The controversial New York City Fair Workweek laws are scheduled to go into effect on November 26, 2017 at the conclusion of Thanksgiving weekend.  We previously blogged about the new laws shortly after their enactment earlier this year (post available here).  The legislation package, consisting of 5 bills, will directly impact New York City fast food restaurants and retailers by curtailing employers’ flexibility to establish and modify employee work schedules, among other limitations.

Some of the key changes impacting operators in the fast food industry include the following:

  • Employers will be required to provide “good faith estimates” of anticipated work schedules for all new hires.
  • Employers will be forced to provide all fast food workers with at least 14 days’ notice of their actual work schedules. Those schedules must then be conspicuously posted and displayed in the workplace.  Subsequent modifications will subject the employer to a range of monetary penalties payable to the affected employee(s).
  • Absent written consent by the employee (and an additional $100 in compensation), “clopen” schedules (closing a restaurant one night and opening the following morning) will be banned unless at least 11 hours have elapsed between shifts.
  • Employers will be required to offer additional work shifts to existing employees before hiring new workers to fill those shifts.
  • Fast food employees will be permitted to voluntarily direct employers, in writing, to take deductions from their paychecks (of at least $3 per week) in order to make contributions to non-profits; it will then be the employers’ obligation to remit payment to the designated non-profit .

In addition to the changes specific to the fast food industry, after November 26 all New York City retailers with at least 20 employees will be barred from scheduling “on-call” shifts and cancelling/altering work schedules within 72 hours of an employee’s scheduled shift start.

With the Fair Workweek legislation becoming effective only a few weeks from now, New York City fast food restaurateurs and retailers are strongly encouraged to consult with their legal advisors and reform their scheduling protocol and procedures.  Failing to do so may unnecessarily expose them to otherwise avoidable fines and penalties for violating the new laws.

On October 31, 2017, the New York Salary History Law (the “Law”) goes into effect, making 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 legislation in posts NYC Pay History Ban: Combating Wage Disparity and NYC Pay History Ban to Take Effect October 31, 2017.

The Law, an amendment to the New York City Human Rights Law, prohibits an employer, an employment agency, and an employer’s agent or employee, from making inquiries regarding an applicant’s salary history other than in certain specifically enumerated situations.  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 New York City Commission on Human Rights recently released Frequently Asked Questions (“FAQs”) concerning the Law, including the scope of coverage under the Law, what employers can and cannot do to learn about a job applicant’s salary expectations, the definition of “compensation” under the Law, and employer best practices. By way of example, the FAQs discuss whether an employer may conduct a background check in New York that includes information about an applicant’s salary history.  Hint: according to the FAQs, “in circumstances where an employer is legally permitted to perform a background check … the Commission recommends that employers specify to reporting agencies that information about salary history be excluded from the report.”  See FAQs, Section II.

The FAQs also specify “best practices” that an employer can implement to comply with its obligations under the Law including:

  • During the hiring process, focus questions on applicants’ salary demands, skills, and qualifications.
  • Ensure that job applications and other forms do not include questions about applicants’ salary history, even if such questions are framed as “voluntary.”
  • Modify written policies and educate interviewers and hiring staff to prohibit inquiries about applicants’ salary history.

See FAQs, Section V.  The FAQs are expected to be updated as necessary to facilitate compliance with the Law.

The Commission on Human Rights has also released a Job Applicant Fact Sheet and an Employer Fact Sheet advising applicants and employers, respectively, who is protected under the Law and what conduct is allowed under the Law.

Employers should ensure that all employees and agents, including, but not limited to, their human resources professionals and recruiters, are aware of the Law and their required compliance by October 31, 2017.  All employment applications and hiring materials should also be amended to omit any reference to salary history.

On October 19, 2017, the Court of Appeals for the Third Circuit ruled that New Jersey based Mary Kay consultants could not bring a claim in New Jersey federal court against Mary Kay for alleged violations of the New Jersey Wage Payment Law (“NJWPL”).  The court relied upon the broad forum-selection clause in the consulting agreements between the parties, which mandated that “any dispute or controversy . . .  concerning any matter relating to this Agreement . . . be submitted to the jurisdiction of the courts of the State of Texas.”

The consultants – New Jersey residents who performed their work under the agreements in New Jersey – argued that their statutory-based NJWPL claim did not fall within the scope of the forum-selection clause.  The court, applying Texas law in accordance with the contracts’ choice-of-law provisions, concluded that because the claim related to the working relationship between the consultants and Mary Kay, the claim necessarily implicated the contents of the consulting agreements.  Because the consultants did not overcome their exceptionally heavy burden of avoiding the enforcement of the Texas forum-selection clause, the Third Circuit affirmed the lower court’s dismissal of the action.

While the decision represents a strong win for employers and the freedom to contract, its implications are not without limitation.  Parties are not at liberty to select forums and governing laws that have absolutely no relationship to the parties and the dispute.  Here, the parties’ choice of Texas law and the Texas forum undoubtedly had the requisite connection to the parties and the dispute, as Mary Kay is headquartered in Texas.

Additionally, as the court took pains to point out, the consultants did not challenge the enforceability of the forum-selection clause, and instead limited their arguments to the scope of the clause.  Cognizant of the “predicament” for plaintiffs seeking the substantive protections of the employment laws of their home state, where they perform substantially all of their work, the court explained that it is incumbent on plaintiffs to challenge the enforceability of the clause itself, not merely its scope.

Parties to employment contracts are strongly encouraged to carefully consider the ramifications of choice-of-law and forum-selection clauses before litigation arises, lest they find themselves in a foreign jurisdiction with laws which may be unfavorable to their interests.

As previously discussed, recent decisions from the New York Supreme Court, Appellate Division, found a New York State Department of Labor (“NYDOL”) opinion letter was not a “rational or reasonable” interpretation of New York Labor laws and regulations. In Andryeyeva and Moreno, the Second Department found that “live-in” home health care aides, whom were historically paid for 13 of their 24-hour shifts, were required to be compensated for every hour of their shift, regardless of whether this time includes sleep and meal break periods.  These decisions align with the First Department case of Tokhtaman, which similarly found this 13-hour rule to be an improper interpretation of New York Labor laws and regulations.

In response, on October 6, 2017, the NYDOL issued an amendment to the Minimum Wage Order for Miscellaneous Industries and Occupations (the “Amended Wage Order”) on an emergency basis and without the public notice or comment period generally provided prior to amending Wage Orders.  The Amended Wage Order provides:

(b) The minimum wage shall be paid for the time an employee is permitted to work, or is required to be available for work at a place prescribed by the employer, and shall include time spent in traveling to the extent that such traveling is part of the duties of the employee. However, a residential employee–one who lives on the premises of the employer–shall not be deemed to be permitted to work or required to be available for work:

(1) during his or her normal sleeping hours solely because he is required to be on call during such hours; or

(2) at any other time when he or she is free to leave the place of employment.

Notwithstanding the above, this subdivision shall not be construed to require that the minimum wage be paid for meal periods and sleep times that are excluded from hours worked under the Fair Labor Standards Act of 1938, as amended, in accordance with sections 785.19 and 785.22 of 29 C.F.R. for a home care aide who works a shift of 24 hours or more.

12 N.Y.C.R.R. 142.2.1(b) (emphasis added).

The amendment, and the specific reference to federal regulations governing the FLSA, confirms the NYDOL policy that employers of home health care aides do not need to pay their employees for every hour of their 24-hour shift.  Rather, meal and break periods not otherwise compensated under the FLSA do not have to be paid.  The federal regulations, which are incorporated into the Amended Wage Order, state that an employer does not have to compensate an employee during “bona fide” break periods, which include meal periods where the employee is completely relieved of their duties and the normal 8-hour sleeping period.  These “bona fide” breaks comport with the 13-hour compensation practices of employers within the home health care industry prior to the decisions of Andryeyeva, Moreno, and Tokhtaman.  As such, the Amended Wage Order seemingly contradicts Andryeyeva, Moreno, and Tokhtaman, and reinforces the 13-hour wage rule.

The Amended Wage Order seems to directly address the concerns raised by the Court in Andryeyeva, Moreno, and Tokhtaman, but certainly does not solve the problem.  The Appellate Division decisions remain good law and have the potential to cause substantial back-pay liability that could ultimately bankrupt the entire home health care industry within New York.  Although the Amended Wage Order may help persuade the New York Court of Appeals to hear the issues presented in the recent cases, the current conflict between the New York State decisions, federal decisions addressing the issues (see Bonn-Wittingham v. Project O.H.R. (Office for Homecare Referral), Inc., 2017 WL 2178426 (E.D.N.Y. May 17, 2017); Severin v. Project OHR, Inc., 2011 WL 3902994 (S.D.N.Y. Sept. 2, 2011)),  and the NYDOL have caused a state of flux within the industry. While the Amended Wage Order provides support for employers within the industry who still intend on following the 13-hour rule, it is unclear if this rule would apply retroactively, leaving these employers still subject to substantial liability.

Employers in the home health care industry are strongly advised to consult with counsel to ensure compliance with these payment practices.

Cole Schotz will continue to monitor these issues and provide updates to its readers.

The New York Supreme Court, Appellate Division, issued two decisions in September that have serious ramifications for the home health care industry.  In Moreno v. Future Care Health Servs., Inc., 2017 WL 4018898 (N.Y. App. Div. Sept. 13, 2017) and Andryeyeva v. New York Health Care, Inc., 2017 WL 4019032 (N.Y. App. Div. Sept. 13, 2017), the Appellate Division, Second Department, found non-resident home health care aides must be paid minimum wage for all hours spent at a patient’s home.  These decisions mark a drastic change in the employment practices within the home health care industry and may have a lasting effect on both employers and patients in need of 24-hour care.

Historically, “live-in” home health care aides working 24-hour shifts within the patient’s home were compensated for 13 hours of their 24-hour shift.  This industry standard is in accordance with a March 11, 2010 opinion letter (“Opinion Letter”) from the New York Department of Labor (“NYDOL”), which interpreted minimum wage and overtime provisions of the New York Labor Law.  The Opinion Letter found that home health care aides working 24-hour shifts are “residential employees” and, therefore, did not have to be compensated during normal sleeping hours.  According to the Opinion Letter, live-in home health care aides only had to be compensated for 13 of the 24 hours, provided the aide was afforded at least 8 hours of sleeping time, 5 of which must be uninterrupted, and 3 hours of meal breaks.

Recently, however, the Second Department disagreed with the NYDOL finding the Opinion Letter to be in conflict with New York Labor Law. The plaintiffs in both Andryeyeva and Moreno were home health care aides employed to care for elderly and disabled patients and were required to work 24-hour shifts within the patient’s home.  Consistent with the Opinion Letter, the plaintiffs were not paid minimum wage for their entire 24-hour shift.  Instead, the Andryeyeva plaintiffs were paid minimum wage for the first 12 hours of their shift, and paid a flat rate for the remaining 12 hours.  Similarly, the Moreno plaintiffs were paid a flat rate per shift.  The plaintiffs in both cases, which were filed as class actions, argued that they were not “residential employees” and the sleep and meal break exceptions in the Opinion Letter were not applicable.  Thus, the plaintiffs contended that they were required to be paid minimum wage for the full 24-hour shift.

The Second Department agreed, finding that the Opinion Letter was neither a “rational or reasonable” interpretation of the New York Labor Law.  In both cases, the Court held that class members who maintain residences outside a patient’s home are considered “non-residential” employees and are entitled to minimum wage for the full 24-hours worked.

Andryeyeva and Moreno align with the First Department’s decision in Tokhtaman v. Human Care, LLC, 149 A.D.3d 476, 477, 52 N.Y.S.3d 89, 91 (N.Y. App. Div. 2017), and these decisions will have an enormous impact on the home health care industry.  Although these decisions may eventually be challenged before the New York Court of Appeals, in the interim home health care employers with “live-in” aides could be subject to substantial back-pay liability.  Home health care employers should consult with counsel to ensure compliance with these recent rulings.