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New York never rests–especially for employers–and 2023 was no exception. In 2023, New York employers were required to continuously pivot to meet new obligations and adhere to new limitations under freshly-enacted laws, and to closely follow landmark legislation that would significantly impact the workplace if signed. At the top of the list: S3100, a bill that would have banned employers’ use of employee noncompetes if signed (but employers can now breathe a sigh of relief, because Governor Hochul recently vetoed the bill). 2024 promises to continue to be dynamic for New York employers.

Here are ten of the most important changes New York employers need to know right now as we step into 2024–as well as what’s coming down the pike, a couple of important changes you may have missed, and what we’re keeping an eye on as we step into the new year.  

What you need to know right now

1. New York’s bill restricting noncompetes vetoed by Governor Hochul

On December 22, 2023 Governor Hochul vetoed S3100, which would have been the most restrictive state-level ban on employers’ use of noncompetes to date if it had been signed into law. Passed by the New York State Assembly in June 2023, S3100 provided that every contract restraining anyone from engaging in a lawful profession, trade or business of any kind is void to the extent of the restraint; allowed a private right of action for employees; and did not have an explicit “sale of business” exception (for more details on the now-vetoed legislation, see our prior blog here.)

The bill faced opposition by Wall Street and other industries that heavily rely on noncompetes, and business groups pushed for amendments to the bill (which the governor had until the end of 2023 to sign or veto). In late November, Governor Hochul reportedly stated she was in favor of striking a balance that would protect lower- and middle-income workers (up to $250,000) but allow noncompetes for those at higher income levels who are better equipped to negotiate on their own to do so. Reports are that Governor Hochul recently tried to negotiate amendments to the bill in this respect, but that negotiations broke down.

Employer takeaway:

  • We expect this issue to make an appearance in New York’s next legislative session. Employers should keep an eye out for the introduction of new bills to restrict noncompetes and follow their progress. Now that Governor Hochul has expressed favor for an income threshold to ban noncompetes, legislators may be more likely to craft a bill that will more easily be signed into law.

Continue Reading New York Employer “Top Ten” (and more): What to Know Heading into 2024

We’re not even out of 2023, and New York employers who engage independent contractors already have new obligations to reckon with before next spring. On November 22, 2023, New York Governor Kathy Hochul signed the New York State “Freelance Isn’t Free Act”, increasing obligations for parties who engage freelance workers (including independent contractors). Starting May 20, 2024, hiring parties (including employers who engage independent contractors) must provide freelance workers with written contracts, pay them within a specified time period, maintain records, and satisfy additional new obligations—and freelance workers will gain a private right of action for violations.

The Act replicates the 2017 NYC’s Freelance Isn’t Free Law, adding administrative oversight and support from the New York State Department of Labor and the New York State Attorney General while maintaining New York City’s local law. The Act will apply to contracts entered into on or after the May 20, 2024 effective date.

Here are some key details:

Definitions: “freelance workers” and “hiring parties” 

The Act defines a “freelance worker” as “any natural person or organization composed of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services in exchange for an amount equal to or greater than eight hundred dollars”—but does not include certain sales representatives, practicing attorneys, licensed medical professionals, and construction contractors. Also, a “hiring party” is any person (other than government entities) who retains a freelance worker to provide any service.

Written contracts required

The Act requires a written contract if the freelance work is worth at least $800, inclusive of multiple projects over a 120-day period. The hiring party must furnish a copy of the contract, either physically or electronically. At a minimum, the written contract must include:

  1. The name and the mailing address of both the hiring party and the freelance worker;
  2. An itemization of all services to be provided by the freelance worker, the value of the services to be provided under the contract, and the rate and method of compensation;
  3. The date on which the hiring party must pay the contracted compensation (or the mechanism by which the date will be determined); and
  4. The date by which a freelance worker must submit to the hiring party a list of services rendered under the contract to meet the hiring party’s internal processing deadlines to allow compensation to be paid by the agreed-upon date.

The New York State Department of Labor will provide model contracts on its website for freelancers and hiring parties to use.Continue Reading More Scrutiny and Obligations for NY Businesses Engaging Independent Contractors Coming Spring 2024

Special thanks to our Baker McKenzie speakers Pamela Church, Teisha Johnson, Cyrus Vance, Elizabeth Roper, Laura Estrada Vasquez, Joshua Wolkoff and Industry Experts, Alexandra Lopez, Privacy Counsel, Calix, Una Kang, VP and Associate General Counsel, Wolters Kluwer, and Pamela Weinstock, Managing Counsel, Intellectual Property, Tiffany & Co.…

Heads up, New York employers. New York recently expanded its #MeToo statute to bar some of the most common terms for which employers bargain in settlement agreements involving claims of discrimination, harassment or retaliation. On November 17, 2023, Governor Hochul signed S4516 into law, amending Section 5-336 of the General Obligations Law (“GOL”) (New York’s…

Effective September 17, employers with four or more employees in New York state must include a compensation range in all advertisements for new jobs, promotions and transfer opportunities. A pay transparency fact sheet and FAQ document are available on the NYSDOL website with additional information and guidance on the new law. 

Overlap and City

…

New York may soon restrict employers and employment agencies from using fully-automated decision making tools to screen job candidates or make other employment decisions that impact the compensation, benefits, work schedule, performance evaluations, or other terms of employment of employees or independent contractors. Draft Senate Bill 7623, introduced August 4, aims to limit the use of such tools and requires human oversight of certain final decisions regarding hiring, promotion, termination, disciplinary, or compensation decisions. Senate Bill 7623 also significantly regulates the use of certain workplace monitoring technologies, going beyond the notice requirements for workplace monitoring operative in New York since May 2022 and introducing data minimization and proportionality requirements that are becoming increasingly common in US state privacy laws.

While there is not yet a federal law focused on AI (the Biden administration and federal agencies have issued guidance documents on AI use and are actively studying the issue), a number of cities and states have introduced bills or resolutions relating to AI in the workplace. These state and local efforts are all at different stages of the legislative process, with some paving the path for others. For example, New York City’s Local Law 144 took effect on July 5, prohibiting employers and employment agencies from using certain automated employment decision tools unless the tools have undergone a bias audit within one year of the use of the tools, information about the bias audit is publicly available, and certain notices have been provided to employees or job candidates (read more here).

If enacted, Senate Bill 7623 would take things much further. Here are some of the most significant implications of the draft legislation:Continue Reading Check Yourself Before You Wreck Yourself: New York and Other States Have Big Plans For Employer Use of AI and Other Workplace Monitoring Tools

New York in the summer: warm days, Shakespeare in the Park, visits to the beach, and the end of the New York State legislative session–which often means a few surprises for New York employers. This summer, not only do employers have to contend with New York’s amended WARN Act regulations and the enforcement of New York City’s Automated Employment Decision Tool law (both now effective), they also have to keep a close eye on four New York State bills that have cleared both houses of the state legislature and could be signed by Governor Hochul–including one that would arguably be the nation’s broadest ban on employee noncompete agreements. We highlight two changes–and four that could be coming down the pike–New York employers should pay close attention to this summer.

Two to know

1. Amendments to New York’s WARN Act regulations now in effect.

New York State’s proposed amendments to its Worker Adjustment and Retraining Notification (WARN) Act regulations were adopted on June 21 and are now in effect. The definition of a covered employer has been expanded, remote employees must now be included in the threshold count, certain notices must include more information or be provided electronically, and exceptions for providing notice have changed (among other modifications). In addition, there’s a new York State Department of Labor WARN portal for employers to use for “a more streamlined user experience.” Want the details on the WARN Act regulation changes and some helpful tips for employers? See our prior blog here.

2. Enforcement of New York City’s Automated Employment Decision Tool law began July 5.

New York City’s Local Law 144 prohibits employers and employment agencies from using an automated employment decision tool to substantially assist certain employment decisions unless the tool has been subject to a bias audit within one year of the use of the tool, information about the bias audit is publicly available, and certain notices have been provided to employees or job candidates. Violations of the provisions of the law are subject to a civil penalty. Enforcement of the law began July 5, and employers need to be diligent. For those who haven’t done so yet, the first (and immediate) step is to take inventory of HR tech tools. Legal should partner with HR and IT to determine whether the company uses automated employment decision tools to make any employment decisions in a manner that triggers the law. See our prior blog here for additional steps to take, as well as further details on the law, penalties, and some practical tips for employers.

Four to watch

1. New York could become the fifth state to ban employee noncompetes.

On June 21, the New York State Assembly passed S3100 (already passed by the New York State Senate), which will be the most restrictive state-level ban on employers’ use of noncompetes to date if signed into law by Governor Hochul.

Under the bill, every contract that restrains anyone from engaging in a lawful profession, trade or business of any kind is void to the extent of such restraint.

The ban: The bill does not permit employers (or their agents) to “seek, require, demand, or accept a non-compete agreement” from a “covered individual.”

  • A “non-compete agreement” is any agreement (or clause in an agreement) between an employer and a “covered individual” that prohibits or restricts the individual from obtaining employment after the conclusion of employment with the employer. 
  • A “covered individual” is “any other person” who performs work or services for another person on such terms and conditions that puts them in a position of economic dependence on and under an obligation to perform duties for that other person–regardless of whether they are employed under a contract of employment.

Continue Reading New York Employer Summer Roundup: Two to Know and Four to Watch

Special thanks to co-authors Cynthia Cole, Heiko Burow, Inez Asante and Alysha Preston.

In June, New York Senate Bill S5640 unanimously passed both houses of the NY legislature. It seeks to enact restrictions on invention assignment agreements used in the employment. S5640 now moves to the desk of Governor Kathy Hochul and if signed into law, it will amend the New York Labor Law effective immediately.Continue Reading Creating IP in New York? Watch out! Your employee may soon own more than you think

The Road Ahead Following the April 10 End of the National Emergency

We have all grown accustomed to hand sanitizer, 6-feet distance markings in hallways, face masks–and the back and forth of surging and waning COVID-19 levels in the workplace and the community. But with President Biden’s April 10 termination of the COVID-19 national emergency, can these pandemic mainstays–and employers’ pandemic policies and procedures–finally be relegated to a distant memory? Should they be? As Dr. Anthony Fauci said in a recent interview, “Everybody wants this outbreak behind us.”

Mapping the Road Forward

With little fanfare, on April 10, President Biden quietly signed a GOP-led resolution terminating the COVID-19 national emergency. Separately, on May 1 the Biden Administration announced an end to the federal COVID-19 vaccination requirements for federal employees, federal contractors, and international travelers on May 11, the same day the COVID-19 Public Health Emergency ends. The US Department of Health and Human Services and the US Department of Homeland Security also announced they will start the process to end vaccination requirements for Head Start educators, CMS-certified healthcare facilities, and certain noncitizens at the land border.

So can employers throw out all of their COVID-19 policies and procedures? Not quite.Continue Reading Can US Employers Finally Leave COVID-19 in the Rearview Mirror?

An updated New York State Sexual Harassment Prevention Model Policy (the “Model Policy”) is out. On April 11, 2023, Governor Kathy Hochul announced that the New York State Department of Labor (“NYSDOL”) finalized updates to the Model Policy, a template document New York State provides to help employers comply with state law. The updated guidance (the result of a collaboration between the NYSDOL and the New York State Division of Human Rights), addresses, among other topics, remote workers, gender discrimination, and retaliation–and provides a new interactive training video, a slide deck and other resources to help employers (and employees) comply with the State’s mandatory training requirements.

Though New York State employers aren’t required to use to the Model Policy (see more below), they may want to review their sexual harassment prevention policies and training in light of the updates and work with counsel to ensure their policies and training are still in compliance.Continue Reading New York State Updates Its Model Sexual Harassment Prevention Policy: Is Yours Still in Compliance?