Employers in New York will be subject to new “call-in” pay and scheduling requirements under recently-proposed state Regulations. Governor Andrew Cuomo recently announced these proposed Regulations, which the New York State Department of Labor (“DOL”) will reportedly publish in the State Register on November 22, 2017.
New York regulators have recently focused their enforcement sights on the so-called “just-in-time” or “on-demand” scheduling of workers. According to Governor Cuomo, this practice entails the scheduling or cancelling of a worker’s shift with little or no advance notice. At the Governor’s direction, the DOL recently held hearings across the state on this issue, which then led to issuance of the proposed Regulations.
If enacted, the proposed Regulations would amend New York’s catch-all “Miscellaneous Industries” minimum wage order, including those portions applicable to non-exempt “nonprofitmaking institutions” across the state.
Call-In Pay Under Current New York Law
Under the Miscellaneous Industries minimum wage order, non-exempt employees who report to work are currently entitled to call-in pay equal to the lesser of four hours of pay or pay for the number of hours in the regularly-scheduled shift, at the state minimum wage rate. Notably, the DOL has interpreted this provision, such that it only effectively applies to non-exempt workers who earn at or very near the state minimum wage. In this regard, the DOL previously stated in Opinion Letter No. RO-09-0133, dated December 2, 2009: “[I]f the amount paid to an employee for the workweek exceeds the minimum and overtime rate for the number of hours worked and the minimum wage rate for any call-in pay owed, no additional payment for call-in pay is required during that workweek.” (emphasis added).
In other words, under DOL’s interpretation, New York employers could potentially apply an “offset” — for amounts paid to workers above the state minimum wage and overtime rates during the same workweek — against any “call-in” pay otherwise due to workers.
Additionally, under current law, employers are generally free to schedule, and, when necessary, cancel shifts before employees report for work, without incurring any additional payment obligation.
Call-In Pay Under the Newly-Proposed DOL Regulations
The recently-proposed Regulations would create a number of new circumstances when non-exempt employees will be eligible to receive “call-in” pay, including the following:
Employees who report to work for a shift that was not scheduled at least 14 days in advance will be entitled to an additional two hours of call-in pay;
Employees whose shifts are cancelled within 72 hours of the start of that shift will be entitled to at least four hours of call-in pay;
Employees who are required to be on-call and available to report to work for any shift will be entitled to at least four hours of call-in pay; and
Employees who are required to be in contact with their employer, within 72 hours of the start of a shift, to confirm whether or not to report to work for that shift will be entitled to four hours of call-in pay.
Under the Regulations, the above call-in pay must be calculated at the current state minimum wage rate (which now varies by location and workforce size) without any allowances, and employees must receive their “regular rate” for their actual time of attendance. However, these new requirements will not apply to otherwise covered employees whose weekly wages exceed 40 times the applicable state minimum wage.
The proposed Regulations will also replace current “call-in” pay requirements with the following:
Employees who report to work for any shift will be entitled to at least four hours of call-in pay.
Notably, the proposed Regulations state: “Call-in pay shall not be offset by the required use of leave time, or by payments in excess of those required under” the applicable minimum wage order. Although this provision is not entirely clear on its face, conceivably, it was drafted with the intent of curtailing application of the above-referenced weekly “offset” provided under prior DOL interpretation.
Finally, the proposed Regulations state that the above requirements will not apply to certain employees “who are covered by a valid collective bargaining agreement that expressly provides for call-in pay.” Further, the requirements may not apply in certain other circumstances, such as when a business cannot begin or continue operations due to a state of emergency or other “Act of God” beyond its control.
Employers should also be mindful that New York City recently passed a similar law that will become effective on November 26, 2017. This other local law places somewhat similar requirements on retail employers, and also places additional requirements on certain fast food establishments.
According to DOL, the proposed Regulations will be subject to a 45-day comment period after official publishing. We will update this article with any further developments, and will be announcing a free webinar on the proposed Regulations in the coming days.
If you have any questions about this issue in the meantime, please contact Andrew D. Bobrek, any of the attorneys in our Labor and Employment Law Practice, or the attorney in the firm with whom you are regularly in contact.
Author’s Note: A special thanks to Richard White, who assisted in drafting this article.
The New York State Workers’ Compensation Board (“WCB”) has just released the long-awaited Paid Family Leave (“PFL”) forms. There is a general application form (PFL-1), as well as various certification forms depending on the type of leave requested:
To apply for PFL to care for a family member with a serious health condition, the WCB has developed the PFL-1 form, as well as PFL-3 (a release of personal health information form) and PFL-4 (a health care provider certification form) https://www.ny.gov/sites/ny.gov/files/atoms/files/careforfamilymember.pdf
To apply for PFL for a qualifying exigency arising from service of a family member in the U.S. Armed Forces, the WCB has developed the PFL-1 form and PFL-5 (a form to certify the military qualifying event) https://www.ny.gov/sites/ny.gov/files/atoms/files/military.pdf
As we mentioned in a previous blog post, the WCB has already released the waiver form (PFL-Waiver) and two forms regarding voluntary coverage (PFL-135 and PFL-136). We will continue to provide additional updates on PFL as they become available.
The New York Workers’ Compensation Board recently released three key forms associated with Paid Family Leave (“PFL”):
PFL-Waiver: “Employee Opt-Out of Paid Family Leave Benefits”
PFL-135: “Employer’s Application for Voluntary Coverage” (No Employee Contribution)
PFL-136: “Employer’s Application for Voluntary Coverage” (Employee Contribution Required)
These are the first forms that the WCB has formally published in connection with PFL, which will become effective on January 1, 2018. We are still waiting for the WCB to provide the requisite PFL certification forms and will provide additional updates as they become available.
So here is Week 3 of Bond’s New York Paid Family Leave (“PFL”) Q&As. This week we are focusing on which employers are and are not covered. We also answer your questions about what certain exempt employers (i.e., those who are not required to have PFL coverage) must do in order to opt in for voluntary PFL coverage. In fact, certain exempt employers have an obligation to make a decision by December 1, 2017, as to whether to opt in for PFL coverage and will be required to report their decision to the NYS Workers Compensation Board (“WCB”).
Question: Are there any employers in New York that are not covered by PFL?
Answer: Yes. In light of the fact that PFL is intended to piggy back onto the Disability Benefits Law (“DBL”), it applies to any entity considered a covered employer under DBL. While all private sector employers in New York that have one or more employees are subject to and have to comply with DBL, and now PFL, the same exclusions as to who is a “covered employer” apply. Thus, employers exempt from DBL are also exempt from PFL. PFL does not apply to public sector employers, including the state, any political subdivision of the state, a public authority, or any other governmental agency or instrumentality. This exemption applies to cities, villages, towns, public libraries, public authorities, municipalities, fire districts, water districts, and school districts.
There are also a few others who are not required to provide PFL benefits, including owners/shareholders of a corporation with no employees, owners/shareholders of partnerships, LLCs, LLPs with no employees, individuals who employ personal or domestic workers that work less than 40 hours per week, Native American enterprises (i.e., casinos), self-employed individuals, or sole proprietors and members of an LLC/LLP.
Question: Can public sector employers choose to be covered under the PFL law?
Answer: Yes. The PFL regulations lay out the process a public employer must follow if it elects to opt in. The process is slightly different for unionized and non-unionized employers. If a public employer chooses to cover its non-unionized workers, it must provide 90 days’ notice of its decision to opt in. The notice must tell employees that the payroll deduction will not exceed the maximum amount allowed by law.
Not surprisingly, in order for a public employer to cover its employees who are represented by a union, it must engage in collective bargaining and obtain the agreement of the union. Once an agreement is reached, the employer must notify the WCB for approval.
Notably, public employers are the only employers who can elect to provide DBL only, PFL only, or both DBL and PFL coverage. Public employers who elect to provide PFL must maintain it for at least one year. Prior to discontinuing voluntary PFL coverage, the public employer must provide 12 months’ written notice to the WCB and the affected employees. Those employers will also need to have made provisions for the payment of any benefits incurred on and prior to the effective termination date of such benefits.
Question: Are public sector employers who are already providing voluntary DBL coverage required to also provide PFL?
Answer: No. However, public sector employers who currently provide voluntary DBL to their employees must notify their employees and the WCB whether they will or will not be providing PFL to their employees. This decision must be made and reported to the WCB by December 1, 2017.
*****
Please continue to visit our blog for weekly Q&As during August 2017 and other PFL updates throughout the fall.
If you have any questions about PFL, please contact the authors of this post, any of the attorneys in our Labor and Employment Law Practice, or the Bond attorney with whom you regularly work.
Welcome to Week 2 of Bond’s New York Paid Family Leave (“PFL”) Q&As. Many of the most commonly asked questions during Bond’s PFL webinars focused on the intersection of the federal Family and Medical Leave Act (“FMLA”), the Disability Benefits Law (“DBL”) and PFL. In this post, we answer some of those questions.
Question: Can an employee save their PFL time and take it after having already taken 12 weeks of FMLA? Or vice versa, save their FMLA time and use it after taking PFL?
Answer: Like every good legal question, the answer is . . . it depends. More specifically, it depends on the reason for the leave. It is important to bear in mind that the qualifying reasons for FMLA and PFL are like intersecting circles. While there are some reasons that fall under both laws, there are some leaves that will be covered only by FMLA, and some that will be covered only by PFL. So, an employee can only “save” one type of leave or “stack” the two leaves if one of the leaves (or part of a leave) qualifies under only one law.
To demystify this interplay, let’s take a few potential scenarios:
Karen takes leave to care for a grandparent with a serious health condition beginning in January 2018 for 8 weeks. This is a PFL qualifying reason, but not an FMLA qualifying reason. (Grandparents are a covered family member under PFL, but not under FMLA.) Therefore, when Karen returns to work, she still has her full 12-week entitlement under FMLA. In October 2018, Karen’s daughter has surgery and she needs 6 weeks off. Although she has exhausted her PFL leave, she still has her entire FMLA bank of 12 weeks available (assuming the 1,250 threshold of hours is met) because the January leave did not count against her FMLA entitlement. Karen ends up taking 14 job-protected weeks off in 2018 (and still has 6 weeks of FMLA time to spare!).
Ed takes leave in February 2018 because he is having bunion surgery. His surgeon takes him out of work for 6 weeks. This is an FMLA qualifying leave, but not PFL because an employee’s own serious health condition is not covered under PFL. In July 2018, Ed’s father has a stroke. Ed requests 10 weeks off because his father is undergoing rehabilitation. Ed only has 6 more weeks of FMLA. However, he still has 8 weeks of PFL leave that he has not yet touched! Here is where things get more complicated: Is Ed entitled to a total of 14 more weeks (6 FMLA + 8 PFL)? No! The first 6 weeks would count as both FMLA and PFL. His father’s serious health condition is covered under both laws. After 6 weeks, FMLA runs out, but Ed can stay out an additional 2 weeks under PFL. In the end, he is entitled to only 8 more weeks — not the 10 he requested. The employer could deny the additional 2 weeks.
Jeremy is a new father in 2018. He has heard about these laws, and knows that FMLA provides 12 weeks and PFL provides 8 weeks (in 2018). He requests 20 weeks to bond with his new baby boy. Is he eligible for 20 weeks? No. In this case, the reason for the leave (bonding) qualifies under both laws. Assuming Jeremy has met the eligibility requirements under both laws, the employer can require that the leaves be taken concurrently. The 12 weeks (FMLA) and 8 weeks (PFL) run at the same time. He can only take a total of 12 weeks of job-protected leave.
Question: In that last example, couldn’t Jeremy say that he does not want to be paid for the first 12 weeks (the FMLA period) and refuse to file a PFL claim, in an attempt to save the PFL leave?
Answer: No. The PFL regulations provide that if a leave qualifies under FMLA and PFL, the employer designates the leave under FMLA, and the employee is notified that it is covered under both laws, the FMLA leave time will count against the employee’s PFL entitlement even if the employee refuses to file a PFL claim.
Question: Can you review the maternity leave scenario again?
Answer: Maternity leave promises to be the most confusing to administer because of the intersection of PFL, FMLA, and DBL. Here is how it could play out in a typical pregnancy: The first 6-8 weeks after childbirth is usually considered a period of disability, so the mother could use her DBL benefits without touching her PFL bonding benefit. Then, when she completes that 6-8 week period, she could transition to PFL bonding leave and receive the 8 (eventually 12) week benefit after the DBL benefit. Meanwhile, FMLA runs concurrently with both the DBL and then the PFL leave. However, the mother’s leave entitlement does not end at the expiration of the 12 weeks of FMLA leave because under state law, she is entitled to the full 8 week PFL benefit once she finishes her DBL benefit. The total job-protected time taken (assuming 6 weeks of DBL) is 14 weeks (6 + 8) in 2018.
Question: Can a mother choose to forego DBL and go straight to PFL?
Answer: Yes, once the baby is born, but it will reduce the total number of weeks she can be out on job-protected leave. The mother could elect to start PFL bonding leave on the delivery date. The 8 weeks of PFL would run concurrently with FMLA, and she would be entitled to a total of 12 weeks of leave.
Question: We heard that intermittent leave under PFL can be taken in full day increments, and nothing shorter. If an employee wants to take shorter increments, can the employee use just FMLA leave? Does that count against his/her PFL entitlement?
Answer: Luckily, the regulations address this very scenario. If an employee takes FMLA leave in increments shorter than a day, and if the reasons for the leave would also qualify under PFL, the employer may track this time, and when “the total hours taken for FMLA in less than full day increments reaches the number of hours in an employee’s usual work day, the employer may deduct one day of paid family leave benefits from an employee’s annual available family leave benefit.” However, “[t]he employer shall not be entitled to reimbursement from its carrier for such paid FMLA hours.” 12 N.Y.C.R.R. § 380-2.5(g)(5).
*****
Please continue to visit our blog for weekly Q&As during August 2017 and other PFL updates throughout the fall.
If you have any questions about PFL, please contact the authors of this post, any of the attorneys in our Labor and Employment Law Practice, or the Bond attorney with whom you regularly work.
Thank you to everyone who attended Bond’s webinar on New York Paid Family Leave (“PFL”) on Tuesday, July 25, 2017. We had a tremendous turnout and received hundreds of questions. While we didn’t have the opportunity during the webinar to address all of the inquiries that we received, we noted afterwards that many employers raised the same questions. Accordingly, for the month of August, we will be posting a weekly blog article dedicated to answering some of the most frequently asked questions we received during the webinar. We hope this follow-up will be helpful to employers in preparation for the launch of PFL in 2018.
Today’s PFL Q&As focus on taking leave to provide care for a family member with a serious health condition.
Question: Can I use PFL to care for my family member with a serious health condition, if the family member lives in a different state?
Answer: The PFL regulations are not entirely clear on this point. However, the Workers’ Compensation Board (“WCB”) takes the position that an eligible employee may take PFL to care for a family member who lives in another state. The key here is that the employee is in “close and continuing proximity to the care recipient,” which the WCB has interpreted to mean in the same general location as the family member receiving the care. So, for example, if an employee requests PFL to care for a grandparent living in Texas, the employee would need to physically go to Texas to provide care in order to be covered under the PFL.
Question: What constitutes “providing care” for a family member with a serious health condition?
Answer: Providing care includes necessary physical care, assistance with essential daily living matters, assistance in treatment, and personal attendant services. It also includes emotional support, visitation, transportation, and/or arranging for changes in care.
Question:Can I take PFL to care for an adult child?
Answer: Yes. Unlike the FMLA, which contains limits on an individual’s ability to take leave for an adult child, the PFL permits a qualified employee to care for any child with a serious health condition, regardless of the child’s age.
*****
Please continue to visit our blog for weekly Q&As during August 2017 and other PFL updates, as appropriate.
If you have any questions about PFL, please contact the authors of this post, any of the attorneys in our Labor and Employment Law Practice, or the Bond attorney with whom you regularly work.
The New York Workers’ Compensation Board published its final regulations implementing the New York Paid Family Leave Law today, Wednesday, July 19, 2017. The final regulations largely mirror the proposed regulations issued on May 24, but the Board provided further clarification in certain areas. For example, in its commentary, the Board clarified the rules applicable to coverage of out-of-state employees, the measurement of “days worked” as applied to part-time employees, and how to calculate an employee’s average weekly wage. Core provisions, such as PFL coverage, eligibility, and interplay with other leave laws, remain the same.
Bond will discuss the final regulations in more detail at a live, complimentary webinar on July 25, 2017 (1:00 p.m. – 2:00 p.m.). Click here to register for the webinar. In addition, please continue to follow Bond’s New York Labor & Employment Law Report for additional updates leading up to the January 1, 2018 effective date of PFL in New York.
Now that the regulations are final, employers should begin, in earnest, to modify existing leave policies and processes to incorporate PFL requirements, and to develop new PFL policies that provide employees with information about their rights and obligations under the law. Bond’s team of labor and employment attorneys are at the ready to answer questions and guide employers through this process.
If you have any questions about PFL, please contact the authors of this post, any of the attorneys in our Labor and Employment Law Practice, or the Bond attorney with whom you regularly work.
If you work in human resources anywhere in New York, you have inevitably heard about New York’s new paid family leave law (“PFL”). But other than what the law’s name implies — that there will now be a form of paid family leave available to employees in this state — what are the administrative and practical implications that this new law will have on your workplace? You are not alone if you have questions, and more questions, about what this new law will entail. Although we are still waiting for final regulations to be issued by the New York State Workers’ Compensation Board that would definitively answer many questions being raised, based on the statutory language and the proposed regulations that are currently pending, here are answers to some of the more frequently asked questions regarding New York’s PFL.
1. Does this new law apply to my employer?
Whether the PFL applies to a particular employer depends on whether the employer operates in the public or private sector. All private sector employers in New York that have one or more employees are subject to and have to comply with the PFL. In other words, this new law applies to virtually all private sector employers in New York State.
By contrast, however, the PFL does not apply to public sector employers unless the particular public employer has elected to opt in to provide benefits under the PFL. Public employers whose employees are not represented by a union may opt in to the PFL if those non-unionized employees are given 90 days’ notice of the employer’s decision to opt in. Public employers whose employees are represented by a union also have the option of opting in provided the employer and union negotiate the issue and agree to do so.
2. When does the PFL take effect?
Covered employers are required to begin providing paid family leave benefits to eligible employees on January 1, 2018, and employees must contribute via payroll deduction to the cost of those benefits as of that same date. However, covered employers are permitted to, but do not have to, begin collecting deductions from employees as early as July 1, 2017.
3. For what reasons can an eligible employee take paid family leave?
Unlike the federal Family and Medical Leave Act (“FMLA”), an employee’s own serious health condition is not a qualifying reason under the PFL. Otherwise, the qualifying reasons for leave under the PFL are similar to those already provided under the FMLA — i.e., to bond with a new child (either the birth, adoption, or placement in foster care); to provide care for a child, parent, grandparent, grandchild, spouse, or domestic partner with a serious health condition; and for qualifying exigencies arising from military service of the employee’s spouse, domestic partner, child, or parent. What qualifies as a “serious health condition” or a “qualifying exigency” under the PFL is consistent with what qualifies under the FMLA.
4. Are all employees eligible for this leave, or is there a threshold amount of time an employee needs to work before becoming eligible, like there is under the FMLA?
Although the PFL and FMLA are similar in several respects, the eligibility requirements under the two laws are quite different. Under the FMLA, an employee must have actually worked a minimum of 1,250 hours in addition to being employed for a year preceding a period of leave before the employee becomes eligible for leave. However, under the PFL, the only eligibility criteria is the employee’s length of employment. Employees who work more than 20 hours per week become eligible to receive benefits under the PFL after they have been employed for 26 consecutive weeks, whereas employees who work less than 20 hours per week become eligible to receive PFL benefits after 175 days. So long an employee meets the applicable 26-week/175-day threshold, there is no additional requirement that employees have actually worked a minimum number of hours in order to be eligible for benefits under the PFL.
5. How much paid family leave time are eligible employees entitled to?
PFL benefits will be phased in over a 4-year period so that by 2021 when the PFL takes full effect employees in New York will be entitled to 12 weeks of paid family leave time annually for qualifying reasons. Effective January 1, 2018, an eligible employee will be entitled to receive 8 weeks of leave paid at a rate of either 50% of the employee’s average weekly wage or 50% of New York State’s average weekly wage, whichever is less. Effective January 1, 2019, an eligible employee will be entitled to receive 10 weeks of leave paid at a rate of either 55% of the employee’s average weekly wage or 55% of New York State’s average weekly wage, whichever is less. Effective January 1, 2020, an eligible employee will be entitled to receive 10 weeks of leave paid at a rate of either 60% of the employee’s average weekly wage or 60% of New York State’s average weekly wage, whichever is less. And finally, effective January 1, 2021, an eligible employee will be entitled to receive 12 weeks of leave paid at a rate of either 67% of the employee’s average weekly wage or 67% of New York State’s average weekly wage, whichever is less.
6. How do we know what New York State’s average weekly wage is?
New York State’s average weekly wage is currently $1,305.92. On March 31st of each calendar year, the New York State Department of Labor calculates the State’s average weekly wage based on statewide data from the prior calendar year.
7. Whose obligation is it to pay for the paid family leave — employer or employee?
Although employers are required to provide PFL benefits to eligible employees, employers are not required to pay anything towards the cost of those benefits. Paid family leave is intended to be 100% employee-funded. That is not to say that employees pay themselves the actual wages they would be entitled to during periods of leave, but rather employees are required to contribute, via payroll deductions, to either the premium cost associated with the employer’s attainment of PFL insurance or to the employer’s cost for self-insuring.
One question that still remains open is whether employers may pay for PFL themselves, without taking deductions from their employees’ pay. This question may be answered when the Workers’ Compensation Board issues final regulations later this year, so stay tuned.
8. Is there a limit on how much can be deducted from an employee’s paycheck for PFL benefits?
Currently, 0.126% of the employee’s weekly wage up to a maximum of 0.126% of the New York State average weekly wage can be deducted from an employee’s paycheck for PFL purposes. For example, let’s say that an employee earns $1,250 per week, which is less than the State’s average weekly wage (currently set at $1,305.92). In that case, the maximum PFL deduction for that employee is 0.126% of that $1,250 weekly earnings, or $1.58 per week. But if the employee earns more than the State’s average weekly wage, the maximum PFL deduction for that employee is 0.126% of the State average, or $1.65 per week. In other words, regardless of whether the employee’s weekly earnings are $1,500 or $10,000 or even more, so long as his/her weekly earnings exceed the State average (currently set at $1,305.92), the most that can be deducted from that employee’s pay is $1.65 per week. Just remember that the State’s average weekly wage is re-calculated each year (see Question 6 above), so the maximum amount that can be deducted from an employee’s paycheck may change each year even if the employee’s weekly wages remain the same.
9. Is this mandatory or can employees opt out if they don’t want to participate?
This is mandatory. With only one exception, all employees are required to contribute to the cost of PFL and must have the appropriate amounts deducted from their pay — even if they have not yet been employed long enough to themselves be entitled to benefits under the PFL. The only exception to this is for employees (such as seasonal and temporary employees) who are hired for shorter periods of time than is necessary for them to be eligible to receive PFL benefits. So if, for example, an employee is only hired for a two-month period of time, and therefore less than either the 26 weeks or 175 days necessary to become eligible for PFL benefits (see Question 4 above), that employee can opt out of making payroll deductions towards the cost of PFL by filing a PFL waiver with the employer. But if that same employee’s term of employment changes so that now he/she will be employed for longer than the 26-week/175-day eligibility threshold, a previously filed opt-out waiver will be deemed revoked within eight weeks of the change, and the employee will have to make PFL deductions and make a retroactive payment for the period back to the employee’s date of hire.
10. Can employees be required to take their accrued vacation/PTO time concurrently with this new family leave time?
No. Unlike under the FMLA, under the PFL employees cannot be required to take vacation and other PTO time concurrently with their PFL leave. Employees can choose to have PFL time run concurrently with any vacation or other PTO time so that they receive their full pay during periods of leave, but they cannot be required to do so.
11. Is there a deadline for employers to decide whether to get insurance or self-insure?
Yes. If an employer wants to forego getting insurance and to self-insure PFL benefits, the employer must elect to do so no later than September 30, 2017, by filing appropriate paperwork with the State.
We hope these answers have helped in your understanding of New York’s latest employee benefit. Stay tuned for additional information, particularly once the Workers’ Compensation Board issues its final regulations later this year. In the interim, our Bond team is available to answer any other questions you may have, assist with policies to address these issues, and help you navigate the PFL requirements.
The New York Paid Family Leave Law, which becomes effective January 1, 2018, will, when fully phased in, result in eligible employees being entitled to up to 12 weeks of paid family leave when they are out of work for certain qualifying reasons. As discussed in previous blog articles (May 25, 2017, and March 13, 2017), the paid family leave program is intended to be funded entirely through employee payroll deductions and employers are not required to fund any portion of this benefit. The proposed regulations issued by the New York Workers’ Compensation Board provide that employers are permitted, but not required, to begin to collect weekly contributions on July 1, 2017. Under the statute, the New York Department of Financial Services was tasked with setting the maximum employee contribution by June 1, 2017, and annually thereafter.
Just yesterday, June 1, 2017, the Superintendent of Financial Services issued its decision setting the maximum employee contribution at 0.126% of an employee’s weekly wage, up to and not to exceed 0.126% of the statewide average weekly wage (“SAWW”). The SAWW, which was set by the New York State Department of Labor on March 31, 2017, is currently $1,305.92. So, for example, if an employee’s weekly wage amounts to $1,000.00, the maximum payroll deduction for PFL would be $1.26 for that week. For employees who make more than the SAWW of $1,305.92, the PFL deduction will be capped at $1.65 per week (0.126% of $1,305.92). As a reminder, the SAWW is calculated annually on March 31st based on the previous calendar year, so the maximum PFL employee contribution will likely increase in March 2018.
We will continue to provide updates on the PFL, including the status of the proposed regulations, as information becomes available.
Out-of-state entities with the power to dictate a New York employer's hiring and retention policies take notice: you can be subject to liability under the New York Human Rights Law ("NYHRL") if you "aid and abet" discrimination against individuals who have a prior criminal conviction, even if you are not the direct employer of those individuals. In Griffin v. Sirva, Inc., the New York Court of Appeals held that while liability under Section 296(15) of the NYHRL (which prohibits employment discrimination based on prior criminal convictions) is limited to an aggrieved party's employer, liability can extend beyond a direct employer under Section 296(6) of the NYHRL "to an out-of-state non-employer who aids or abets employment discrimination against individuals with a prior criminal conviction." In Griffin, the plaintiffs were employees of Astro, a New York moving company. The plaintiffs had prior criminal convictions for sexual offenses against children. After the plaintiffs were hired, Astro entered into a moving services contract with Allied, a nationwide moving company based on Illinois. As a result of that contract, a large majority of Astro's work was thereafter performed on behalf of Allied. The contract required Astro to adhere to Allied's Certified Labor Program guidelines, one of which required that employees who perform work in a customer's home or place of business pass a criminal background check. Under Allied's guidelines, employees with prior sexual offense convictions automatically failed the screening. Pursuant to the contract with Allied, Astro would have been subject to escalating penalties if it used unscreened labor. Accordingly, the plaintiffs were screened and when their convictions were identified, Astro fired them. The plaintiffs filed suit in the U.S. District Court for the Eastern District of New York against both Astro and Allied, alleging that their terminations based upon their prior criminal convictions violated the NYHRL. Allied, which was not the plaintiffs' direct employer, moved for summary judgment on the NYHRL claims. The District Court granted its motion, holding that: (1) Section 296(15) of the NYHRL applies only to employers and that Allied was not the plaintiffs' employer; and (2) Section 296(6) of the NYHRL (the "aiding and abetting" provision) could not be used to impose liability on Allied because Allied did not participate in firing the plaintiffs. The plaintiffs appealed the District Court's decision to the Second Circuit Court of Appeals, which posed the following three questions to the New York Court of Appeals regarding the interpretation of Section 296(15) and 296(6) of the NYHRL: (1) Does Section 296(15) of the NYHRL, prohibiting discrimination in employment on the basis of a criminal conviction, limit liability to an aggrieved party's "employer"? (2) If liability under Section 296(15) is limited to an aggrieved party's employer, what is the scope of the term "employer" for purposes of that provision? (3) Does Section 296(6) of the NYHRL extend liability to an out-of-state non-employer who aids or abets employment discrimination against individuals with a prior criminal conviction? The Court answered the first question by holding that liability under Section 296(15) is limited to an aggrieved party's employer. The Court answered the second question by holding that common law principles of an employment relationship should be applied, "with greatest emphasis placed on the alleged employer's power to 'to order and control' the employee in the performance of his or her work." The Court answered the final question by holding that an out-of-state non-employer who engages in conduct that aids or abets employment discrimination against individuals with a prior criminal conviction -- for example, by imposing contractual terms on a New York employer prohibiting the use of employees with certain types of criminal convictions from performing work under the contract -- can be held liable under Section 296(6) of the NYHRL if the employer is determined to have violated Section 296(15) of the NYHRL by complying with the terms of the contract. While the plaintiffs' appeal to the Second Circuit regarding the dismissal of their claims against Allied was pending, their claims against Astro (their direct employer) proceeded to a jury trial. The jury found that Astro did not violate the NYHRL by firing the plaintiffs due to their prior criminal convictions. Therefore, in this particular case, it does not appear that Allied will be subject to liability. However, the interpretation of Section 296(6) of the NYHRL set forth by the New York Court of Appeals can certainly be used in future cases to impose liability on an out-of-state non-employer who imposes contractual terms on a New York employer that cause the New York employer to violate Section 296(15) of the NYHRL.
Yesterday, May 24, 2017, the New York Workers’ Compensation Board (the “Board”) issued another set of proposed regulations implementing the New York Paid Family Leave Law (PFL). The initial proposed regulations were published on February 22, 2017, as discussed in a previous blog article. During the comment period that followed, the Board received 117 formal comments. With the newly proposed regulations, the Board provided a detailed assessment of those comments and its responses. The release of the new proposed regulations opens a new 30-day comment period. The new proposed regulations contain very few revisions of significance. There are many minor changes, but no major changes to the overall scheme of the program. A few aspects of the commentary and changes are worth noting:
The regulations were revised to allow an employer to charge an employee’s accrued paid leave “in accordance with the provisions of the FMLA” when FMLA is run concurrently with PFL. It appears that the intent was to allow an employer to require an employee who takes concurrent FMLA and PFL leave to use accrued paid time off. Recall, under the earlier regulations, an employer was prohibited from requiring an employee to use accrued paid time off. The problem is that the new proposed language says “in accordance with the FMLA” and under the FMLA framework, while employers are generally permitted to force the substitution of accrued paid leave, they are prohibited from doing so when an employee is concurrently receiving disability or workers’ compensation benefits. This is because such benefits are paid, rendering the FMLA substitution provisions inapplicable. PFL, like disability and workers’ compensation, is a form of “paid” leave. Thus, it could be argued that the FMLA rule allowing for employers to force the use of paid leave may be inapplicable. This is just one example of the complex interplay between the state and federal statutes that employers will be required to carefully work through when developing new leave policies. Hopefully, the Board will provide additional guidance to clarify this issue.
The PFL eligibility criteria has been updated so that the eligibility of employees who work 20 hours or more per week is measured based on number of weeks in employment, which must be at least 26, and the eligibility of employees who work less than 20 hours per week is measured based on the number of days worked, which must be at least 175. The earlier regulations considered any employee who worked less than five days per week to be part-time and required the employee to have worked 175 days of employment to be eligible for PFL. This revision takes into account that some full-time employees work longer days for fewer than five days a week, and allows them to become eligible after 26 weeks, rather than 175 days.
The proposed regulations were revised to clarify that an employee using intermittent leave must give the employer separate notice for each day of PFL. This change is important because the prior set of proposed regulations permitted employees who wanted to take intermittent PFL to only provide notice to the employer once. This is inconsistent with what is required under the FMLA and would have caused issues when FMLA and PFL are run concurrently.
Comments from unionized employers called for “more detail about how a collectively bargained plan can take the place of an employer plan, and which sections of the regulations can be changed by agreement, and which cannot.” While the Board made no changes to the proposed regulations, it points to Section 211(5) of the Workers' Compensation Law (governing disability benefits) and explains that an employer and union must apply to the Board in order to have a CBA fulfill the employer’s PFL responsibility, and that an assessment must be paid to the Board. It also added two examples of the types of rules than can be changed by agreement. First, unionized employees can establish eligibility through time worked at any employer covered by the CBA. Second, the CBA can provide that the union, not the employer, be responsible for time records and payroll deductions. Notably, as stated in our earlier blog article, the collectively bargained plan must provide benefits at least as favorable as the PFL law, including the length of leave and amount of payment. This requirement may make it unlikely that existing or future CBAs qualify for an exemption from this law.
Lastly, although no change was made to the proposed regulations, the Board addressed concerns about employers starting to take payroll deductions on July 1, 2017 when the PFL law does not go into effect until January 1, 2018. The Board noted that because the law establishes January 1, 2018 as the date upon which benefit payments begin, it is necessary that employers be permitted to take payroll deductions in advance to offset the cost of acquiring the mandated insurance policies. (The Department of Financial Services has been tasked with setting the maximum employee contribution by June 1st). The bottom line is that employers are allowed, but not required, to start taking payroll deductions on July 1, 2017. If an employer chooses not to do so, the employer will not be able to take deductions in excess of the maximum weekly contribution to retroactively cover the cost of providing PFL benefits.
Bond’s team of employment attorneys will continue to study these proposed regulations and provide additional analysis on this blog. Given the paucity of significant changes from the originally proposed regulations to the regulations proposed yesterday, we expect the final regulations will very closely mirror these proposed regulations. Therefore, employers should soon begin the process of drafting new policies so that they are ready for roll out in advance of the January 1, 2018 effective date.
A new New York City law covering freelance workers goes into effect on May 15, 2017. The law, informally called the “Freelance Isn’t Free Act,” gives non-employee independent contractors the right to a written contract upon request. Penalties are imposed for failing to provide a contract on request, failing to pay freelancers timely and in full, and for retaliating against freelancers who exercise their rights under the law. The purpose of the law is to provide protection to individuals who do not fit the legal definition of “employee,” and whose income is reported on a 1099 form instead of a W-2. The law covers only those independent contractors that consist of one person, whether or not they are incorporated or use a trade name. The law covers only those freelancers whose contracts with the hirer in any 120-day period exceed $800 in value. Sales representatives are excluded, but sales representatives are covered by an even stricter law, Section 191-a of the New York Labor Law. Lawyers and medical professionals are also excluded. The law applies to the private sector only. Written contracts with freelancers must include an itemization of the services to be provided, and the amount, rate, timing, and method of compensation. Unless the contract states otherwise, the presumption will be that the freelancer is entitled to payment within thirty days of the completion of the work. The written contract required by this law need not be extensive. In many cases, a few short sentences should suffice. There is no penalty for simply failing to provide a contract. Penalties are imposed only if the hirer refuses to provide a written contract after the freelancer requests one. It would be prudent, though, for hirers to provide written contracts to freelancers as a matter of routine. The penalty for failing to provide a written contract upon request is $250. The penalty for failing to pay a freelancer as promised is double damages. The penalty for retaliation is the value of the contract. In each type of case, the freelancer’s attorneys’ fees can also be awarded. Hirers who are found to have engaged in a “pattern or practice” of violating this new law can be fined up to $25,000.
