SPRING 2014 Takeaways

Transcription

1 SPRING 2014 LEGAL EMPLOYMENT INFORMATION YOU CAN APPLY TO YOUR BUSINESS TAKEAWAYS provides highlights of the most significant New York, New Jersey and Connecticut legal developments from the past quarter, together with action items for your business. These include detailed review of NYC s amended sick leave law and the new Newark law, plus new wage and discrimination protections at the federal and state levels. Levy Employment Law, LLC helps businesses identify and resolve workplace issues before they result in litigation. We leverage HR best practices to mitigate risk for employers by: designing and building Human Resources policies with supporting systems, training HR staff, line managers and employees, troubleshooting workplace concerns, and defending charges filed with the EEOC and state and local administrative agencies. Table of Contents Legislative Developments... 1, 3-4 Life s Lessons... 2 Court Watch... 5 Compliance Checklist... 5 This newsletter is provided for informational purposes only to highlight recent legal developments. It does not comprehensively discuss the subjects referenced, and it is not intended and should not be construed as legal advice or rendering a legal opinion. TAKEAWAYS may be considered attorney advertising in some jurisdictions. PAID SICK LEAVE DRAMATICALLY EXPANDS IN THE TRI-STATE AREA NYC Law Will Cover Most Small Businesses Newly adopted amendments that extend paid sick leave to businesses with five plus NYC employees require that policies be adopted or amended by the April 1 effective date.(see pg. 3) Newark Joins in With Paid Sick Leave Mandate Newark employees can accrue up to 40 hours of paid leave benefits annually (one hour for every 30 worked) under a new sick leave law that is effective May 29, While quite similar to the recently adopted Jersey City law, Newark s law is unique in that it covers all private sector employees other than unionized construction workers, but caps the maximum annual accrual of paid leave benefits at 24 hours for employers with fewer than 10 employees, except child care, home health care, and food service workers (each of whom can accrue up to 40 hours of sick leave annually). NEW YORK AND NEW JERSEY ENHANCE WAGE AND PREGNANCY RIGHTS New York Presumes Commercial Drivers Are Employees Businesses that retain drivers with commercial licenses as independent contractors to transport goods in New York State must reassess whether those drivers are more appropriately classified as employees under a new law. (see pg. 4) New Jersey Requires Accommodation for Pregnancy and Childbirth, Expressly Prohibits Discrimination Following closely on the heels of an amendment to the New York City Human Rights Law, New Jersey amended its Law Against Discrimination (LAD), effective January 21, 2014, to expressly protect pregnant employees and new mothers. (see pg. 4) New Jersey Protects Compensation Inquiries A new LAD amendment prohibits employers from taking any retaliatory action against an employee for requesting certain information from a current or former employee. (see pg. 4) Following closely on the heels of an amendment to the New York Tel: City Fax:

2 SPRING 2014 TAKEAWAYS 2 LIFE S LESSONS* Real Issues Reconstituted Facts By Tracey I. Levy The hiring season is commencing for college and high school students, who are eager to build their resumes with practical work experience. But must students be paid for these work experiences, and at what rate? Does it matter if their school provides them with academic credit? Let s consider Midsize Company, where three managers wish to retain students as summer interns. 4. It must provide the business with no immediate advantage, and it may even impede the business operations; 5. It must not include a job guarantee at the conclusion of the internship; and 6. The intern must understand that he/she is not entitled to wages for the time spent in the internship. New York and New Jersey add further criteria, which center around clear notice of the terms of the program, a distinct admissions process, and generalized training that is not distinct to the employer. Harold wants to offer five summer internships, with a stipend of $1000 each. The interns would help alleviate the department s data entry backlog, under the guidance of the full-time staff. They would attend guest lectures from employees in other departments and would have a one-day shadowing opportunity with a member of Harold s management team. Bari wants to offer one student from her alma mater an unpaid summer internship. This intern would shadow Bari and members of her team on a rotational basis. Bari has also scheduled her peers in other functions to speak with the intern about their respective roles. The student would receive college credit, provided he/she completes a research project, and Bari has written a hypothetical fact pattern that she will have the student independently research over the course of the summer. Salina seeks to place her son and his friend in a summer internship to satisfy a practicum requirement for high school seniors. Salina is flexible as to how the company will use their services and whether they will be paid, but the high school requires them to write a paper. Under federal law, to be classified as an internship, the work experience must meet the following six factors: 1. It must offer training similar to that which would be provided in an educational environment; 2. It must be primarily for the benefit of the intern; 3. It must not displace regular employees, and must be closely supervised by existing staff; Harold can proceed with his internship program only if he increases his budget to at least pay minimum wage. Most fatal to Harold s proposal is that the program would provide a direct benefit to Midsize Company, as the interns would be performing the actual work of regular employees. The guest speaker lunches and shadowing opportunities are wonderful, but they do not cure the overall program, nor does the fact that a participating student may receive academic credit from his or her college. Bari s internship program potentially satisfies the federal test. For clarity, Bari should detail, in writing, the terms of the internship (and that it is unpaid), tasks to be observed and performed, resources that will be made available, and the skills that the intern will gain. Salina s proposal is too vague. Salina needs to structure a program similar to that proposed by Bari, including a plan for the teens to satisfy the high school s research paper requirement. Alternatively, Midsize Company could hire the teens at minimum wage and then assign them as appropriate to their skillset. If they are in New York, their compensation could be modestly offset by that state s internship tax credit (see box, pg. 4), but the work experience might not meet the high school s practicum requirement. * In my years of legal practice, there are certain recurring issues that cross a range of industries and circumstances. This column presents a hypothetical factual situation as a vehicle to substantively review these recurring legal and employee relations issues.

3 SPRING 2014 TAKEAWAYS 3 New Administration Greatly Expands NYC Sick Leave, on Short Notice to Small Businesses and Manufacturers The New York City Council passed sweeping amendments to the Earned Sick Time Act ( ESTA ), scheduled to take effect April 1, 2014, that exponentially increase the scope of the paid leave mandate to cover all businesses with five or more employees in the city. Gone from this new version of the law is a phase-in process for smaller employers, as well as an exemption for manufacturers. Rather, these formerly exempted businesses must adopt or amend policies to assure that employees who work a cumulative total of 80 or more hours per year will receive paid time off, earned at a rate of one hour for every 30 hours worked, to be used for one of three reasons: Their own illness, injury, or need for treatment or preventive medical care; Care of a family member, now defined to include a child, spouse, domestic partner, parent, grandparent, grandchild or sibling, who needs medical treatment or preventive care; or A public health emergency that closes the employee s workplace or a family member s childcare center. Existing paid leave policies suffice only if they can be used for ESTA reasons; do not forget to extend coverage to parttimers and temps. Employers that fall below the five-employee threshold must provide unpaid leave, accrued at the same rate, for the above purposes. The ESTA retains a delayed effective date, until the end of the current contract, for parties to a union collective bargaining agreement. Mandatory Notice and Posting Under recent amendments, all NYC employers are now mandated to provide employees with written notice of their rights under the ESTA by May 1, 2014 and thereafter to all new hires. Notice must also be posted in the workplace (previously the posting was optional). The law s enforcement provisions have also been notably revised. While formerly remitted to the Department of Consumer Affairs, the mayor now may charge a different city agency with enforcement. That agency has been vested with independent authority to investigate violations, even if no one has complained. Employees also have a much longer period of time (two years, extended from nine months), in which they can file a complaint for an alleged violation. As a modest reprieve for employers, the amendments waive the civil penalty for a first violation of the law prior to October 1, 2014 by smaller businesses (under 20 employees) and manufacturers who were formerly exempt from the paid leave mandate. Repeat violations prior to October 1 may serve as a predicate for imposing penalties for any violation subsequent to that date. For their own protection and to comply with a broadened legal mandate, employers need to retain records for three years to demonstrate their compliance with the law.

4 SPRING 2014 TAKEAWAYS 4 NLRB Withdraws Posting Rule Private sector employers have been granted a complete respite from the NLRB s previously announced rule requiring them to post in their workplaces a notice of employees rights under the National Labor Relations Act. The Board announced in January that it would not seek Supreme Court review of two U.S. Court of Appeals decisions that had invalidated the rule. NJ Amends Anti-Discrimination Law Pregnancy separately protected: Recent amendments to the LAD prohibit disparate treatment based on pregnancy and require that employers provide reasonable accommodations to employees, based on the needs of their pregnancy, delivery, or recovery from childbirth. Employers may be required to provide pregnant employees with water, bathroom or rest breaks, leave for medical appointments, assistance with manual labor, job restructuring or modified work schedules, or temporary transfers to less strenuous or hazardous work as a reasonable accommodation. In addition, post-delivery, an employer may be required to provide an employee with a leave of absence to recover from childbirth as a reasonable accommodation. She would need to support her accommodation request with medical documentation. Although a requested accommodation need not be provided if it would impose an undue hardship, that standard is fact-specific and not easily met. Considerations include the nature of the accommodation sought relative to the size and budget of the business, the nature of the business operations, and the extent to which the accommodation would involve an essential job requirement as opposed to a tangential requirement. Fact-gathering on compensation protected: Employees are now protected under the LAD when they request information regarding job title, occupational category, compensation and benefits, or demographic data for purposes of investigating possible discrimination in compensation or benefits. Employees who are asked to provide this personal information are not required to respond to the requesting employee. NYS Offers Tax Benefit for Paying Interns New York State has adopted a minimum wage reimbursement credit, under which employers receive a tax credit for each hour worked by an eligible employee who is paid the minimum wage. For 2014, the tax credit is $.75 for each hour of paid work, and the tax law defines eligible employees as students, ages 16-19, who are currently enrolled at an educational institution. Although refundable, the credit cannot reduce taxes below the minimum tax for the applicable business, as provided in the state tax code. NY Law Presumes Drivers Are Employees The new New York Commercial Goods Transportation Industry Fair Play Act, which takes effect March 11, 2014, creates a strong presumption that drivers of commercial vehicles are employees, and requires employers to post a notice of employees rights under the law. To rebut the presumption of employee status, a business must satisfy one of two tests. The first is a three-part test, showing that: 1. The drivers are contractually and factually free from control and direction when performing the job; 2. The service performed by the drivers is outside the usual course of business for the entity that is retaining the drivers; and 3. The drivers customarily engage in an independently established trade, occupation, profession or business that is similar to the driving services being provided. The second test requires that the nature of the business relationship with the drivers satisfy an 11-part separate business entity test. This test, which parallels the standard previously established in New York by the Construction Industry Fair Play Act, builds on the elements of the rightof-control test commonly applied by the New York courts to determine independent contractor status. However, the 11-part test is more rigorous than the court-applied standard. The court standard balanced various factors and assessed whether, under the totality-of-the-circumstances, they weighed in favor of independent contractor status. Under the new New York law, all 11 factors must be satisfied before the drivers can be classified as a separate business entity.

5 SPRING 2014 TAKEAWAYS 5 COURT WATCH: Supreme Court Ruling on Compensable Time Benefits Unionized Employers Time spent putting on or removing protective gear need not be compensable if it is excluded under the terms of a union contract, the Supreme Court held unanimously in Sandifer v. United Steel Corp. The case centered around interpretation of a provision in the Fair Labor Standards Act that permits parties to a union contract to agree that the time non-exempt employees spend changing into clothes at the start or end of the work shift is not compensable. The union had argued that this exception did not apply to their protective gear, because such gear was distinct from clothes. The Supreme Court disagreed, and held that if the time at issue was largely spent changing into/out of articles that are designed and used to cover the body (such as jackets, pants, boots, helmets, and gloves), then the exception applied (and employees were not entitled to be paid), even though the articles constituted protective gear. Note that Sandifer is limited to the union context. Nonunionized employers must generally compensate employees for time spent changing into or out of protective gear, provided this activity is integral to the employee s principal workplace activity. New Jersey Court Limits Employee Self- Help in Taking Employer s Documents The New Jersey Supreme Court significantly changed the legal landscape in 2010 by holding that an employee could lawfully appropriate an employer's files pertaining to other employees and use them in support of her sexual harassment claim. Employers were strongly advised, in the wake of that case (Quinlan v. Curtiss-Wright Corp.), to introduce or modify their policies regarding access to and use of company property to clarify the confidentiality of employment documents and expressly prohibit employees from using them for self-help. This approach remains advisable, and the New Jersey Appellate Division's recent decision in State of New Jersey v. Saavedra can offer employers some comfort that employees may not take employers' confidential documents with impunity. Saavedra was a clerk for the North Bergen Board of Education who took hundreds of nonpublic, confidential government documents, including originals, which she then introduced as evidence in her employment discrimination case against the Board. In upholding Saavedra s subsequent indictment for official misconduct and theft, the appellate court rejected Saavedra s argument that Quinlan makes it lawful to take confidential documents. Citing evidence that Saavedra violated the Board s internal policies and regulations by taking the documents, the court held that the state produced sufficient evidence to establish a case of theft. The court further rejected arguments of a chilling effect created by the indictment. The documents did not contain a "smoking gun" in support of Saavedra's discrimination claims, and Saavedra did not assert a likely risk that the documents otherwise would have been destroyed or unobtainable through a discovery request in the course of the litigation. Compliance Checklist New Notice Obligations as of 2014 Employers should have procedures in place to distribute the following notices, which are new mandates for NYC: As of May 1, distribute Sick Time Act notice to current employees and thereafter to all new hires By May 30, distribute Pregnancy Discrimination law notice to existing employees NJ: Provide Gender Inequality Protection Notice to all new hires (since January 6) and current employees (was due by February 5); employees must sign acknowledgment of receipt Since January 21 (Jersey City only), provide Sick Time Act notice to new hires As of May 29 (Newark only), provide Sick Time Act notice to new hires By December 31, satisfy annual distribution of Gender Inequality Protection notice; need employee acknowledgment of receipt