On May 4, 2017, the Mayor of New York City, Bill de Blasio, signed into law a bill that amends the New York City Human Rights Law (the “NYCHRL”), and makes it illegal for employers to inquire about a prospective job applicant’s salary history or to rely on that history during the hiring process.  Cole Schotz previously blogged about the proposed legislation on April 7, 2017.  The text of the new law can be found by clicking here. The law will take effect 180 days from the date of signing, October 31, 2017.

The amendment to the NYCHRL prohibits an employer, an employment agency, and an employer’s agent or employee, from making inquiries regarding the salary history of an applicant unless certain limited exceptions in the law apply.  The amendment defines the term “inquiry” broadly to include not only communicating a question to an applicant or his/her current or former employer about such salary history, but also includes searching publically available records or reports to obtain an applicant’s salary history.  The law authorizes the New York City Human Rights Commission to take such actions “as are necessary to implement” the law prior to the effective date.

As noted above, there are limited carve outs in the law regarding when salary history may be discussed.  Critically, use of the term “salary history” under the amendment does not prohibit telling the applicant what the salary or salary range is for the position, and also does not prohibit the employer from inquiring about “objective measures of the applicant’s productivity” such as sales or revenue production attributable to the employee.   Likewise, an employer is permitted to engage in discussions with the applicant “about their expectations with respect to salary, benefits and other compensation, including, but not limited to unvested equity or deferred compensation,” which may be forfeited by the applicant by virtue of resigning from his/her current employer.  Additionally, an applicant can voluntarily disclose his/her salary history to an employer, without prompting, in which case the salary history may be considered by the employer in determining salary, benefits and other compensation, and may also be verified by the employer.  The amendment to the NYCHRL also will not apply where the disclosure or verification of salary history is required pursuant to Federal, State or local law, or in the case of internal transfers or promotions.

Employers should inform all employees and agents, including, but not limited to, their human resources professionals and recruiters, of the amendment to the NYCHRL, to ensure compliance by October 31, 2017.  Employers should also be mindful to appropriately “revamp” all employment applications and hiring materials to omit any reference to salary history.

On Friday, April 21, 2017, the Second Circuit affirmed a National Labor Relations Board (“NLRB”) ruling, which found that Pier Sixty, LLC (“Pier Sixty”) violated the National Labor Relations Act (“NLRA”) when it terminated its employee, Hernan Perez (“Perez”), for comments posted on Facebook.

In 2011, after a supervisor had given directions to Perez and other employees in a “disrespectful” manner, Perez used his iPhone to post a message to his personal Facebook account where he called the supervisor a “nasty mother f*******” and said “f*** his mother and his entire f****** family.”  Perez ended his post with “Vote YES for the Union.”  The Facebook post came just days before Pier Sixty employees voted to unionize in an October 2011 election.

The post remained on Facebook for three days before Perez removed it.  The removal, however, was too little too late.  Pier Sixty had already become aware of the profanity-laced post and, following an investigation, terminated Perez on November 9, 2011.

The NLRB, applying a totality of the circumstances test, determined that Perez’s conduct was not “opprobrious”  or offensive, and therefore the termination violated Sections 8(a)(1) and 8(a)(3) of the NLRA, which makes it an unlawful for an employer to terminate an employee based on union related activity.  On appeal, while giving deference to the NLRB’s findings, the Second Circuit based its affirmance on three main aspects: 1) the subject matter of the message; 2) past practices of Pier Sixty; and 3) the location of the message.

The Court first determined that, even though the post was vulgar, its primary subject matter was of workplace concern. Namely, the Court found that the last five words of the profanity-laced tirade—“Vote YES for the Union”—made the post “part of a tense debate over managerial mistreatment.”  Thus, because the comments were not just an “idiosyncratic reaction to a manager’s request,” and rather were connected to the upcoming union election, the subject matter fell within a protected activity under the NLRA.

After finding the subject matter of the post was related to union activities, the Court discussed Pier Sixty’s past practices of tolerating profanity among all employees.  The Court noted that there was “widespread” use of profanity among employees and only five written warnings were given to employees for use of profanity prior to Perez’s termination.  In fact, there was no evidence presented to the NLRB that any employee was terminated solely for the use of profanity or other offensive language.  Based on these past practices, the Court found it “striking” that Perez had been fired for using profanity just days before a Union election was to take place.

Finally, the Court turned to the “location” of the comments – a post on Perez’s public Facebook account.  Pier Sixty argued that the comments were made visible to both actual and potential customers, justifying the termination.  The Court, however, disagreed.  Although customers may have had access to the post, the comments were not made in the “immediate presence” of any customer and did not disrupt any of Pier Sixty’s catering events.  Moreover, the Court stated that online forums like Facebook are a “key medium of communication among coworkers” and it acts as a “tool for organization in the modern era.”  As such, the Court distinguished the comments from a “public outburst,” finding that the NLRB did not err in determining that the Facebook post was protected activity under the NLRA.

Although the Court recognized that this case was on the “outer-bounds of protected, union-related comments,” the Court’s decision reinforces that employers must be cautious when terminating an employee for speech that is, even loosely, related to protected union activity.

Beginning next year, New York will become the fourth state in America to guarantee paid family leave for private sector employees.  On January 1, 2018, the New York State Paid Family Leave Program (the “Program”) will take effect, providing eligible New York workers with coverage during time away from work.

The Program will be phased in over a four year period, beginning with 8 weeks of coverage at 50% of an employee’s salary in 2018 and rising to 10 weeks of coverage at 55% of salary in 2019, 10 weeks of coverage at 60% of salary in 2020, and maxing out with 12 weeks of leave at 67% of the employee’s salary in 2021.  Benefits are capped, however, if an employee’s pay is greater than the State’s average weekly wage which, as of 2016, is $1,305.92.

Three categories of employees are eligible for the program: (1) New parents following the birth or adoption of a child; (2) Employees caring for a sick family member; and (3) Employees with a family member called to active military duty.  An employee must fall into one of these three categories and must also have been employed full time for 26 weeks, or part time for 175 days, by a private employer to be eligible.

Under the maternity/paternity portion of the Program, paid leave only begins after birth and is not available prior to the birth of the child.  Leave must be taken during the first 12 months following the birth, adoption, or fostering of a child.  An employee in New York may also take paid leave to care for a seriously ill relative which includes spouses, domestic partners, children, parents, in-laws, grandparents, and grandchildren.   A serious health condition under the Program is defined as an illness, injury, impairment, or physical/mental condition that involves inpatient care in a hospital, hospice, or health care facility or continuing treatment or supervision by a health care provider.  An employee in New York can also take time under the Program when a spouse, child, domestic partner, or parent of the employee is on active duty in the military, or has been notified of an impending order of active duty.

Paid leave cannot be used for an employee’s own disability or military event and must be used to care for an eligible family member.  The Program will be fully funded by employees, with payroll deductions beginning as early as July 1, 2017.  Under the Program, an employer may not discriminate against employees for taking paid family leave and employees are guaranteed to be able to return to their job at the conclusion of their absence.

Private Sector Employers in New York should familiarize themselves with the Program and their attendant obligations.  Please visit the blog often for more information regarding when employee payroll deductions will begin under the Program.

The New York City Council approved legislation on Wednesday, April 5, 2017, which bans NYC employers from relying on past salary history when making hiring decisions. The legislation, known as Introduction 1253-A, is intended to prevent the single interview question: “How much did you make at your previous job?”

Proponents of the legislation suggest that the prohibition will combat gender-based wage disparities by preventing employers from setting wages based on previous salaries and help to end the perpetual cycle of women earning less than men insofar as the distinction is based on past practices. In addition, proponents of the legislation believe that withholding such information from employers will likely create more transparency in the hiring process and force employers to set salaries prior to conducting interviews. With this legislation, NYC joins the ranks of Massachusetts and Philadelphia, which recently passed similar laws.

The legislation, however, is not without its opponents and criticism, and it is expected that lawsuits will be filed prior to its implementation. In fact, on April 6, 2017, the Chamber of Commerce for Greater Philadelphia filed a federal lawsuit challenging a similar Philadelphia law on First Amendment grounds. That lawsuit seeks injunctive relief, alleging that the law unduly burdens an employer’s ability to rely on wage history during the job-application process. NYC employers should pay close attention to the Philadelphia lawsuit as a favorable decision for the Chamber of Commerce will likely influence challenges to Introduction 1253-A.

We will keep our readers updated with respect to the implementation of Introduction 1253-A and any challenges brought against it.

As previously discussed on this blog in a post dated November 23, 2016, the United States Department of Labor (“DOL”), in May of 2016, issued a final rule (“Final Rule”) revising its regulations construing the so-called white-collar overtime exemptions of the Fair Labor Standards Act (“FLSA”).  In essence, the Final Rule increased the minimum salary that employers must pay their employees in order to invoke the white-collar exemption, from $23,600 to $47,476 annually, and provided for automatic updates to the minimum salary every three years.

The Final Rule was scheduled to take effect on December 1, 2016, but on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction, preventing the DOL from implementing the rule ( Nevada v. U.S. Dep’t of Labor ).  That litigation continues, and the preliminary injunction ruling is on appeal to the Court of Appeals for the Fifth Circuit.  It is unknown whether the Fifth Circuit will uphold the injunction or reverse, and whether the District Court will ultimately vacate the Final Rule or lift the injunction.   Resolution of these uncertainties appears to be months away.  The Fifth Circuit recently granted the DOL’s request for an extension of time to file its reply brief “to allow incoming leadership personnel adequate time to consider the issues,” and the reply brief is not due until May 1, 2017.

If the District Court lifts the injunction, or the Fifth Circuit reverses, the Final Rule will presumably go into effect, and a troubling question for employers arises: Will courts hold employers liable under the FLSA’s overtime rules based on their failure to comply with the Final Rule since December 1, 2016?

District courts across the country have been wrestling with a similar issue relating to a different set of DOL regulations – those construing the FLSA’s companionship-services exemption.  The new DOL companionship-services regulations, set to take effect on January 1, 2015, removed home health care employees of third-party agencies from the ambit of the FLSA’s exemption.  However, before the new regulations took effect, a federal judge in the District of Columbia vacated the regulations.  Over eight (8) months later, in August of 2015, the Court of Appeals for the District of Columbia reversed the vacatur and upheld the regulations ( Home Care Ass’n of Am. v. Weil ).

Since that time, a distinct split of authority has developed regarding whether employers are liable for overtime for those previously-exempt companionship-services employees during the time that the vacatur of the new DOL regulations was in effect.  On the one hand, some federal judges have concluded that the regulations did not require compliance during the period that the vacatur was in effect.  In contrast, other federal judges have ruled that, because of the D.C. Circuit’s reversal, the District Court’s vacatur, in essence, never occurred, and employers were required to follow the new regulations as of January 1, 2015.  Of course, the latter interpretation puts employers in a distinct quandary to the extent they justifiably relied upon the pronouncements of a district court.

The uncertainty surrounding the effective date (for employer-compliance purposes) of the DOL’s companionship-services regulations may have implications for the obligations imposed by the Final Rule.  In the event that the Texas judge’s injunction against the enforcement of the Final Rule is lifted or reversed, it is entirely unclear whether courts will determine that employers were obligated to comply with the Final Rule’s new minimum salary requirement as of December 1, 2016.  This lack of clarity is further compounded by the uncertainty surrounding the new administration’s position with respect to the Final Rule and its motivation to pursue the appeal.

Employers who would be affected by the obligations imposed by the Final Rule should carefully evaluate the relevant legal and business risks in determining whether to meet the Final Rule’s minimum salary requirements while the injunction remains in place.

We will keep our readers updated with respect to the state of the law surrounding the Final Rule.