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New York Employment Updates for the New Year

In late 2023, New York lawmakers and regulators passed numerous laws and published regulations governing New York employers.  Among other things, employers should be aware of expanded obligations regarding sick and safe leave, employing freelance workers, confidentiality agreements and updates to the New York state minimum wage and pay frequency requirements.  Many of these laws became effective in 2023, while others will go into effect in the first half of 2024.    

Effective Late 2023


Employee Invention and Intellectual Property Rights

A new provision of the New York Labor Law (“NYLL”) specifies that inventions and intellectual property developed entirely on an employee’s own time—without using an employer’s property or trade secrets—belong to the employee.  As of September 15, 2023, any invention assignment provision that requires employees to assign inventions developed without excluding inventions developed during their own time and with their own property is unenforceable.  However, the law provides an exception for inventions that relate to the employer’s business, the “actual or demonstrably anticipated research of the employer,” or from work performed by the employee in the course of their work for the employer.


Restrictions on Liquidated Damages Provisions in Confidentiality Agreements

Section 5-336 of the New York General Obligations Law (“Section 5-336”) was amended to restrict certain terms from being included in release agreements involving discrimination, harassment, and retaliation claims.  The amendments apply to all agreements entered into on or after November 17, 2023.


The law prohibits such settlement agreements from:

  • Requiring a complainant to pay an employer liquidated damages in the event they violate a nondisclosure or non-disparagement provision;

  • Requiring a complainant to forfeit all or part of the consideration received as part of the settlement for violating a nondisclosure or non-disparagement provision;

  • Containing an affirmative statement that a complainant was not subject to discrimination or retaliation.


As before, Section 5-336 prohibits employers from requiring a nondisclosure provision in a release agreement involving claims of discrimination, unless confidentiality is the employee’s preference and the employee is given 21 days to consider the agreement and 7 days to revoke.  Under the amendment, this requirement now applies to independent contractors who settle discrimination claims – not just employees.  Further, complainants are now permitted to waive the 21-day consideration period for nondisclosure provisions in pre-litigation agreements.  However, any confidentiality agreements related to discrimination claims filed in court are governed by the New Yor State Civil Practice Rules and Law and, as such, the 21-day period cannot be waived.


Prohibition on Captive Audience Meetings

As of September 6, 2023, the NYLL prohibits employers from disciplining employees for refusing to attend employer-sponsored meetings, listen to speeches, or watch presentations if the primary purpose is to communicate the employer’s opinion concerning “religious or political matters.”  “Political matters” is defined under Section 201-d(1)(d) of the NYLL as matters relating to elections for “political office, political parties, legislation, regulation and the decision to join or support any political party or political, civic, community, fraternal or labor organization political party or political advocacy group.”  “Religious matters” are defined as matters “relating to religious affiliation and practice and the decision to join or support any religious organization or association.”  “Casual conversations” between an employer and employee are not prohibited, so long as the employee is not required to participate.


The law also contains a posting notice requiring employers to post a sign in every workplace apprising employees of their rights under Section 201-d.


Criminal Liability for Wage Theft

As of September 6, 2023, the criminal code now includes any failure to pay wages (including any “promised wage” beyond minimum wage or overtime) as larceny.  The law increases criminal penalties against employers for wage theft by allowing prosecutors to aggregate multiple nonpayments or underpayments into one larceny count, including for multiple victims and across multiple counties.  If the aggregated amount not paid exceeds $1,000, that crime will constitute grand larceny in the fourth degree – a Class E felony.  Conviction for a Class E felony can result in up to four years of imprisonment.  Failure to pay aggregate wages exceeding $1,000,000 could result in even longer sentences, not to exceed a maximum sentence of 25 years.  However, employers may be able to rely on the larceny statute’s “intent to deprive” requirement as a defense to any prosecution if their failure to comply with the NYLL was unintentional.


Updates to New York City’s Earned Safe and Sick Time Act (“ESSTA”)

Effective October 15, 2023, the NYC Department of Consumer and Worker Protection adopted final rules to the ESSTA, which requires employers to provide covered employees with paid safe and sick leave.  Under the new rules, employers must count all employees nationwide when calculating employer size for purposes of the safe/sick leave law, and include all full-time and part-time employees, jointly employed workers, and employees on leave.  An employee is eligible for sick/safe leave under the law based on work physically performed in New York City – even if they are telecommuting from within the five boroughs.  Employers may require prior notice of foreseeable absences and reasonable documentation for the use of safe/sick leave so long as these requirements are adequately included in their written leave policy.  The written leave policies must also affirmatively inform employees that any information the employer receives regarding the employee’s use of safe/sick leave will be kept confidential and will not be disclosed to anyone without the employee’s written permission (or as required by law).  The updated rules also provide guidance on complying with the ESSTA’s pay statement requirements, particularly when an employer uses an electronic system to issue pay statements.  Failure to maintain adequate records of employee safe/sick time use and balances now gives rise to a “reasonable inference” that the employer violated the ESSTA.


Unemployment Benefits Notice

As of November 13, 2023, the NYLL was expanded to require that employers provide written notice of an employee’s right to file for unemployment insurance benefits under additional circumstances.  In addition to providing such notice at the time of termination or resignation, employers must now provide notice any time an employee experiences an “interruption of continued employment that results in total or partial unemployment.”   The threshold of partial unemployment eligibility is working at least 30 hours in a week or having earned at least $504 in a week.


This notice will be required regardless of the impact on an employer’s unemployment insurance payments.  Employers should use the updated form on the DOL’s website.

Effective 2024


Increase in Minimum Wage and Overtime Exemption Minimum Salary

On December 27, 2023, New York State formally adopted regulations increasing the thresholds for minimum wage and overtime exemptions for employees classified as exempt under the New York Labor Law.  The increased thresholds will go into effect on January 1, 2024.          

 

NYC, Long Island, and Westchester

Rest of New York State

2024

$1,200.00/week

($62,400.00/year)

 

$1,124.20/week

($58,458.40/year)

2025

$1,237.50/week

($64,350.00/year)

 

$1,161.65/week

($60,405.80/year)

2026

$1,275.00/week

($66,300.00/year)

$1,199.10/week

($62,353.20/year)

 

New York State Social Media Access Law

Effective March 12, 2024, employers are prohibited from requesting applicants’ and employees’ social media accounts.  The law will prohibit employers from requesting or requiring employees or applicants to:

  • Disclose usernames or passwords to a personal social media account;

  • Access their personal social media account in the employer’s presence;

  • Reproduce photos, videos or other information contained in a personal social media account obtained by prohibited means.


An applicable account under this law is defined as any account or profile on an electronic medium “where users may create, share, and view user-generated content” that is used exclusively for personal purposes. 

The law contains exceptions for:

  • Accounts provided by the employer that are used for business purposes.

  • Accounts known to the employer to be used for business purposes.

  • Access to an “electronic communications device” paid for by the employer where “the provision of or payment for such electronic communications device was conditioned on the employer’s right to access such device and the employee was provided prior notice of and explicitly agreed to such conditions.”

  • Access pursuant to a court order.


The law will not prohibit employers from accessing information about an employee or applicant that is available in the public domain or accessing information voluntarily shared by an employee in the course of investigating misconduct.


Increase in Pay Frequency Exemption Minimum Salary

Guidance under the NYLL has long held that “manual workers” are defined as employees that spend at least 25% of their working time engaged in physical labor.  Such workers must be paid weekly under the law, and recent decisions have held that employees have a private right of action to seek liquidated damages for failure to make timely payments under the NYLL (i.e., unlawfully paying on a bi-weekly basis when the law requires weekly payments).


However, employers may be exempt from the weekly pay frequency requirement for persons employed as a “clerical or other worker” under the NYLL.  Under the law, such workers are defined as “any person employed in a bona fide executive, administrative or professional capacity” earning a statutorily defined minimum salary.  In an amendment to the law, that minimum salary increased to $1,300 per week or $67,600 per year – a substantial increase from the prior minimum salary of $900 per week or $46,800 per year.


The amendment is effective March 14, 2024.  Employers should note that this exemption is distinguished from the laws governing minimum wage and overtime requirements, as described above.


Freelance Worker Protections

Effective May 20, 2024, a new provision of the NYLL will create protections for independent contractors in New York State akin to the New York City’s Freelance Isn’t Free Act.  The law provides wage and job protections for independent contractors, but excludes construction contractors.


Under the law, companies who enter into covered agreements with independent contractors must reduce the terms of their agreement to writing, provide a written copy to the worker, and include the following minimum information in the contract:

  • The name and mailing address of both the hiring party and independent contractor;

  • An itemization of all services to be provided by the independent contractor, the value of these services, and the rate and method of compensation;

  • The date on which the hiring party must pay the contracted person compensation, or how such date will be determined (if not specified, payment must be made no later than 30 days after the completion of the freelance worker’s services);

  • The date by which the independent contractor must submit a list of all services rendered to meet any payment processing deadline of the hiring party.


Companies are required to keep a record of these contracts for at least six years, and a failure to produce a freelance contract upon request by the NYDOL gives rise to a presumption that the terms presented by the independent contractors are the agreed upon terms.  Employers may be liable for civil penalties and other statutory damages for failure to maintain adequate records or produce a compliant written contract.  The law also provides a cause of action for intimidation, harassment, or discrimination for exercising their rights under the law, subject to a six-year statute of limitations.  Liquidated damages and attorney fees are available for a plaintiff who prevails on claims regarding failure to timely pay for services owed or retaliation.


The law only applies to contracts entered on or after May 20, 2024.


Extended Statute of Limitations Under the NYSHRL

Effective February 15, 2024, the statute of limitations for filing a charge of unlawful discrimination with the New York State Division of Human Rights will be extended from one year to three years for all claims of alleged unlawful discriminatory practices under the New York State Human Rights Law. Previously the three year statute of limitations was only for sexual harassment claims.


Next Steps

Employers with New York-based employees are encouraged to review their employee handbooks, employee postings, and employment policies, including hiring policies, drug use policies, and leave policies, to ensure compliance with new laws.

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