Developments in Employment Law as We Head Into 2023

As we head into a new year, it is important for employers to be aware of and plan for developments in various areas of employment law that have recently taken effect or will take effect in 2023. This alert highlights those changes, including (1) expanded protections for employees; (2) New York’s new gun laws; (3) wage and hour developments; and (4) COVID-19 updates. This alert also covers what employers can do to prepare for these developments.

Expanded Protections for Employees

New York Adult Survivors Act, Effective Nov. 24, 2022: S.66A/A.648A

On May 24, 2022, Governor Kathy Hochul signed into law the Adult Survivors Act. The law provides that “every civil claim or cause of action brought against any party alleging intentional or negligent acts or omissions by another party for physical, psychological, or other injury or condition suffered as a result of conduct which would constitute” a “sexual offense” (as defined by Article 130 of the Penal Law) or incest, and that would otherwise be time-barred because of the applicable statute of limitations and/or the plaintiff’s previous failure to file a notice of claim or intention to file a claim, “is hereby revived.” The sexual offenses described in Article 130 all involve physical contact of some kind without consent. Under the new law, such plaintiffs may commence an action between Nov. 24, 2022, and Nov. 24, 2023. Prior dismissals of actions on the basis of being time-barred or because plaintiff failed to file a notice of claim or intention to file a claim are not grounds for dismissal of a revival action under the new law.

In effect, the new law creates a one-year window for sexual assault survivors to sue individuals or their estates, as well as alleged enabling institutions and businesses, regardless of when the incident occurred. This is similar to the Child Victims Act passed in 2019, which yielded thousands of lawsuits, by also providing a window of time for survivors of childhood sexual abuse to file civil claims that were past the statute of limitations.

Lawsuits have already been filed under the new law, and we expect them to increase in numbers, especially because the law permits businesses and institutions to be held responsible, including for psychological injury, which carries a risk of high damages awards. Some of the more high-profile cases, for example, are the lawsuits being brought against financial institutions accusing them of ignoring alleged sex trafficking by Jeffrey Epstein. In another, five women have sued a major media company and two production companies, accusing them of negligence in connection with Bill Cosby’s alleged sexual misconduct during the filming of his shows in the early 1990s. These and other cases demonstrate the law’s far-reaching effects and in particular the potential effect it will have on private employers.

New York State Sexual Harassment Hotline, Effective July 14, 2022: S.812B/A.2035B

All employers in New York State, regardless of their size, are required to provide information about New York State’s Division of Human Rights’ (NYDHR) sexual harassment hotline in any materials they are required to provide to employees regarding sexual harassment. The information must be provided in English as well as the employee’s primary language if it is Spanish, Chinese, Korean, Polish, Russian, Haitian-Creole, Bengali or Italian. The hotline itself is a toll-free confidential hotline operated by the NYDHR that provides access to pro bono counsel.

The hotline information is as follows: 1-800-HARASS-3 (1-800-427-2773), Monday – Friday from 9 a.m. until 5 p.m.

Employers are already required under state law to adopt a sexual harassment policy and conduct sexual harassment prevention training for employees on an annual basis. Both of those items should therefore be updated to include the hotline information. In addition, employers should update any other sexual harassment policies they have, including those required under the New York City Human Rights Law, such as in a handbook or postings, to include the hotline information. As with the mandatory policy and training required under state law, although employers are not required to obtain signed acknowledgment from their employees that they received the hotline information, it is encouraged. By contrast, under city law, employers must keep a record of employees’ training for at least three years. Helpful guidance and FAQs regarding the requirements to maintain a sexual harassment policy and conduct sexual harassment prevention training can be found here on New York State’s website and here on the city’s website. Note that New York State is in the process of reviewing its Model Sexual Harassment Prevention Guidance (as required by law every four years) and has indicated plans to produce a revised model sexual harassment policy.

Protections for Nursing Employees, Effective June 7, 2023: S.4844B/A.1236A

The current New York State law protecting nursing employees requires employers to provide reasonable unpaid time to permit employees to nurse for up to three years following childbirth and prohibits discrimination against such employees who nurse in the workplace. The current law also provides that employers shall make “reasonable efforts” to provide a lactation room or location.

As amended, effective June 7, 2023, the law requires employers to designate a lactation room or location upon request from an employee to nurse in the workplace, bringing it in line with New York City laws. The law has several requirements for the location:

• The location must be (1) in close proximity to the work area; (2) well lit; (3) shielded from view; and (4) free from intrusion.
• The location must include, at a minimum, a chair, a working surface, nearby access to clean running water and, if the workplace has electricity, an electrical outlet. The location cannot be a restroom or toilet stall.
• If the location is not used solely for nursing, it must be made available to nursing employees when needed and cannot be used for any other purpose while it is being used for nursing. Employers must provide notice as soon as practicable when the location is being used for nursing.
• If the workplace has access to refrigeration, employers must extend access for the purpose of storing expressed milk.

The above requirements are nearly identical to the ones under city Local Law Int. 2018/185, except the new state law applies to all employers regardless of size, whereas the city law applies only to employers with four or more employees. Under the new state law, when an employer can demonstrate that providing such a location would be impracticable because it would impose an undue hardship, that employer is only required to make reasonable efforts to provide a nursing location. In contrast, if a city employer is unable to comply with the city law because it poses an undue hardship, it is required to engage in a cooperative dialogue to determine what, if any, accommodations may be available and provide a written notice at the conclusion of that process regarding whether any accommodation was granted or denied.

Under the new state law, employers will be required to update their written policies to reflect changes to the law and must provide such written policies to employees upon hiring and annually thereafter, as well as to employees returning to work following the birth of a child. Specifically, the policy must:

• Inform employees of their rights under the law.
• Specify the means by which a request may be submitted for a lactation room or location.
• Require the employer to respond within a reasonable time frame not to exceed five business days.

City employers are already required under Local Law Int. 2018/186 to have a written lactation policy that is similar to the one that will be required under state law, but it must also include a procedure for when two or more employees need to use the lactation room and state that if a request to use the room would pose an undue hardship, there shall be a cooperative dialogue with the requesting employee. City law only requires employers to disseminate their lactation policy upon hiring.

Employers in the city are required to comply with both state and city law. In preparation for when the law takes effect, employers should review and amend their existing lactation policies as necessary to ensure compliance with the laws’ requirements and take steps to create a compliant lactation room or location.

Protection Against Lawful Absences From Work, Effective Feb. 19, 2023: S.1958A/A.8092B

On Nov. 21, 2022, Gov. Hochul signed into law an amendment to Section 215 of the New York Labor Law that protects employees against retaliation for taking legally protected time off by targeting points-based attendance policies, or “no-fault” attendance rules, that assign penalty points for absences regardless of the reason for the absence. Usually, when an employee incurs a certain number of penalty points under these policies, the employee may be discharged or otherwise disciplined. These policies potentially run the risk of misleading employees into thinking they cannot take time off even if it is legally protected, and employers who strictly enforce such policies may be violating laws that provide protected time off, such as the Family and Medical Leave Act, Americans with Disabilities Act, New York Paid Family Leave Law, New York State Paid Sick Leave Law and New York City Earned Safe and Sick Time Act.

The law provides that an employer cannot “threaten, penalize, or in any other matter discriminate or retaliate” against any employee “because such employee has used any legally protected absence pursuant to federal, local, or state law.” The law also expressly provides that employers may not assess “any demerit, occurrence, or any other point, or deduction from an allotted bank of time, which subjects or could subject an employee to disciplinary action, which may include but not be limited to failure to receive a promotion or loss of pay.”

In practice, the new law should not have a significant effect on what should be employers’ current practices because federal, state and city leave laws generally have anti-discrimination and retaliation provisions. The new law, however, makes expressly clear that it is deemed retaliatory and illegal for no-fault attendance policies to be applied to absences taken on the basis of legally protected leave. And, employers with no-fault attendance policies should carefully consider how they assess demerits against employees who take legally protected leave or leave that is related to legally protected leave in order to ensure that the application of such policies is not retaliatory.

Expanded Paid Family Leave, Effective Jan. 1, 2023: S.2928A/A.6098A

On Nov. 1, 2021, Gov. Hochul signed a new law extending the New York Paid Family Leave law to the care of siblings with a serious health condition by expanding the definition of “family member” to include “sibling.” The law already covers spouses, domestic partners, children, stepchildren, parents, parents-in-law, grandparents and grandchildren. “Sibling” is defined as a biological or adopted sibling, a half-sibling or a stepsibling. The new law takes effect on Jan. 1, 2023. Notably, siblings are not covered by the federal Family and Medical Leave Act.

Employers in New York should ensure that their leave policies reflect this expansion.

Automated Employment Decision Tools, Effective Jan. 1, 2023, With Enforcement Beginning on April 15, 2023: Local Law Int. 2021/144

As we previously reported, effective Jan. 1, 2023, employers (and employment agencies) in New York City cannot use automated employment decision tools (AEDT) (such as artificial intelligence) to screen job candidates for employment or promotion in the city unless the technology has been subject to an annual “bias audit.” The law will not be enforced until April 15, 2023.

AEDTs that fall within the scope of the law are defined as computational processes that issue simplified outputs (e.g., scores) that are used to “substantially assist or replace discretionary decision making for making employment decisions.” A bias audit, defined as an impartial evaluation by an independent auditor that evaluates the relevant AEDT for its disparate impact on the basis of race/ethnicity and sex, must be conducted no more than one year prior to the use of the AEDT. Employers must also publish a summary of the results of the audit and the distribution date of the AEDT subject to the audit on their public website before the AEDT can be used.

Employers and agencies will also be required to disclose to employees and candidates who apply for a position or promotion and reside in the city whether an AEDT will be used in their assessment or evaluation at least 10 business days before the AEDT’s use and allow an employee or candidate to request an alternative selection process or accommodation. In addition, employers must also notify employees and candidates who reside in the city about the job qualifications and characteristics that the AEDT will assess at least 10 business days before use. In effect, these requirements mean that there will have to be a 10-business-day waiting period before an employer can move forward with a candidate in applying the AEDT. Candidates and employees who reside in the city are also entitled to, within 30 days of written request and if not already disclosed on the employer’s or agency’s website, information about the type of data collected for the AEDT, the source of such data and the employer or employment agency’s retention policy unless disclosure of this information would violate the law or interfere with a law enforcement investigation.

Violations of the law could result in a $500 fine for the first violation and up to $1,500 for subsequent violations, and enforcement is vested in the corporation counsel or such other persons designated by the counsel. The law does not prohibit a private right of action.

On Sept. 23, 2022, the New York City Department of Consumer and Worker Protection (DCWP) published proposed rules to implement the law. Among many other points of clarification, the rules provide that for an AEDT to “substantially assist or replace” employers’ decisions and thus fall within the law’s requirements, the employer must be (1) relying solely on a simplified output (e.g., a score, tag, classification, ranking) with no other factors considered; (2) using the output as one set of criteria that is weighted more than any other; or (3) using the output to overrule or modify conclusions derived from other factors like human decision-making. The rules also prescribe that a bias audit must include, at minimum, a “selection rate” for each classification group analyzed by the AEDT and the “impact ratio” for each category. The selection rate means the rate at which individuals in a category are selected to move forward or assigned a classification. The impact ratio calculates predicted success based on the candidate’s category. Finally, the rules provide that employers can comply with the law’s notice requirements for candidates by posting that they use an AEDT on their careers or jobs website (or in a written policy for current employees), in a job posting or by mail. Notably, the rules do not comment on the standard(s) for when an applicant is entitled to an alternative selection process or accommodation.

On Dec. 12, 2022, the DCWP announced that it would not enforce the law until April 15, 2023, due to the high volume of public comments received. There will be a second public hearing before the DCWP issues final regulations. In the meantime, employers should assess whether the hiring and promotion tools they use fall within the definition of an AEDT under the law, and if they do, conduct an independent bias audit. Employers conducting an audit, especially for the first time, should consult counsel to ensure the audit is conducted in accordance with the law and rules.

New York’s Gun Laws, Effective Sept. 1, 2022: S.51001/A.41001

On July 1, 2022, Gov. Hochul signed into law restrictions on possession of weapons in specified locations following the Supreme Court’s decision in NYSRPA v. Bruen. The portion of the law concerning employers is as follows:

A person is guilty of criminal possession of a weapon in a restricted location when such person possesses a firearm, rifle, or shotgun and enters into or remains on or in private property where such person knows or reasonably should know that the owner or lessee of such property has not permitted such possession by clear and conspicuous signage indicating that the carrying of firearms, rifles, or shotguns on their property is permitted or has otherwise given express consent.

As such, unless an employer expressly consents to the carrying of a weapon on its premises or posts conspicuous signage indicating that carrying a weapon is permitted, an employer’s private premises will be considered a “restricted location” under the law for which possession of a weapon is a criminal offense. Even though the default under the law is that an employer’s private premises will be considered a “restricted location,” employers should consider a written policy affirmatively prohibiting weapons on their premises. It should be noted that there have been constitutional challenges to the law, but as of the date this alert was published, the law remains intact.

Wage and Hour

New York’s Pay Transparency Laws: New York State, Effective Sept. 17, 2023: S.9427A/A.10477; New York City, Effective Nov. 1, 2022: Local Law Int. 2022/059

Today Gov. Kathy Hochul signed a new law amending Section 194-b of the New York Labor Law that requires employers in New York State to list the compensation range and job description (if one exists) in job advertisements and postings regarding promotion and transfer opportunities for positions that can or will be performed, at least in part, in the state of New York. The new law also requires that postings include a general statement that compensation is based on commissions if applicable to such position. In addition, employers must maintain records documenting the history of compensation ranges for each job, promotion or transfer opportunity, as well as the associated job descriptions.

Consistent with today’s development, and as we discussed in a prior alert, pay transparency laws are on the rise across the country, including the one in New York City that went into effect on Nov. 1 and was also the subject of a prior alert. The city law is similar to the new state law. Both require covered employers (including employment agencies) that post a job, promotion or transfer opportunity for a position that can or will be performed in the city/state to include the annual salary or salary range for the position and/or the minimum and maximum hourly wage that the employer in good faith believes at the time it will pay for such position. Importantly, remote jobs that can be performed in the city or state, even if the employer does not have a physical presence there, are covered by the city and state laws’ requirements.

There are, however, some differences. The city law applies to all employers (and employment agencies), while the new state law only applies to employers with four or more employees (and agencies regardless of size). In addition, state law requires the posting of a job description, if one exists, and a statement that compensation will be based on commissions if the opportunity is paid on commission. State law also has a record-keeping requirement. The city law does not have either of these requirements. Employers in New York City are required to comply with both laws.

In addition, the only people who can bring a claim based on a violation of the city law are current employees (not applicants) who bring an action against their employer for advertising a job, promotion or transfer opportunity without posting a minimum and maximum hourly wage or annual salary. And, if an employer cures any violation within 30 days after receiving notice from the New York City Commission on Human Rights by modifying the posting, no administrative penalty applies; however, if accepted by the commission, the submission of proof of a cure will be deemed an admission of liability by the employer. In contrast, under the new state law, any person claiming to be aggrieved by the law can file a complaint with the New York State commissioner of labor, and an employer found to be in violation shall pay a civil penalty of $1,000 for a first-time violation, $2,000 for a second or $3,000 for a third or subsequent violation.

There have been some lessons learned since the city law went into effect. There initially were reports of mixed results and impracticably large ranges being posted in the early days after the city law became effective (for instance, there was reportedly a job listed with a range beginning at $0). But nearly two months later, employers seem to be finding firmer footing. Notably, a growing number of employers have been reported to be adopting nationwide pay transparency policies given the increasing number of these types of laws across the country and now in the state of New York.

Minimum Wage Rates in New York, Effective Dec. 31, 2022: 12 NYCRR 142, 12 NYCRR 146

The minimum wage everywhere outside of New York City, Long Island and Westchester will increase effective Dec. 31, 2022, to $14.20 an hour. The minimum wage in New York City, Long Island and Westchester continues to be $15 per hour.

Under the Hospitality Wage Order, employers can continue to apply a tip credit, but standards differ depending on whether the employee is a “service employee” or a “food service worker.” Employers must directly pay service employees and food service workers at least the Minimum Cash Wage and cannot claim a tip credit that exceeds the Maximum Tip Credit. Additionally, for service employees, employers’ ability to claim the tip credit depends on the employees' weekly tip average equaling at least the hourly Tip Threshold (higher for employees at resort hotels) and their direct wage plus tips equaling or exceeding the minimum wage.

The wage rates as of Dec. 31, 2022, are as follows:

Effective Oct. 1, 2022, the minimum wage for home care aides increased by $2 above the minimum hourly wage.

Update on NYC’s Pay Transparency Law, Effective Nov. 1, 2022: Local Law Int. 2022/059

As we discussed in a prior alert, pay transparency laws are on the rise across the country, including the one in New York City that went into effect on Nov. 1 and was also the subject of a prior alert. The city law requires covered employers that post a job, promotion or transfer opportunity for a position that can or will be performed in the city to include a salary range for the position and/or the minimum and maximum hourly wage that the employer in good faith believes at the time it will pay for such position. Importantly, remote jobs that can be performed in the city, even if the employer does not have a physical presence in the city, are covered by the law’s requirements.

There were reports of mixed results and impracticably large ranges being posted in the early days when the law became effective (for instance, there was reportedly a job listed with a range beginning at $0). But nearly two months later, employers seem to be finding firmer footing. Notably, a growing number of employers have been reported to adopt nationwide pay transparency policies given the increasing number of these types of laws across the country.

It is expected that a similar state law (S.9427A/A.10477), currently sitting on Gov. Hochul’s desk, will take effect sometime in late 2023 (it takes effect 270 days after her approval). That law contains three additional requirements with which city employers would have to comply: (1) a posting must include a job description if one exists; (2) a posting must include a general statement that compensation is based on commission, if applicable to such position; and (3) employers must keep and maintain records of compensation history for posted jobs, promotions and transfer opportunities.

Workplace Posters: S.6805/A.7595

Gov. Hochul is expected to sign into law an amendment to Section 201 of the New York Labor Law, which changes the requirements concerning workplace posters. The law requires that workplace posters and any other documents required to be physically posted at a worksite under state or federal law also be made electronically available to employees on the employer’s website or by email. The law also requires that employers provide notice that such documents are available electronically. The law takes effect immediately upon her signature. 

Proposed Independent Contractor Rule

On Oct. 13, 2022, the United States Department of Labor proposed a new rule on classifying workers as independent contractors under the Fair Labor Standards Act. The rule embraces a totality of the circumstances analysis to make the ultimate determination regarding to what extent the worker is economically dependent on the employer and sets forth six “economic reality” factors, which are not exhaustive: 

1. Opportunity for profit or loss depending on managerial skill: When the worker can determine or meaningfully negotiate their pay, accept or decline jobs, choose the order and time in which they perform jobs, engage in efforts to expand their business, or make hiring decisions, independent contractor status is favored. But if the worker has no opportunity for a profit or loss, then it would suggest the worker is an employee. Critically, a worker volunteering to take on more hours or tasks does not indicate managerial skill and thus independent contractor status.
2. Investments by the worker and the employer: When a worker’s investments are capital or entrepreneurial in nature, such as increasing the worker’s ability to do different or more types of work or extending market reach, and they would generally support an independent business and serve a businesslike function, independent contractor status is favored. However, the mere fact that workers bear the cost of tools and equipment to do their job does not make them independent contractors.
3. Degree of permanence of the work relationship: When a work relationship is for a definite duration, nonexclusive, project-based or sporadic, then independent contractor status is favored. Workers can be independent contractors if they work for fixed periods of time, but seasonal or temporary work on its own would not necessarily indicate independent contractor status.
4. Nature and degree of control: When the employer sets workers’ schedules, supervises their performance or explicitly limits their ability to work for others, employee status is favored. The proposed rule lists several other indicia of control that may be considered. Importantly, the employer requiring that a worker comply with legal obligations may be indicative of control and thus employee status.
5. Extent to which the work performed is an integral part of the employer’s business: When the work function performed (not the worker themselves) is not critical, necessary or central to the employer’s principal business, independent contractor status is favored.
6. Skill and initiative: When workers use specialized skills and do not depend on training from the employer, independent contractor status is favored because it evidences that the workers are using their specialized skills in connection with a businesslike initiative.

The proposed rule also sets forth that additional factors may be relevant if they “in some way indicate whether the worker is in business for themselves, as opposed to being economically dependent on the employer for work.”

Public comment was due on Dec. 13, 2022, and the submissions were voluminous, which suggests it will be some time before a final rule is issued. Only then can courts look to the rule as an interpretive guide.

COVID-19

The ever-changing landscape of requirements that employers grappled with during the COVID-19 pandemic may be waning, but some are still in effect. First and foremost, New York paid vaccination leave has been extended until the end of 2023. Under the law, employers must provide employees with “a sufficient period of time, not to exceed four hours” of paid leave per COVID-19 vaccination and booster dose at the employee’s regular rate of pay, which must be in addition to regular leave accrual. Second, employers in New York are still required to provide at least five or 14 days (depending on employer size) of job-protected, paid COVID-19 sick leave to employees who need to take leave because they are under a mandatory or precautionary order of quarantine or isolation due to COVID-19. Such employees must submit documentation of an order of isolation by the State of New York, the Department of Health or local board of health or by using this form from New York State. Third, employers must provide paid leave to employees who need to care for a minor dependent child under a mandatory or precautionary order of quarantine or isolation due to COVID-19 for the duration of that period. Such employees must be unable to work via remote access or other means and must provide documentation of the mandatory or precautionary order of quarantine or isolation. Finally, masks are still required in health care facilities, among other requirements in such facilities.

Many laws and requirements are, however, no longer in effect. There is no vaccination or mask requirement in New York City for any activity, though businesses can still choose to require them for patrons and employees. There is also no requirement in New York State to conduct daily screenings of employees because effective March 17, 2022, the New York State commissioner of health ended the designation of COVID-19 as an airborne infectious disease under the New York HERO Act. However, state employers are still required to have an airborne infectious disease prevention plan that is provided to employees within 30 days of its creation and to new employees upon hire, as well as posted in the workplace and in their handbook.

For questions or concerns regarding any of the issues raised in this alert, please contact a member of Kramer Levin’s Employment Law Department.