open ended.
Similarly, under the New York State law, the compensation range is the minimum and maximum annual salary or hourly range of compensation for the opportunity that the employer in good faith believes is accurate at the time of the posting. However, unlike New York City’s law, New York State also requires that advertisements for jobs paid solely on commission include a general statement that the position is in fact commission-based.
Applies to opportunities that can or will be performed (in whole or in part) in New York City / New York State
Earlier this year, the New York City Commission on Human Rights (the “Commission”) also published a fact sheet, clarifying that these disclosure requirements apply to any advertisement for a job, promotion, or transfer opportunity that can or will be performed (whether from an office, in the field, or remotely from the employee’s home), in whole or in part, in New York City.
The New York State law also requires employers to disclose the compensation range for all positions that can be performed, at least in part, in New York State–making it likely that the law applies to postings for all remote work that can be done from New York State.
New York State requires a job description–if it exists
New York State’s law requires the job description to be included in the posting if a job description exists for the position. New York City does not have the same requirement.
New York State requires record-keeping
Covered employers under the New York State law are required to maintain records of the history of compensation ranges for each job, promotion or transfer opportunity and the job descriptions for those positions, if they exist.
Violations under New York City’s law v. New York State’s law
New York City
Under the New York City law, applicants or employees can file a complaint with the Commission. Violators can be liable for monetary damages, as well as civil penalties of up to $250,000. If the Commission sends an employer a notice of violation, there is no monetary penalty for the first violation if the employer proves “to the satisfaction of the commission” within 30 days that the violation has been cured. If the Commission determines that an employer has failed to submit proof of a cure the employer may seek a review with the Commission within 15 days of receiving the notice of failure to cure.
The New York City law also expressly provides current employees (but not applicants) with the right to bring private causes of action against their employer based on the employer’s failure to disclose pay ranges.
New York State
Unlike New York City’s law, New York State’s law does not expressly create a private right of action for employees.
It does, however, include an anti-retaliation provision that prohibits an employer from refusing to interview, hire, promote, or employ an applicant or current employee for exercising any right provided by the law.
And the New York State law does not expressly provide for a right to cure the first violation like the New York City law. Violations are subject to investigation and prosecution by the New York State Commissioner of Labor, with civil penalties not to exceed $1,000 for the first violation, $2,000 for the second violation and $3,000 for the third and subsequent violations.
Implications for immigration filings
Certain temporary visas and permanent-residence sponsorship processes require posting wage information relating to the foreign worker’s position. For example, the H-1B, E-3, and H-1B1 work visas require an internal posting of the Labor Condition Application (LCA), available to all existing employees at the worksite, which lists both (i) the foreign worker’s range or a wage range, and (ii) the “prevailing” (i.e. minimum) wage for the occupation and location as determined by US Department of Labor (DOL). While this type of posting is not an advertisement and therefore should not fall within the scope of the New York City or New York State laws, it will be important for employers to ensure that LCA postings and job postings are aligned to avoid potential claims of discrimination from existing workers.
Perhaps more importantly, the PERM process for permanent-residence-sponsorship requires both (i) an internal job advertisement requirement, and (ii) external job posting requirements. As a prerequisite to “recruitment” for a PERM application, the employer must first obtain a prevailing wage determination issued by the DOL. Under the relevant DOL regulations, this salary threshold serves as the minimum wage permitted for the permanent-residence sponsorship of the foreign worker. During recruitment, all forms of advertisement which list a wage range must be sure that the range does not fall below the figure from DOL’s prevailing wage determination. On the contrary, if the DOL’s prevailing wage figure exceeds the company’s normal salary range for a particular position, the advertisement for the PERM recruitment must expand to include the DOL threshold. Therefore, employers must ensure that wage ranges used for PERM recruitment align with its company standards but do not fall beneath the DOL’s prevailing wage determination.
Covered New York City employers should:
- Ensure that any job advertisements for positions that were posted prior to November 1, 2022 that remain unfilled are updated to disclose the necessary pay ranges; and
- Keep a record of job postings, wage records, and anything else that they may need to submit to the Commission if they ever need to establish “proof of a cure.”
Employers who are covered by the New York State law should keep an eye out for guidance on the law from the NYDOL. Employers should also prepare for the law’s September 17, 2023 effective date by:
- Determining and implementing best practices for choosing pay ranges for posting;
- Determining which positions have a job description that would need to be included in the posting;
- Training HR, managers and supervisors on the new law; and
- Planning how to communicate any changes to the workforce.
4. New York Paid Family Leave Law Expanded to Include Siblings
The list of family members under the New York Paid Family Leave (NYPFLL) will include siblings with serious health conditions starting January 1, 2023. Under New York’s amendment to the NYPFLL (S.2928-A/A.06098-A), “siblings” is defined as an employee’s biological, adopted, step, and half-sibling(s)–regardless of whether they live outside of New York State, or even outside of the country. This expansion is in addition to the currently covered spouse, domestic partner, child, parent, parent-in-law, grandparent or grandchild with a serious health condition.
Increase to maximum weekly benefits in 2023
In addition, there will also be an increase to the maximum weekly benefits an employee is eligible to receive beginning January 1, 2023. For 2022, employees taking Paid Family Leave received 67% of their average weekly wage, up to a cap of 67% of the current New York State Average Weekly Wage (NYSAWW). For 2023, the NYSAWW will be $1,688.19, which means the maximum weekly benefit is $1,131.08, an increase of $62.72 over the maximum weekly benefit for 2022.
- Employers should update their NYPFLL policies and practices and train employees on the new law in advance of the amendment’s effective date.
5. New York Extends Paid Leave for COVID-19 Vaccinations
Private (and public) employers will need to continue to provide paid leave for COVID-19 vaccinations. On June 28, 2022, Governor Hochul signed A9513, extending public and private employees’ ability to receive paid time off for COVID vaccinations. In its original version, signed by then–Governor Andrew M. Cuomo in March 2021, the law had an automatic end date of December 31, 2022. The new law extends this date for one year to December 31, 2023. The law requires New York employers to provide employees with “a sufficient period of time, not to exceed four hours” of paid leave per dose (including boosters) to be vaccinated for COVID-19. Leave must be paid at the employee’s regular rate of pay and cannot be charged against leave accruals otherwise already available to the employee.
- Employers who haven’t already done so should immediately update leave policies to ensure compliance.
- Train HR professionals, managers and supervisors on new leave entitlements.
- Coordinate responses to employees seeking vaccination leave.
6. Employers Should Check Obligations Under New York’s Electronic Monitoring Law
This year saw private sector New York employers facing new disclosure requirements for electronic monitoring of employees under amendments to Civil Rights Chapter 6, Article 5, Section 52-C*2. (See our prior blog, here).
Effective May 7, 2022, New York employers are required to:
- Provide prior written notice to all employees subject to electronic monitoring (including, but not limited to, any and all telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage by an employee by any electronic device or system) upon hiring;
- Obtain an acknowledgment from employees that they have received the required notice; and
- Post a notice of electronic monitoring “in a conspicuous place which is readily available for viewing” by employees that are subject to monitoring.
- Employers who haven’t already should update policies and procedures to ensure that all new hires receive the required notice and provide the necessary acknowledgment, and that the posting requirement is met. Employers who haven’t should also update any acceptable use and electronic communication policies to reflect the new law.
- While the law specifically applies to new hires, employers should follow these steps for current employees subject to electronic monitoring, working with internal data privacy teams where applicable to ensure all employees subject to monitoring are included in the process.
- Because employee monitoring systems typically also apply for in-person jobs, employers should be mindful to ensure that in-person employees are also provided with the requisite monitoring notices and to the extent in-person operations have significantly changed, ensure that the notice posting is still maintained in a noticeable area.
7. Federal Court Rules That Remote Workers Outside of New York State or City Must Feel Harm in the State or the City to be Protected by New York State or City Humans Rights Laws
The United State District Court for the Southern District of New York issued an opinion leaving employees who work outside of New York City or New York State in the cold when it comes to coverage by the New York City Human Rights Law (NYCHRL) and the New York State Human Rights Law (NYSHRL). On April 20, 2022, the Court issued an opinion in Shiber v. Centerview Partners finding that an employee has to “feel harm” in the City or the State to be protected by the NYCHRL or the NYSHRL–meaning some remote workers will not be covered by the laws.
In Shiber, the plaintiff was a former employee of Centerview, an investment bank and advisory firm with offices in New York City. When the plaintiff began working for Centerview in June 2020, its New York offices were closed because of the COVID-19 pandemic. Accordingly, the plaintiff was allowed to work remotely from her home in New Jersey. The plaintiff understood her remote work to be temporary and expected to work in person from Centerview’s New York City offices once those offices reopened.
During her employment, the plaintiff began to struggle with the long hours she was expected to work. The plaintiff claimed that she had a disability that required her to sleep at least 8-9 hours each night, and that her work hours made it impossible to get the sleep she needed. As a result, the plaintiff requested a reduced work schedule as an accommodation. Although Centerview granted the plaintiff’s requested accommodation, it terminated her employment shortly thereafter on the grounds that the plaintiff’s alleged disability prevented her from performing the essential functions of the job. Importantly, the plaintiff was terminated before Centerview’s New York offices reopened, so the plaintiff worked remotely, in New Jersey, throughout her entire employment with Centerview.
The plaintiff sued Centerview in the Southern District of New York, alleging disability discrimination under the NYCHRL and the NYSHRL. Centerview moved to dismiss the complaint for lack of subject matter jurisdiction. The court granted Centerview’s motion to dismiss the plaintiff’s NYCHRL and NYSHRL claims on the grounds that the alleged discriminatory conduct had no impact in New York City or New York State. The court explained that for an employee to bring claims under the NYCHRL and NYSHRL, the alleged discriminatory employment action must be felt by the plaintiff in New York City or New York State. So even though the alleged discrimination may have originated from New York, because the plaintiff worked remotely throughout her entire employment, the plaintiff could not prove that she felt any injury in New York City or New York State.
Further, the Shiber court rejected the plaintiff’s argument that she felt harm in New York because, had she not been fired, she at some point might have been able to work in New York City. The court held that the plaintiff’s hope that she would someday work in New York when Centerview’s offices reopened was too speculative to support a finding that she felt any injury in New York City or New York State.
- Under Shiber, employees who do not feel an impact in New York City or New York State cannot successfully bring claims under the NYCHRL and NYSHRL. When faced with a claim of discrimination under NYCHRL and NYSHRL, employers should engage in an early assessment of whether they can move to dismiss when those claims are brought by remote employees that have never physically reported to work in New York City or New York State.
8. Employers Should Prepare for the Possibility of Revived Claims under the New York Adult Survivors Act
On May 24, 2022, Governor Hochul signed the Adult Survivors Act, S66A (the ASA) into law. The ASA amends New York’s Civil Practice Law and Rules (CPLR) to provide a one-year “lookback window” to allow adults who were 18 years old or older when certain sexual offenses were committed against them to file civil claims that would otherwise be time-barred by the New York statute of limitations. The sexual offenses covered are those defined in Article 130 of the New York Penal Law. The one-year lookback window began on November 24, 2022 and closes on November 23, 2023.
Under the ASA, survivors of sexual offenses can bring claims against individual offenders, as well as related claims against companies or institutions that may have employed or otherwise been connected to those alleged offenders–opening the door for claims against employers such as negligent hiring and supervision and infliction of emotional distress. Given that the alleged behavior underlying the claims may have originated decades ago, employers who are aware of prior complaints that could materialize into civil lawsuits during the lookback window should consult with counsel.
- Employers who are aware of previously time-barred claims that could be renewed under the ASA should consult with counsel now in preparation for possible claims to be filed during the lookback window.
9. New York Employers Prohibited from Releasing Personnel Files in Retaliation for Certain Actions
New York employers now need to be even more careful with employees’ personnel files in light of AB A7101, which took effect March 16, 2022. AB A7101 amended the NYSHRL to explicitly prohibit employers from releasing an employee’s personnel file in retaliation for opposing discriminatory practices, filing a complaint, or testifying or assisting in a proceeding. The law is aimed at preventing employers from leaking personnel files with the intent to disparage or discredit a victim or witness of discrimination.
The amendment expands the definition of retaliation to include disclosing an employee’s personnel file because:
- he or she has opposed any practices forbidden under the NYSHRL; or
- he or she has filed a complaint, testified or assisted in any proceeding under the NYSHRL (except where such disclosure is made in the course of commencing or responding to a complaint in any proceeding under the NYSHRL, any other civil or criminal action, or other judicial or administrative proceeding as permitted by applicable law).
In addition to the private right of action employees have under the NYSHRL, aggrieved parties can file a complaint with the New York State Attorney General, who has authority to commence a proceeding if, on information and belief, an employer has violated the law or is about to violate the law.
- Review and revise policies with respect to retaliation as necessary.
- Train HR, supervisors and managers on the new law to ensure compliance.
- Have processes in place that methodically govern the release of personnel files.
10. Non-Competes: Recent Updates and Where Things Stand
Across the US, new limits on post-employment non-competes are becoming law. Employers across the US–in New York and elsewhere–should take heed that several state legislatures have enacted laws governing the use of restrictive covenants or are in the process of attempting to pass legislation that does just that. (See our prior blog here).
Non-competes in New York
New York employers should be mindful that in New York, a non-compete is only allowed and enforceable to the extent it (1) is necessary to protect the employer’s legitimate interests, (2) does not impose an undue hardship on the employee, (3) does not harm the public, and (4) is reasonable in time period and geographic scope. An employer’s legitimate interest may include protecting an employer’s trade secrets and confidential information and preventing employees from taking specialized skills they gained on the job to a competitor. Critically, the restrictions must be no greater than necessary to protect the legitimate interests of the employer.
Recent case law has held fast to these requirements. For instance, in a recent Supreme Court of New York decision, the Court denied a motion for an injunction that sought to preclude an employee from working at a competitor despite the existence of a restrictive covenant because enjoining the employee from working at the competitor was broader than necessary to protect the employer’s legitimate business interests. Mission Capital LLC v. Javich, No. 650576/2022, 2022 NY Slip Op 31162(U) (April 5, 2022).
Washington, DC’s New Non-compete Law
Employers should also stay on top of other, newer non-compete laws, including Washington, DC’s new non-compete law–which was originally set to drastically limit the use of non-competes. While Washington DC’s recent Non-Compete Clarification Emergency Amendment Act of 2022 scaled back the previously passed Ban on Non-Compete Agreements Amendment Act of 2020 (together, “DC’s Non-Compete Law”), the law, which took effect October 1, 2022, still places limits on employers seeking to enter into non-competes in Washington, DC.
Under the law, no covered employer may require or request that a covered employee sign an agreement or comply with a workplace policy that includes a non-compete provision.
However, (1) highly compensated employees, (2) casual babysitters in or about the residence of the employer, (3) partners in a partnership, and (4) DC and federal government employees are excluded from the non-compete ban, and therefore can still be bound by non-competition provisions. In addition, there are several exclusions from the definition of non-compete (meaning they are not banned by the law), including:
- Non-competition provisions in the sale of business context;
- Non-disclosure or confidentiality provisions that prohibit or restrict an employee from disclosing, using, selling or accessing the employer’s confidential or proprietary employer information; and
- Certain anti-moonlighting provisions and provisions that provide a long-term incentive (including bonuses, equity compensation, stock options, restricted and unrestricted stock shares or units).
If employers do enter into non-compete agreements with highly compensated employees, the non-compete agreements must specify:
- The functional scope of the competitive restriction, including services, roles, industry, or competing entities the employee is restricted from performing work in or on behalf of,
- The geographical limits, and
- The term (which cannot exceed 730 calendar days for medical specialists and 365 calendar days for all other highly compensated employees).
And employers must provide highly compensated employees with a written copy of the non-competition provision at least 14 days before the individual starts employment (or if the individual is already employed by the employer, at least 14 days before the individual is required to sign the agreement), as well as provide the employee with a statutory notice.
- Employers should stay on top of developing restrictive covenant legal authority in New York and other locations where they have employees, taking practical steps to ensure compliance such as reviewing any existing “form” employee agreements containing restrictive covenants and assessing whether they comply with legal requirements in the jurisdiction where their employees are located.
A couple more to note…
New York employers must meet lactation accommodation law requirements beginning June 7, 2023
New York’s lactation accommodation law (SB 4844B) was signed by Governor Hochul on December 9, 2022. Scheduled to take effect on June 7, 2023, the law amends New York’s Labor Law section 206-c to require employers to designate a room or location to allow employees to pump breast milk.
Specifically, the law requires that the designated pumping location be: (1) in close proximity to the work area; (2) well lit; (3) shielded from view; and (4) free from intrusion from other persons in the workplace or public. The designated location must also include: (i) a chair, (ii) a small table, (iii) nearby access to running water, and (iv) an electrical outlet, if the workplace is supplied with electricity. An employer can qualify for an exemption if the employer can demonstrate undue hardship based on the size, financial resources, and nature of its business.
The New York Department of Labor (NYDOL) is required to develop a model written policy regarding the rights of nursing mothers to express breast milk at work before the law’s effective date, which employers will be required to adopt and distribute to (1) all employees upon hire, (2) employees returning to work following the birth of a child, and (3) annually to all current employees.
More on electronics: New York employers required to provide notices electronically
On December 16, 2022, New York Governor Kathy Hochul signed S6805 into law, amending New York Labor Law Section 201 to mandate that when employers are required to physically post notices under federal and state law or regulation at a worksite, that they also make them available electronically through the employer’s website or by e-mail. The change took effect immediately. Now, in addition to physically posting notices “in a conspicuous place” on each floor of its premises, as previously required by New York Labor Law Section 201, employers must also either: (i) e-mail employees an electronic copy of the notices; or (ii) post an electronic copy of the notices on the employer’s website. Employers must also inform employees that the notices are available electronically.
Apply our Annual New York Employer Update Takeaways Checklist: Going into 2023 to help your organization’s leadership prepare for some of the most important employment law developments in 2023. Stay tuned for more developments for New York employers as 2023 proceeds, and contact a Baker McKenzie employment attorney for all of your employment needs.