New York City Bans Employer Inquiries Into Salary History

On May 4, 2017, New York City Mayor Bill DeBlasio signed a law amending the New York City Human Rights Law, barring all public and private New York City employers from asking job applicants about their prior wages and salary history.  The law will take effect on Tuesday, October 31, 2017. The new law makes it an unlawful, discriminatory practice for an employer to inquire about or rely upon the salary history of a job applicant to determine their salary amount during the hiring process.

The salary inquiry law bans New York City employers from:

  • Making an inquiry, either verbally or in writing, to an applicant and/or the applicant’s current or prior employer, to obtain the applicant’s salary history;
  • Searching public records for an applicant’s salary history; and/or
  • Relying on a job applicant’s salary history when making an offer of employment or extending an employment contract to the applicant.

Salary history is broadly defined in the bill as the applicant’s “current or prior wage, benefits or other compensation.”  However, salary history inquiries do not include inquiries into the objective measure of the applicant’s productivity, for example, through inquiries on revenue, sales, or production reports.  Further, employers may still discuss the applicant’s salary and benefits expectations, including the amount of unvested equity and deferred compensation an applicant would forfeit through resignation from his or her current employment.

The law contains several other exceptions to the prohibition on salary inquiries, which include the following:

  • Employers can consider and verify an applicant’s salary history if the applicant discloses the information voluntarily and without prompting;
  • Where federal, state, or local law specifically authorizes the disclosure or verification of salary history;
  • Where salary is determined by procedures in a collective bargaining agreement;
  • When current employees are transferred or promoted within the company; and
  • When a background check for non-salary related information inadvertently discloses salary history, provided the employer does not rely on that information in making an offer of employment.

The New York City’s Commission on Human Rights (NYCCHR) will be responsible for investigating complaints and enforcing the new law.  The NYCCHR will also have the authority to impose fines ranging from up to $125 for intentional violations and up to $250,000 for intentional malicious violations.

New York City employers must start to update their employment applications and train their recruiters and human resources personnel on the new requirements to ensure compliance by the October 31, 2017 deadline.  Employers may also be forced to limit the scope of their background checks and revise their notices under the Fair Credit Reporting Act.

For questions on this new law, background check laws, or other employment and hiring requirements, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resource Training & Audit Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Union Fund Uses NY False Claims Act to Blow Whistle on Prevailing Wage Violator and Recover $33,750

In the first reported case of its kind in New York, in February a union fund received a five-figure settlement payment from a Harlem-based general contractor that worked on a New York City affordable housing project after the fund blew the whistle on the contractor’s failure to pay prevailing wages. The fund filed a whistleblower complaint under the N.Y. False Claims Act, which allows a whistleblower to file a qui tam lawsuit if it knows of and reports violations of the Act. The Act makes liable entities that knowingly present to the state or local government false or fraudulent claims for payment or avoid their obligations to pay the state or a local government. State of New York v. A. Aleem Construction, Inc.

A whistleblower that files a successful claim under the Act can recover 15 to 25 percent of any recovery if the State intervenes in the matter and converts the qui tam action into an attorney general enforcement action. If no State intervention, the whistleblower can recover between 25 and 30 percent of the total recovery. New York is among 29 states, including New Jersey, plus D.C. that offer an incentive payment or “bounty” to persons who blow the whistle on prevailing wage violators. A whistleblower who plans or initiates the violation that is the basis of the action can recover but in a reduced amount.

The union fund’s whistleblower complaint caused the State to investigate and determine that the general contractor violated prevailing wage laws by failing to pay laborers working on the project the required prevailing wages and benefits and failing to maintain proper payroll records. Under the settlement, the general contractor agreed to pay $225,000 to resolve the Action, $33,750 of which, or 15%, was paid to the fund.

The bounty paid to the union fund for reporting to the State violations of prevailing wage laws serves as another wake-up call to the employer community that claims for violations of prevailing wage laws can come from various sources including even the unions and their funds that negotiate and benefit from the wages and benefits, and the added incentive of a bounty in exchange for blowing the whistle is likely to encourage more unions and their funds to follow suit. In addition, on February 21 the U.S. Supreme Court reversed the 2nd Circuit Court of Appeals’ dismissal of a 2011 suit brought under the federal False Claims Act by two former Wells Fargo employees who sought damages on behalf of taxpayers for fraud occurring during their employment with the bank. The Court vacated the dismissal of the lawsuit and in the process endorsed broader support for whistleblower claims at the federal level. Bishop v. Wells Fargo & Co. The federal False Claims Act provides similar encouragement, not limited to employees, to blow the whistle on violators of the Davis-Bacon Act.

If you have any questions or would like to discuss how these state and federal whistleblower protections apply to your employees and your business, please contact Patrick W. McGovern, Esq., Partner in the Firm’s Wage and Hour Compliance Practice Group and  at 973-535-7129 or at pmcgovern@nullgenovaburns.com.

New York State Launches Aggressive Campaign to Enforce The New Minimum Wage Law

On December 31, 2016, the new minimum wage law in New York State took effect.  New York’s minimum wage law is among the most complicated in the country. The minimum wage will gradually increase to $15.00 in the coming years, with annual increases to take effect on December 31st. However, how quickly the minimum wage reaches $15.00 depends on where your company is located, the type of business you are in, and whether you are a small or a large employer. For example, the minimum wage in NYC will increase as follows:

New York City 10 or fewer employees 11 or more employees
December 31, 2016 $10.50 $11.00
December 31, 2017 $12.00 $13.00
December 31, 2018 $13.50 $15.00
December 31, 2019 $15.00

For Nassau, Suffolk and Westchester counties, the increments began December 31, 2016 and will conclude on December 31, 2021, with the following increases annually on December 31 no matter the size of the workforce: $10.00, $11.00, $12.00, $13.00, $14.00 and $15.00.  For the rest of New York State, the increments began December 31, 2016 and will conclude on December 31, 2020, with the following increases annually on December 31 no matter the size of the workforce: $9.70, $10.40, $11.10, $11.80, $12.50 and $15.00.

There is a special carve out for fast food companies.  By December 31, 2018, fast food companies in NYC will reach the $15.00 and by July 1, 2021 the rest of NY State’s fast food companies will reach $15.00.

The New York Department of Labor (NYDOL) plans to aggressively enforce the new law and has created a 200-investigator unit to ensure employers are appropriately increasing employee pay to at least the minimum wage. The newly formed State Minimum Wage Enforcement and Outreach Unit’s mission is to inform workers of the new minimum wage law and to ensure they are properly paid.  The State has also established a hotline for workers to report violations of the new minimum wage law. Hotline calls will initiate a NYDOL compliance audit.  If violations are found, a company is subject to a $3.00 fine for each hour the company failed to pay the required minimum wage to an employee plus back wages and liquidated damages.

If you have any questions or would like to discuss the new NYS minimum wage law and its effect on your business, please contact John Vreeland, Esq., Chair of the Wage & Hour Compliance Practice Group and a Partner in the Labor Law Practice Group at (973) 535-7118 or jvreeland@nullgenovaburns.com, or Nicole L. Leitner, Esq., a member of the Wage & Hour Compliance and Labor Law Practice Groups at (973) 387-7897 or nleitner@nullgenovaburns.com.

NYC Joins the Pre-Trump Push for Employee Work Schedule Protections

New York City has joined several other cities, including San Francisco and Seattle, introducing legislation that offers more predictable, stable work schedules for employees in low-wage occupations. The legislation generally offers employees more notice of schedules, more access to extra hours, additional pay for last-minute schedule changes, and a mandated period of rest between certain back-to-back shifts. If passed, the legislation would take effect 180 days after being signed into law by Mayor Bill de Blasio.

More specifically, New York City has proposed a package of five bills that would offer the following protections related to employee work schedules:

  • Employees would have the right to request a change in their work arrangements (e.g., schedule changes, location reassignments) without fear of retaliation and employers would be required to engage in an “interactive process” and provide a good faith response within two weeks of the request.
  • Employees would be afforded a right to receive certain changes to work arrangements in emergency situations, like a childcare emergency or personal health emergency.
  • Employers would be prohibited from engaging in on-call scheduling of retail employees.
  • Employers would be prohibited from providing a retail employee with less than 20 hours of work during any 14-day period.
  • Employers of fast food restaurants would be required to provide employees with an estimate of their work schedule upon hire and notice of work schedules 14 days in advance, subject to penalties for untimely notice.
  • Employers would be prohibited from making fast food employees work consecutive shifts when the first shift closes the establishment and the second shift opens it the next day (nicknamed “cloepening” shifts). Employers would be required to give fast food workers at least eleven hours off between such shifts and would pay a $100 premium to an employee every time he or she was made to work such consecutive cloepening shifts.
  • Employers of fast-food establishments would be required to offer available hours to existing employees up until the point that they would have to pay those existing employees overtime, or until all current employees have rejected such available hours, before they could hire new employees.

New York City’s efforts appear to be an attempt to prevent what many fear will be backlash against workers’ rights from the incoming Trump administration. The goal of these legislative measures is to lessen the wage gap in big cities, where the cost of living is typically higher, by offering low-wage workers the opportunity to budget in advance, plan for education or family care, and secure a second job, among other things. Those who oppose the initiatives raise several concerns. According to many business officials, the implementation of scheduling mandates on employers would result in rising costs and decreased efficiency because scheduling changes are typically initiated by employees. Another critic accused the New York City Council of acting as labor organizers, particularly in light of the penalties imposed, which are similar to collective bargaining provisions.

For more information on the pending New York City legislation and how the new requirements will affect your business, please contact John Vreeland, Esq., Chair of the firm’s Wage and Hour Compliance Group, at (973) 535-7118 or jvreeland@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practices Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

New York Passes Trailblazing Paid Family Leave Starting in 2018

On March 31, 2016, the New York State Legislature passed a bill that included the country’s most wide-ranging paid family leave law. Beginning in 2018, all full-time and part-time workers employed for 6 months in New York State will be eligible for a guaranteed, job-protected 12 weeks of paid family leave (PFL), regardless of the size of their company. PFL covers time off to bond with a new child (including adopted or foster children), or to care for a seriously ill child, spouse, domestic partner, parent, grandchild, grandparent, sibling, or the parent of a spouse or partner parent. In addition, employees may also use PFL to address certain legal, financial, and childcare issues related to the military service of a spouse, domestic partner, child, or parent.

Starting in 2018, employees will receive 8 weeks of paid leave at half their salaries. The leave will be funded by employees through payroll deductions, will gradually phase up over 4 years to 12 weeks and 67 percent of pay in 2021.  Employee payroll contributions will cost from .70 cents a week up to $1.40. After the full benefits kick in, workers will be eligible for just 67% of the state’s average weekly wage, or a maximum of $848 per week for the highest paid workers. The PFL requires no additional contributions from employers or taxpayers.  The legislation also guarantees job protection for all workers who take leave, even those who work for businesses with fewer than 50 employees, which are not subject to the federal Family and Medical Leave Act (FMLA).

Within the same budget bill, the New York legislature passed a $15 minimum wage increase along with a middle-class tax cut, public education and transportation investments, and other progressive measures. The emphasis on family comes following personal challenges faced by New York’s Governor Andrew Cuomo and the evolution of the fight for workers’ rights, shifting from just a women worker’s issue to a broad workforce concern.

New York now joins New Jersey, California and Rhode Island as the only states that offer paid family leave. Despite a national 12-week unpaid family leave policy, in the United States overall, about 40% of employees are not covered under the FMLA because their employers have fewer than 50 employees, they work too few hours, or they have been employed there for under a year.

For more information regarding the potential impacts of this legislation or how your business can prepare to develop a compliant paid family leave policy, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.