On May 21, 2018, the United States Supreme Court issued a highly awaited decision involving the legality of class action waivers in employee arbitration agreements. Be sure to read my and Madiha Malik’s blog on Murtha Cullina’s Employment Law Perspectives blog, which discusses the case and its effect on wage and hour cases.
In case you missed our discussion in a March 20, 2018 post, the New York City Council introduced a series of bills last month targeting sexual harassment in the workplace — The Stop Sexual Harassment in NYC Act. The City Council enacted the Act on April 11, 2018 and awaits the Mayor’s signature. These amendments make substantial changes to the New York City Human Rights Law in matters involving sexual discrimination, and impose additional obligations on New York City employers, some of which will be effective immediately. Read my and Melissa Federico’s detailed discussion on these amendments in our latest blog post .
The #TimesUp and #MeToo movements continue to be a force of national reckoning over sexual assault and harassment. This month, the New York City Council harnessed the energy from those social movements and transformed it into legislative action by introducing a series of bills aimed at preventing sexual harassment in the workplace. The Stop Sexual Harassment in NYC Act is a package of eleven bills that would significantly expand the obligations of many employers to prevent sexual harassment.
Mandatory Sexual Harassment Prevention Training
Int. 632 would require that all private employers with 15 or more employees to conduct annual anti-sexual harassment training. The training would be “interactive”, defined as participatory teaching whereby the trainee is engaged in a trainer-trainee interaction, use of audio-visuals, or other participatory forms of training as determined by the commission.
Apparently believing that employers are not capable of considering employees’ requests for reasonable accommodation on their own, the New York City Council has decided to dictate how those requests should be handled. An amendment to the New York City Human Rights Law, which takes effect on October 15, 2018, obligates employers to engage in a “cooperative dialogue” with an employee who might need a reasonable accommodation:
- for religious needs;
- relating to a disability;
Allegations of sexual harassment and misconduct against business leaders, politicians and artists, have become a front page staple of newspapers across the country. Many are shocked by the allegations and claim to wonder how they could have stayed secret for so long. Despite the numerous cases of sexual harassment filed each year in courts throughout the country, rendering the allegations a matter of public record, a bipartisan group in Congress is blaming the increased use of nonpublic arbitrations for keeping allegations quiet. As a result, they seek passage of a bill intended to prohibit sexual harassment and gender discrimination cases from being resolved privately in arbitration.
The bill, Ending Forced Arbitration of Sexual Harassment, would prohibit businesses from enforcing predispute arbitration agreements of sex harassment and discrimination claims covered under Title VII of the Civil Rights Act of 1964, as amended. A “predispute arbitration agreement” is defined by the bill as “any agreement to arbitrate a dispute that had not yet arisen at the time of the making of the agreement.” It targets arbitration agreements that an employee might be asked to sign as a condition of getting hired or remaining employed. The bill does not seek to eliminate predispute arbitration agreements in connection with other types of discrimination claims.
The bill does not address class action waivers, which increasingly have been included in arbitration agreements and require that claims be asserted individually and not on a class basis. Class action waivers can exist outside the context of arbitration, but they are not addressed in the bill. The bill also does not address the use of confidentiality agreements following the settlement of sexual harassment claims.
The New York City Human Rights Law (“NYCHRL”) was amended back in May 2017 to prohibit employers and employment agencies from inquiring into the salary history of job applicants. Employers and employment agencies had six months to prepare for that ban, which takes effect on October 31, 2017.
Although we previously covered the amendment in May 2017, a quick summary of its material provisions is in order:
- The salary history inquiry ban applies to all employers and employment agencies, regardless of size, that are hiring job applicants in New York City. This also includes situations where the job is located outside of New York City, although interviews occur in New York City. Consequently, the law affects employment outside of New York City as well.
On October 17, 2017, the New York City Council passed a bill amending the New York City Earned Sick Time Act (which took effect on April 1, 2014) to require paid time off for victims of family offense matters, sexual offenses, stalking and human trafficking, and their family members. The amendment would take effect 180 days after Mayor Bill de Blasio signs it into law, which he is expected to do.
Reasons for Using Safe Time
Once passed, the law, which would be renamed the “Earned Safe and Sick Time Act,” would require employers to allow employees to use safe time for the following reasons:
To be exempt from state and federal overtime requirements, an employee must satisfy both a salary test and a duties test. In May 2016, we blogged about the Department of Labor’s issuance of a Final Rule modifying the so-called “white-collar” employee exemptions to overtime under the federal Fair Labor Standards Act (“FLSA”). The proposed Final Rule increased the minimum salary that must be paid to exempt employees from $455 per week ($23,660 per year) to approximately $913 per week ($47,476 per year), and provided for subsequent annual revisions/increases. The Final Rule did not make changes to the duties test, which still must be satisfied for the exemptions to apply. The Final Rule was supposed to be effective on December 1, 2016, but on November 22, 2016, a federal court in Texas issued a nationwide preliminary injunction blocking the Final Rule from taking effect. On September 6, 2017, that injunction was made permanent, and the minimum salary threshold under federal law will remain at $455 per week at least until new regulations are issued by the Trump administration’s Department of Labor.
Despite the low salary threshold under federal law, employers in many states, including New York, are still required to pay substantially more in salary under state and local wage and hour laws. At around the time the Final Rule was to take effect, New York State adopted final regulations providing for annual increases to the minimum salary threshold necessary for exemption under New York’s Minimum Wage Act. Those annual increases took effect on December 31, 2016, with further increases scheduled for December 31, 2017. The following chart illustrates these scheduled increases over the next few years:
|Minimum Salary Required||12/31/16||12/31/17||12/31/18||12/31/19||12/31/20||12/31/21|
|NYC – Large Employers of 11 or more||$825.00||$975.00||$1,125.00||$1,125.00||$1,125.00||$1,125.00|
|NYC – Small Employer of 10 or less||$787.50||$900.00||$1,012.50||$1,125.00||$1,125.00||$1,125.00|
|Long Island & Westchester||$750.00||$825.00||$900.00||$975.00||$1,050.00||$1,125.00|
|Remainder of New York State||$727.50||$780.00||$832.50||$885.00||$937.50||TBD|
As of December 31, 2017, a large employer (one having 11 or more employees) in New York City will have to pay its exempt employees at least $975.00 per week, which is even higher than the amount under the voided federal Final Rule. By December 31, 2018, that same employer will be required to pay $1,125.00 per week to its white collar employees. Although the Trump administration will ultimately revise the federal minimum salary thresholds to keep pace with inflation, those inflation-based increases would still be substantially less than what New York law requires.
Because states are entitled to set a higher minimum salary threshold than what federal law requires, an employer with employees in different states will have to pay those employees differently even though all may be performing the same duties and functions. In New York, unless the employee is earning the minimum salary threshold required under New York Law, an employer will have to pay him or her overtime for hours worked over 40 in a workweek, while paying similarly situated employees in another state just his or her salary.
For the time being, employers that do business in New York will have to navigate the different and complex requirements imposed by state and local law, and as a result, have no reason to celebrate the death of the Final Rule.
Some states, such as Connecticut, provide for unpaid family and medical leave greater than that provided by federal FMLA. New York is about to join California in providing paid family leave.
Beginning on January 1, 2018, New York State will provide employee-funded paid family leave for qualifying employees. The New York State Paid Family Leave Benefits Law (PFLBL) provides full and part-time private sector employees with job-protected paid leave in certain situations after having worked for the employer for a specified period of time. Paid family leave will be covered by an employer’s disability insurance policy, and the premium for this coverage will be paid through employee payroll deductions. Although not yet required, employers have been permitted to take such deductions since July 1, 2017.
On July 19, 2017, New York State adopted final regulations further implementing and clarifying the PFLBL.
Earlier this year, we blogged about the United States Supreme Court’s decision to consider whether requiring employees to agree to arbitration and a waiver of their rights to assert claims through class actions violated the National Labor Relations Act (NLRA). During the Obama administration, the U.S. Department of Justice supported the position of the National Labor Relations Board (NLRB) that requiring class action waivers as a condition of employment violated the NLRA. Now, the Justice Department has switched sides and is supporting business, acknowledging in an amicus brief filed with the Supreme Court on June 16 that “[a]fter the change in administration, . . . [it] reconsidered the issue and has reached the opposite conclusion.”
The cases being considered by the Supreme Court are National Labor Relations Board v. Murphy Oil USA, Case No. 16-307, Epic Systems Corp. v. Lewis, Case No. 16-285, and Ernst & Young LLP v. Morris, Case No. 16-300. The Supreme Court’s decision will directly affect violations of employment laws, like the Fair Labor Standards Act (FLSA) and Title VII of the Civil Rights Act of 1964, as amended. Oral argument in these cases is scheduled for October 2017.
Although courts of appeal are split on the issue, the Second Circuit Court of Appeals (which covers New York, Connecticut, and Vermont) has previously held that class action waivers do not violate the NLRA. As a result, such waivers are currently legal in New York, Connecticut and Vermont.