On June 20, 2023, the New York Assembly passed a bill already passed by the Senate banning all post-employment noncompete agreements with workers. The bill is headed to Governor Kathy Hochul’s office for her approval. Governor Hochul has voiced her support for a much narrower, income-targeted ban on noncompetes, but she has not previously voiced support for this broad a measure. While it is possible she may decline to sign the ban and insist upon amendments, many expect her to sign it, particularly given the overwhelming vote it received in both legislative houses.
More specific details of the noncompete agreement ban include:
The ban has no compensation threshold or exception for executives.
The ban covers all employees and independent contractors (and, through the vague definition of “covered individual,” may include other service providers/consultants and even workers who are partners, members, or other equityholders).
The ban appears focused on only traditional noncompetition agreements, despite the odd prefatory language stating, “Every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” The sentence that follows that pronouncement focuses on “non-compete agreement” (the defined term in the act); and the act expressly indicates that it is not intended to apply to certain non-solicitation provisions, confidentiality agreements, and agreements providing for a “fixed term of service,” provided that those agreements “do not otherwise restrict competition in violation of” the act.
The ban appears not to be retroactive since the bill it is amending states, “This act shall take effect on the thirtieth day after it shall have become a law and shall be applicable to contracts entered into or modified on or after such effective date,” and comments on the floor of the Assembly during last week’s debate and vote confirm that.
New York recently amended its Health and Essential Rights Act (“HERO Act”) and published its “Model Airborne Infectious Disease Exposure Prevention Plan.” While the Model Plan specifies that there is currently no airborne infectious disease outbreak, the HERO Act requires New York employers to take steps now to comply with the statute. “Airborne infectious disease” is defined as any infectious, viral, bacterial, or fungal disease that is transmissible through the air in the form of aerosol particles or droplets and is designated by the Commissioner of Health as a highly communicable disease that presents a serious risk of harm to the public health. While COVID-19 would have been so designated a year ago, it is not so designated at this time. Likewise, unless designated by the Commissioner of Health, the seasonal flu will not qualify. See the New York Department of Labor Airborne Infectious Disease Exposure Prevention Standard here: The Airborne Infectious Disease Exposure Prevention Standard (ny.gov). Nevertheless, employers cannot wait until an outbreak is declared to comply with the statute.
What Employers Need to Know
The Act has broad definitions of “employer,” “employee,” and “work site.” “Employer” includes any person, entity, business, corporation, partnership, limited liability company, or association employing, hiring, or paying for the labor of any individual. “Employee” means any person providing labor or services for remuneration within the state and without regard to immigration status. The definition includes independent contractors. A “work site” means any physical space, including vehicles, where work is performed and the employer has the ability to exercise control. A work site includes employer-provided housing and transportation. Thankfully, employees’ own homes and vehicles are not covered.
The Act prohibits employers from retaliating or taking adverse action against any employee who exercises rights under the statute; reports violations of the statute; reports airborne infectious disease exposure; or refuses to work where the employee reasonably believes, in good faith, that such work exposes employees to an airborne infectious disease due to working conditions inconsistent with the law. The law, however, requires the employee to first notify the employer of the problem and then give the employer an opportunity to cure it.
New York City recently amended its Earned Safe and Sick Time Act (the “Act”) to match New York State’s recent changes to the Labor Law requiring all employers to provide sick leave to employees as discussed in our prior posts (Empire State Requires All Employers to Provide Sick Leave; Act Now! Changes to New York Sick Leave Are Here). New York City’s Act now matches the New York State requirements that employers must allow employees to accrue safe/sick time of between 40 to 56 hours per year (depending on employer size and net income). Although effective September 30, employees may be restricted from using any additional accrued paid time under the new legislation until January 1, 2021. New York City employers are also required to provide notice of the changes to their employees by October 30, 2020.
Mirroring the new Labor Law requirements, the New York City Act provides that:
Employers with 100 or more employees must allow employees to accrue at least 56 hours of paid safe/sick time each calendar year;
Employers with between five and 99 employees must allow employees to accrue at least 40 hours of paid safe/sick time each calendar year;
Employers with fewer than five employees but having a net income greater than one million dollars in the previous tax year must allow employees to accrue at least 40 hours of paid safe/sick time each calendar year; and
Employers with fewer than five employees and having a net income less than one million dollars in the previous tax year must allow employees to accrue at least 40 hours of unpaid safe/sick time each calendar year.
In July, we reported that the New York State Legislature had passed a bill that could substantially alter the legal landscape of wage disputes by allowing employees with wage claims to file liens against their employers’ assets in the amount of the claim. The lien could be filed without any court order or determination of probable liability. The bill further permitted attachments of the employer’s property and would have expanded the personal liability of the 10 largest shareholders of non-public companies by making them liable not only for wages, but also for interest, penalties, liquidated damages, attorneys’ fees, and costs.
A new amendment to the New York State Human Rights Law expressly prohibits workplace discrimination based on religious attire, clothing, and facial hair. New York employers should review their current policies and work with counsel to ensure compliance by the October 8, 2019, effective date.
Governor Cuomo recently signed legislation (S.4037/A.4204) that amends the New York State Human Rights Law to expand religious protections for employees and applicants in the workplace. The New York State Human Rights Law already prohibits employers from imposing upon employees and applicants “a condition of obtaining or retaining employment” that would require them “to violate or forego a sincerely held practice of [their] religion.” N.Y. Exec. Law § 296(10)(a). The new law ensures that those same protections now encompass an employee’s or applicant’s religious attire, clothing, and facial hair. Continue reading “New York Expands Workplace Protections for Religious Attire, Clothing, and Facial Hair”
New York is on the precipice of passing a law that would allow employees to easily file liens against an employer’s property in connection with pending wage disputes. The bill also would permit employee access to certain sensitive employer records and expand the scope of personal liability for owners in disputes over wages. Employers should monitor these developments and work with counsel to prepare an action plan should this bill become law.
The New York State Legislature has recently passed a bill that could substantially alter the legal landscape of wage disputes if signed into law by Governor Cuomo. The proposed Employee Wage Lien bill would allow employees to obtain liens against an employer’s real property and personal property based on allegations involving nonpayment of wages. If signed into law, the bill will become effective within 30 days. Similar laws have been enacted on other states.
The law will allow employees to file a notice of a lien up to three years following the end of the employment giving rise to the wage claim. Employees will be able to place liens up to the total amount allegedly owed based on claims relating to overtime compensation, minimum wage, spread of hours pay, call-in pay, uniform maintenance, unlawful wage deductions, improper meal or tip credits or withheld gratuities, unpaid compensation due under an employment contract, or a claim that the employer violated an existing wage order. In addition, the State Attorney General and Department of Labor will be able to obtain a lien on behalf of an individual employee—or a class of employees—against an employer that is the subject of an investigation, court proceeding, or agency action.
As part of the New York State Legislature’s push to pass legislation at the end of its 2019 Session, three anti-discrimination bills have been passed and sent to the governor for consideration. If signed into law by Governor Cuomo (as expected), the bills will: (i) prohibit employers from inquiring into job applicants’ wage or salary history; (ii) expand the protections of existing equal pay laws; and (iii) ban discrimination based on hair or hairstyle. The salary history ban and equal pay law amendments will go into effect 180 days after enactment, and the hair/hairstyle law will go into effect immediately upon signature. Continue reading “Protect Our Employees! End of Legislative Session Marked by Employee-Friendly Changes”
New York State has this week enacted sweeping election reforms that go into effect immediately. The changes will impact private employers across the state. Section 3-110 of the New York Election Law now permits all registered voters to request and obtain up to three hours of paid time off, regardless of their schedule, to vote in any public election. Employers will be permitted to designate whether the time off will be taken at the beginning or end of an employee’s shift.
To qualify, employees must be registered to vote and must provide at least two days’ advance notice to their employer of the need for time off to vote. The law is silent on whether the employer can count voting time against other paid time off programs it provides. We anticipate that regulations will be issued relating to this and other elements of the law and we will report on them as they are published.
Employers also must comply with a voting rights posting requirement. Employers are required to post a notice that explains the employees’ right to paid time off for voting. You can see a version of the approved poster on the New York State Board of Elections website here.
The notice must be posted in a conspicuous location in the workplace where it can be seen as employees come or go to their place of work, at least 10 days before a public election, and must remain up until the polls close on election day.
Employers should take note that these rules apply to all public elections; the next such statewide election will be the New York primaries on June 25, 2019.