Recent Fourth Department Decision Provides Guidance on the Enforceability of Restrictive Covenants
February 25, 2014
New York Labor and Employment Law Report
February 25, 2014
February 18, 2014
January 13, 2014
January 8, 2014
December 18, 2013
October 18, 2013
October 17, 2013
On October 16, our firm conducted a webinar, which provided a detailed explanation of the wage deduction regulations promulgated by the New York State Department of Labor ("NYSDOL") on October 9. If you wish to view a recording of the webinar in its entirety and print out a copy of the PowerPoint slides from the webinar, you can click here.
October 9, 2013
September 10, 2013
Beginning on October 29, 2013, an amendment to New York State’s smoking law prohibits smoking anywhere on the grounds of a general hospital or residential health care facility. The amendment also prohibits smoking in areas within 15 feet of any building entrance or exit, and within 15 feet of any entrance to or exit from the grounds of a general hospital or residential health care facility. Although there is a narrow exception for patients of residential health care facilities and their visitors or guests, there is no exception for employees of general hospitals or residential health care facilities. Therefore, general hospitals and residential health care facilities should take immediate steps to notify their employees of the new smoking restrictions and ensure that their employees comply with those restrictions effective October 29, 2013.
The amendment, signed into law by Governor Cuomo on July 31, 2013, modifies New York Public Health Law Section 1399-o, Subdivision 2, which governs smoking in outdoor areas. As a result of the amendment, general hospitals and residential health care facilities must prohibit their employees from smoking on their grounds and within 15 feet of all entrances to or exits from their grounds. However, depending on how the law is eventually interpreted, smoking might be permitted in employees' private vehicles parked on the grounds of general hospitals and residential health care facilities due to a “private automobile” exception in a pre-existing, unmodified provision of the smoking law. The Department of Health has not yet issued guidance on this issue, or on the new law generally.
Prior to the amendment, the only outdoor areas subject to the law were certain outdoor areas of schools and railroad stations. The smoking law’s restrictions on smoking in indoor areas (including indoor areas of general hospitals and residential health care facilities) are contained in a separate section and are not modified by the amendment.
As noted above, the law contains an exception for patients of residential health care facilities and their visitors or guests. This narrow exception permits these individuals to smoke in a designated smoking area that is at least 30 feet away from any building structure (other than a non-residential structure wholly contained in the designated smoking area). This exception does not apply to patients of general hospitals and their visitors or guests.
July 24, 2013
The New York Court of Appeals, in Barenboim v. Starbucks Corp., recently clarified the types of employees who may participate in tip-pooling arrangements and the extent to which employers may exclude otherwise tip-eligible employees from participating in a tip pool under the New York Labor Law.
Background
Under Starbucks’ tip policy, baristas and shift supervisors share tips collected each week. Two separate lawsuits were filed in federal court against Starbucks, challenging the policy as it applied to certain categories of employees. In one case, baristas, who take and deliver orders, stock product, and clean tables, alleged that shift managers could not lawfully participate in the tip pool because their supervisory duties rendered them ineligible for tips. In the other case, a group of assistant managers argued that because they perform some customer service-related duties and lack “full” managerial authority, Starbucks improperly excluded them from the tip pool. The U.S. District Court for the Southern District of New York ruled in favor of Starbucks in both cases, and the plaintiffs in both cases appealed.
Noting that the cases raised novel questions of state law, the U.S. Court of Appeals for the Second Circuit certified two questions to the New York Court of Appeals, the state’s highest court:
The Court's Analysis of the Issues
Citing the New York State Department of Labor’s January 2011 Hospitality Industry Wage Order, the Court held that employees are tip-eligible even if they have managerial responsibility as long as they provide personal service to customers as a principal part of their jobs, rather than just on an occasional or incidental basis. However, an employee who has “meaningful authority” or control over subordinates is ineligible to participate in a tip pool.
The Court explained that “meaningful authority might include the ability to discipline subordinates, assist in performance evaluations or participate in the process of hiring or terminating employees, as well as having input in the creation of employee work schedules, thereby directly influencing the number and timing of hours worked by staff as well as their compensation.” The Court left it to the Second Circuit Court of Appeals to apply those principles to the specific facts of the baristas’ case.
With respect to the second issue, the Court concluded that Section 196-d of the New York Labor Law does not create an affirmative right for all tip-eligible employees to participate in tip-sharing arrangements. Although the Court stated that “there may be an outer limit to an employer’s ability to excise certain classifications of employees from a tip pool,” the Court found no evidence to suggest that Starbucks’ policy, as applied to assistant managers, reached that limit.
Impact on Employers
The Court’s decision provides some clarity regarding employees’ eligibility to participate in tip pools. However, because the Court did not apply the “meaningful authority” standard to the facts of the baristas’ case, the analysis remains somewhat unclear. Additionally, the Court did not identify which exclusions of tip-eligible employees might be considered unlawful. Accordingly, employers should consult with counsel before implementing tip-sharing arrangements.
July 15, 2013
The New York City Council passed the Earned Sick Time Act on June 27, 2013, overriding Mayor Bloomberg's veto. Under the Act, private sector employers with 20 or more employees within New York City will be required to offer at least 40 hours of paid sick leave per year to each employee beginning on April 1, 2014. Private sector employers with less than 20 employees within New York City will be required to offer at least 40 hours of unpaid sick leave per year to each employee beginning on April 1, 2014. Beginning on October 1, 2015, private sector employers with 15 or more employees within New York City will be required to offer at least 40 hours of paid sick leave per year to each employee, and private sector employers with less than 15 employees within New York City will continue to be required to offer at least 40 hours of unpaid sick leave per year to each employee. These implementation dates could be postponed if economic indicators based on a financial index maintained by the Federal Reserve Bank of New York do not meet certain conditions. The Act does not cover independent contractors, work study students, public sector employees, and certain types of hourly professional employees.
The Act provides that an eligible employee will earn at least one hour of sick leave for every 30 hours worked. However, employers are not required to permit employees to use accrued sick leave until 120 calendar days after the commencement of employment. Part-time employees are also covered by the Act, and will earn sick leave at the same rate. Employers may provide employees with a faster accrual of sick leave than what is required by the Act, and may permit employees to use sick leave within their first 120 calendar days of employment.
Under the Act, accrued sick leave may be used for absences due to: (1) the employee's own health condition; (2) the employee's need to care for a spouse, domestic partner, child, parent, or the child or parent of a spouse or domestic partner; or (3) the closure of the employee's place of business due to a public health emergency or the employee's need to care for a child whose school or child care provider has been closed due to a public health emergency. An employer may require documentation that sick leave was used for one of these purposes only if the absence is for more than three consecutive work days. The Act prohibits employers from retaliating against employees for their use of sick leave or for filing a complaint alleging a violation of the Act.
The number of employees that an employer has is determined by counting all compensated workers during a given week, including full-time, part-time, and per diem employees. If the number of employees fluctuates, the size of the employer may be determined for the current calendar year based upon the average number of employees who worked for compensation per week during the preceding calendar year. In chain businesses, the total number of employees in the group of establishments must be counted.
Employers may require reasonable notice from an employee who intends to use sick leave. If the sick leave is foreseeable, the employer may require up to seven days' notice. If the sick leave is not foreseeable, an employer may only require notice as soon as practicable.
If an employee is transferred from one location to another location within New York City, but continues to be employed by the same employer, the employee is entitled to keep his or her accrued sick leave. However, an employer is not required to provide financial or other reimbursement to an employee upon termination, resignation, retirement, or other separation, whether voluntary or involuntary, for accrued unused sick leave.
The Act does not apply to any employee covered by a valid collective bargaining agreement, as long as the provisions of the Act are expressly waived in the collective bargaining agreement and the agreement provides for a comparable benefit to covered employees in the form of paid days off. For employees in the construction or grocery industry who are covered by a valid collective bargaining agreement, there is no requirement that the agreement provide for a comparable benefit to covered employees in order for such employees to be exempt from the provisions of the Act -- it is sufficient that the collective bargaining agreement expressly waive the provisions of the Act, regardless of whether a comparable benefit is provided.
May 15, 2013
The New York State Department of Labor (“NYSDOL”) quietly published draft rules on its website regarding employee wage deductions under Section 193 of the New York Labor Law. The rules will be open for public comment until July 6, 2013.
The draft rules cover a number of deduction-related issues. For example, the rules specify what is required for employers to obtain sufficient “authorization” from employees for otherwise permissible wage deductions. Among other things, employees must be provided with written notice of “all terms and conditions” of the deduction, the benefit(s) of the deduction, and the details of the manner in which the deduction will be made.
The rules also illustrate what types of deductions may be allowed under Section 193’s “catch-all” provision, permitting “similar payments for the benefit of the employee.” New York employers will recall that, in recent years, NYSDOL has narrowly interpreted this provision to exclude many common types of deductions favored by employers and employees alike. The draft rules suggest that NYSDOL will be closely scrutinizing wage deductions for such “similar payments” and that this provision will still be narrowly interpreted by state regulators.
Notably, the rules also include an enumerated list of illegal wage deductions, including deductions for “employee purchases of . . . attire required for work,” “unauthorized expenses,” and “political action committee” contributions. Several of these prohibitions are consistent with recent NYSDOL interpretation of Section 193, but the blanket ban on political action committee contributions would contradict recent opinion letters indicating that such deductions would be lawful if permitted by federal election law.
Finally, the draft rules specify detailed procedures and requirements that employers must follow in order to lawfully deduct for wage overpayments and for wage or salary advances now permitted under Section 193. An employer’s failure to follow these provisions will create a presumption that the deduction in question was illegal.
To reiterate, these are only draft rules which NYSDOL has proposed and are not yet in effect. We will be reporting further during the rule-making process and public comment period. We encourage you to check back for updates.