New York Employment Legislation Update: What’s New for 2020

New York will see a slew of new labor laws in 2020 which may have a substantial impact on employers in the state. Businesses in New York should plan ahead and prepare to adjust their employment policies and practices accordingly.

We summarize some of the key changes to 2020 New York employment laws, and offer some practice pointers, below.

Wage-Hour

New York State and New York City

For a PDF version of the charts below, click here.

We discuss New York fast food minimum wage laws in greater detail here and here.

Salary Basis Test

As of December 31, 2019, the salary threshold is increasing significantly, as referenced in our prior advisories (here and here). The salary threshold is the minimum salary employers can pay workers classified as exempt pursuant to the administrative and executive exemptions under New York state law.

Consequently, employers must pay particular attention as year-end approaches to ensure that those positions they intend to keep exempt, remain exempt. The changes in salary threshold for administrative and executive exemptions depend on both the location of the employer and the number of employees.

FLSA Salary Threshold

As described in our previous advisories (available here and here), the U.S. Department of Labor (DOL) publicized its final rule raising the salary threshold for the executive, administrative, and professional (EAP) exemptions under the FLSA to $35,568 per year, or $684 per week.

This change is effective January 1, 2020 and reflects an increase from the current $23,660 annual salary (or $455 per week). Because New York’s salary threshold is greater than the federal FLSA threshold, New York employers must comply with the state threshold for administrative and executive exemptions.

Additionally, the final rule adjusted the highly compensated employee (HCE) total annual compensation requirement. The new threshold, also effective January 1, 2020, will be $107,432 annually (up from $100,000). 

• Practice Pointer: Although possible, it appears unlikely this rule will be blocked by Congressional action or by litigation (although litigation by worker advocates has been threatened). Consequently, employers currently paying EAP-exempt employees less than $35,568 per year need to increase their salary levels or convert positions to non-exempt status for 2020.

Salary History

New York City amended its Human Rights Law (NYCHRL) to prohibit inquiries into applicants’ salary histories during the hiring process. This law became effective October 31, 2017. We highlighted this legislation in our previous client alerts (available here and here).

On July 10, 2019, New York state expanded on the New York City law by prohibiting employers from requesting such information of applicants or employees.

Pursuant to the new legislation, no employer shall:

• Rely on an applicant’s wage or salary history in determining whether to offer employment to that individual or in determining that individual’s wages or salary;
• Request or require wage or salary history from an applicant or current employee as a condition to be interviewed, or as a condition of continuing to be considered for an offer of employment, or as a condition of employment or promotion;
• Request or require the wage or salary history of an applicant or current employee from a current or former employer, current or former employee, or agent of the applicant or current employee's current or former employer;
• Refuse to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee based upon prior wage or salary history;
• Refuse to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee because such applicant or current employee did not provide wage or salary history in accordance with the law; or
• Refuse to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current or former employee because the applicant or current or former employee filed a complaint with the New York State Department of Labor alleging a violation of the law.

Applicants and current employees may voluntarily, and without prompting, disclose or verify wage or salary history, such as for the purpose of negotiating wages or salary. In that event, an employer may confirm salary information. 

While New York state has not yet provided guidance as to how employers can confirm this information, the New York City Commission on Human Rights has stated that employers may request a prospective employee’s W-2 form to verify representations made about salary history if the applicant, voluntarily and without prompting, offers information about salary history.

Under the New York state law, individuals have a private right of action for compensatory damages sustained as a result of a refusal to hire or retaliation based on failure to provide wage or salary information. Potential remedies also include injunctive relief and attorneys’ fees.

This legislation goes into effect on January 6, 2020.

• Practice Pointers:
  
  • This new legislation is relatively unclear about whether and how an employer can use a current employee’s available salary information for promotions. The law may be read as limiting the prohibition to inquiring about current employee’s prior wage and salary information, i.e., information related to past employment.
    
    To that point, we note that an employer is only permitted to confirm wage or salary history after it makes an offer of compensation and the employee responds to that offer with prior wage or salary information to negotiate for a higher wage or salary. We thus advise employers to proceed with caution in light of the uncertainty surrounding the use of current employee’s available salary information for promotions.
  • New York employers should review their recruiting, interviewing, and hiring practices, as well as their promotion and internal transfer materials, to ensure compliance with the New York State and City bans on salary history inquiries.
    
    For example, employers should review their materials and remove any questions that expressly or impliedly “require” applicants and current employees to reveal prior compensation information.

Worker Protections in the #MeToo Era

On August 12, 2019, Governor Cuomo signed in to law legislation that expands worker protections under the New York State Human Rights Law (NYSHRL). We discussed that development in a pair of previous client alerts (available here and here).

While certain of those legal requirements became effective in 2019, employers should be aware of the following new requirements, and their corresponding effective dates:

Confidentiality Agreements

Non-disclosure agreements (NDA) entered into as part of employment contracts on or after January 1, 2020 must include an explicit carve-out allowing the employee or potential employee entering into the NDA to speak with “law enforcement, the Equal Employment Opportunity Commission, the state Division of Human Rights, a local commission on human rights, or an attorney retained by the employee or potential employee.”

In the absence of such language, NDAs will be void and unenforceable to the extent they prevent disclosure of factual information related to any future claims of discrimination.

Employer Size

As of February 8, 2020, the definition of an “employer” under the NYSHRL is expanded from New York employers with four or more employees to include an employer of any size.

Statute of Limitations

As of August 12, 2020, the limitations period for asserting a claim of sexual harassment under the NYSHRL is expanded from one year to three.

• Practice Pointer: Employers are reminded to review all employment-related agreements to ensure that the required carve-out from non-disclosure/confidentiality provisions is included. 

Testing for Cannabis

Effective May 10, 2020, most employers in New York City will no longer be allowed to require applicants submit to a pre-employment test for cannabis. A previous analysis on this legislation can be found here.

The legislation expands the scope of the NYCHRL’s prohibitions on making pre-employment inquiries, which already preclude employers from seeking information about applicants’ criminal conviction, credit, and salary histories.

The New York City Commission on Human Rights, the agency charged with enforcement of the NYCHRL, has the authority to impose up to $250,000 in sanctions for intentional violations of the law.

Some exceptions to the law include certain:

• Law enforcement positions,
• Positions requiring supervision of children and medical patients,
• Positions requiring a CDL,
• Positions requiring federal drug testing, and
• Federal/state contractor positions.

Additionally, the law will not bind employers who are a party to a collective bargaining agreement that "specifically addresses" the drug testing of applicants, but only as to those employees.

We emphasize that this law applies solely to pre-employment testing of applicants, as it makes no reference to current employees. Thus, employers may still prohibit cannabis use at work, conduct reasonable suspicion testing of current employees and testing that arises out of an accident involving a current employee, and discipline employees for working while impaired.

However, employers in New York City are reminded of their obligation under NYC law to engage in a cooperative dialogue with disabled individuals who may be in need of reasonable accommodation, which may include certified users of medical cannabis.

• Practice Pointers:
  
  • Current New York state law considers certified users of medical marijuana as having a disability under the NYSHRL, entitled to all the legal protections of other employees and applicants with disabilities.
  • New York City employers that conduct pre-employment tests for cannabis may continue to do so until May 10, 2020, the effective date of the recent legislation. However, their testing practices should be adjusted accordingly in anticipation of that effective date.
  • Businesses utilizing third-party staffing agencies or professional employment organizations should confirm that those entities’ pre-employment screening practices are consistent with New York City law.
  • Similarly, businesses should review their agreements with testing labs to ensure that the labs with which they contract do not screen for cannabis as a matter of course.

Paid Sick and Safe Time Leave

As previously summarized, Westchester County has joined the growing list of jurisdictions guaranteeing the vast majority of employees paid sick and safe time leave.

Effective October 30, 2019, virtually all employees who work in Westchester County for more than 90 days in a calendar year are entitled to 40 hours of paid safe time leave under the Safe Time Leave Law (STLL). Under the STLL, starting on or before January 28, 2020, all employers must provide employees a copy of the STLL (here) and a written notice of the law (here).

Moreover, employers must display in a conspicuous location a copy of the STLL and a poster in English, Spanish and any other language deemed appropriate by the County (this posting has yet to be published).

Conclusion

Compliance with the draft of new New York legislation should be on every employer’s list of New Year’s resolutions.