New York Law

New York State Minimum Wage Increases to Begin December 31, 2013

April 26, 2013

New York State's 2013-2014 budget -- approved on March 29, 2013 -- includes a three-stage increase in the state's minimum wage.  Effective December 31, 2013, the minimum wage will increase from $7.25 per hour to $8.00 per hour.  Effective December 31, 2014, the minimum wage will increase to $8.75 per hour, and effective December 31, 2015, the minimum wage will increase to $9.00 per hour.

These minimum wage increases do not apply to tipped food service workers and service employees who are covered by the New York State Department of Labor's Hospitality Industry Wage Order.  However, the Commissioner of Labor is authorized under the legislation to promulgate a wage order increasing the hourly minimum wage for such tipped employees.

Employers are eligible for a minimum wage reimbursement credit for each employee who:  (1) is between the ages of 16 and 19; (2) is paid at the applicable minimum wage rate; and (3) is a student during the period in which he or she is paid at the applicable minimum wage rate.  During the period of time when the minimum wage is $8.00 per hour, the reimbursement credit is $0.75 per hour for each hour worked by an eligible employee (which is the entire amount of the increase from the current $7.25 per hour minimum wage).  During the period of time when the minimum wage is $8.75 per hour, the reimbursement credit is $1.31 per hour for each hour worked by an eligible employee.  During the period of time when the minimum wage is $9.00 per hour, the reimbursement credit is $1.35 per hour for each hour worked by an eligible employee.  If the federal minimum wage is increased to above 85% of the state minimum wage, however, the reimbursement credit will be reduced to the difference between the federal minimum wage and the New York minimum wage.

The minimum wage reimbursement credit has been criticized because it may create an incentive for employers to hire teenage student employees over adult non-student employees.  Although the legislation creating the reimbursement credit prohibits employers from discharging a non-eligible employee and hiring an eligible employee "solely for the purpose of qualifying for this credit," critics maintain that this provision will be difficult to enforce and point out that nothing in the legislation precludes employers from gradually replacing non-eligible employees with eligible employees through normal attrition rather than by discharging employees.  The reimbursement credit may also create an incentive for employers to keep student employees between the ages of 16 and 19 exactly at the minimum wage because payment of those employees above the minimum wage may result in loss of the reimbursement credit under the language of the legislation.

Based on this criticism, a bill has been introduced in the State Senate to repeal the minimum wage reimbursement credit.  The bill has been referred to the Senate Committee on Investigations and Government Operations.

Reminder: Wage Theft Prevention Act Annual Notices Must Be Issued to Employees By February 1, January 1, 2013.

January 8, 2013

By Subhash Viswanathan

Employers who have employees in New York are required to issue annual notices under the Wage Theft Prevention Act ("WTPA") to all New York employees between January 1 and February 1, 2013.  Although a bill was introduced in the New York State Legislature to repeal the annual notice requirement in early 2012 (which was the first year that the annual notice requirement was in effect), the bill passed in the Senate but remains dormant in the Assembly.  Therefore, the WTPA annual notice requirement continues to be in effect.

As we have summarized in previous blog posts, the annual notice must contain the following information:

  • the employee's rate or rates of pay (for non-exempt employees, this must include both the regular rate and overtime rate);
  • the employee's basis of pay (e.g., hourly, shift, day, week, salary, piece, commission, or other);
  • allowances, if any, claimed as part of the minimum wage (e.g., tips, meals, lodging);
  • the regular pay day; and
  • the name (including any "doing business as" name), address, and telephone number of the employer.

The annual notice must be provided to each employee in English and in the primary language identified by each employee, if the New York State Department of Labor ("NYSDOL") has prepared a dual-language form for the language identified by the employee.  At this point, the NYSDOL has prepared dual-language forms in Chinese, Haitian Creole, Korean, Polish, Russian, and Spanish.  The English-only and dual-language forms created by the NYSDOL are available on the NYSDOL's web site.  If an employee identifies a primary language other than one of the six languages for which a dual-language form is available, the employer may provide the annual notice in English only.  Employers are not required to use the NYSDOL's forms, but employers who create their own forms must be sure that all of the information required by the WTPA is included.

Employers are required to obtain a signed acknowledgment of receipt of the annual notice from each employee.  The acknowledgment must include an affirmation by the employee that the employee accurately identified to the employer his/her primary language, and that the notice was in the language so identified.  Signed acknowledgments must be maintained for at least six years.

Plan Ahead to Avoid Holiday Party Pitfalls

December 9, 2012

By Mark A. Moldenhauer

This article, authored by Mark Moldenhauer, originally appeared in the December 10, 2012 issue of the Buffalo Law Journal.

With calendars flipped to December, many companies are putting the final touches on holiday party plans.  These celebrations offer an opportunity to unwind, socialize, and reflect on the achievements of the past year, all outside of the hectic business environment.  Employers need to be aware, however, that holiday functions also raise a host of potential legal problems, especially when alcohol is served.  So while the trimmings and trappings deserve due attention, prudent employers should also consider ways to minimize the chance for a legal hangover.

1.  Boughs of Holly Are Fine -- Forget the Mistletoe!

Some people tend to exude an excessive amount of cheer during the holiday season.  Stories abound about executives dancing provocatively with interns or messengers flirting with the CEO’s spouse.  While no one wants to bah-humbug the festivities, it is important for employers to keep in mind that many of the same rules that apply in the workplace must be enforced at holiday parties.  This includes policies that prohibit sexual and other forms of harassment.

If you rely on a vendor or banquet facility to coordinate the event, be explicit that you intend this to be a professional function (yes, ask the DJ for a set list).  While gag gifts and "roasting" speeches might be popular, a fine line exists between good-natured ribbing and public humiliation.  Ideally, any gifts and planned remarks should be vetted and approved in advance.  Few things ring in the New Year worse than a hostile work environment or discrimination lawsuit.

2.  Take It Easy on the Eggnog

Whether it is loosening inhibitions or causing problems after-the-fact, alcohol is frequently the cause of holiday party problems.  As the sponsor, an employer must be keenly aware of the risks posed by serving alcohol and consider different options to reduce those risks.

In New York and several other states, “social hosts” are generally not liable for alcohol-related accidents or injuries suffered off-premises by third parties.  This is not the case in every state, so an employer should familiarize itself with the applicable law where the function is being held.  Also keep in mind that when revelers cross state lines, a claim might arise in one jurisdiction even though the host would not be liable to third parties in the state where the party actually occurred (for instance, a party in New York followed by an accident in New Jersey).  In addition, employees and guests under the age of 21 must never be served alcohol.  Many states, including New York, specifically allow claims against social hosts when alcohol is served illegally.  For this and other reasons, employers should insist that bartenders check ID or use some other system to ensure that they are not giving alcohol to underage attendees.

As for injuries suffered after the party by inebriated employees or guests, courts will typically find that a person’s voluntary intoxication caused his or her injury.  This includes situations where an employee or guest gets hurt in a motor vehicle accident.  Of course, this does nothing to lessen the non-legal consequences of someone becoming injured or worse while driving home from a holiday party.

On-premises injuries are a different story.  An employer has a duty to prevent harm to those on its property and in areas under its control, which could include an off-site facility that the employer leases for its holiday party.  If the employer learns that an employee or guest is intoxicated or otherwise acting inappropriately, reasonable steps should be taken to prevent the situation from escalating.

An employer-sponsored holiday party will almost certainly be considered as relating to employment, even if attendance is voluntary.  As a result, the exclusive remedy for an employee who suffers an injury at the party will normally be workers’ compensation benefits.  That said, injuries caused solely by alcohol consumption are normally deemed non-compensable under most workers’ compensation laws, including New York’s.  Also, injuries suffered in a car accident during an employee’s drive home will not likely be covered since commuting is generally considered outside the scope of employment for workers’ compensation purposes.

3.  Make Your List . . . and Check it Twice

 Without a doubt, holiday parties have their advantages, including the positive impact on employee morale.  Employers are encouraged, however, to do some advance planning in order to at least reduce potential risks.  Taking proactive steps will hopefully allow everyone to enjoy themselves, both during and after the party.

In addition to the measures discussed above, consider taking the following steps to help ensure that your festivities remain safe and jolly:

  • Arrange transportation to and from the event or notify employees and guests that the company will cover cab fare;
  • Coordinate discounted rates for employees and guests with nearby hotels;
  • If the party is on the employer’s premises, hire a professional bartender or caterer and confirm that they carry sufficient liability insurance;
  • Instruct bartenders to serve conservatively, “cut off” anyone who appears intoxicated and prohibit employees and guests from serving drinks;
  • Limit the amount of alcohol served by providing non-alcoholic options, reducing the hours of open bar, giving attendees vouchers for drinks or using a cash bar;
  • Recruit spotters to watch for excessive drinking and other inappropriate behavior;
  • Serve foods that are rich in starch or protein to slow the absorption of alcohol and avoid salty foods that encourage people to drink;
  • Contact your insurance carriers to discuss whether current policies provide sufficient coverage and, if not, purchase a product that will;
  • Consider alternative formats which discourage heavy drinking, such as a breakfast or lunch function or a party with significant others and children;
  • Advise employees that attendance is strictly voluntary and refrain from activities that can be viewed as compensable work under the Fair Labor Standards Act;
  • Schedule the party on a day that will not conflict with any employee’s religious observances; and, last but not least,
  • Remember:  “Holiday Party” not “Christmas Party”!  Most workplaces are incredibly diverse and comprised of individuals who celebrate a variety of religious and secular holidays.  Do not engender feelings of exclusion by emphasizing one particular set of traditions or beliefs.

Reminder to Employers: New York Election Law Notices Should Be Posted No Later Than October 23, 2012

October 18, 2012

As campaign ads, mailings, and yard signs flood New York, voters across the State are constantly reminded that election season is upon us.  With the general election only a few weeks away, it is also a reminder to employers that New York’s Election Leave Law requires all employers to post a voting leave notice at least ten (10) working days before “every election.”  This year, the general election will be held on November 6, 2012.  Therefore, employers must, if they have not already done so, post a notice no later than October 23, 2012.

A sample of the notice required under the New York Election Law can be found on the New York State Board of Elections’ website.  This notice must be posted at least ten (10) working days before the election “conspicuously in the place of work where it can be seen as employees come or go to their place of work” and must remain in place until the polls close on Election Day.  The Election Law requires the notice to be posted before “every election” – not just general elections – so employers should consider whether to keep this notice posted throughout the year.

In addition to posting the notice, employers should also make sure to afford employees voting leave when obligated to do so.  Under New York Election Law § 3-110, registered voters are entitled to take up to two (2) hours of paid time off from work if they do not have “sufficient time" outside of their working hours to vote.  If the registered voter has four (4) consecutive hours either between the opening of the polls and the beginning of the working shift, or between the end of the working shift and the closing of the polls, it will be assumed that the voter has sufficient time to vote.  (For general elections, the polls in New York State open at 6:00 a.m. and close at 9:00 p.m.).

However, the voter is not automatically entitled to take paid time off to vote if he or she does not have four consecutive hours at the beginning or at the end of the working shift.  The voter must still show that the time he or she has at the beginning or at the end of the working shift is not sufficient to vote.  If the voter can make such a showing, the voter will be entitled to take only as much paid time off (up to a maximum of two (2) hours) that, when added to the voting time the voter has outside working hours, will enable the individual to vote.  Furthermore, New York’s Election Leave Law requires employees to notify the employer at least two (2) working days, but not more than ten (10) working days, prior to the election of the need for voting leave.  For this year’s general election, requests for time off to vote should be made between Tuesday, October 23, 2012 and Friday, November 2, 2012.  The employer may designate that this paid leave be taken off at the beginning or the end of the working shift, unless there is another mutually-agreed upon time.

Appellate Court Holds That Employers Who Hire Undocumented Aliens Are Still Entitled to the Protections of the Workers' Compensation Law

October 15, 2012

By Richard S. Finkel

On September 26, 2012, the Second Department Appellate Division held that an employer who hires undocumented aliens in violation of the Immigration Reform and Control Act of 1986 ("IRCA") is still shielded by the Workers' Compensation Law if those employees are injured on the job.

IRCA was adopted by Congress in an attempt to curtail illegal immigration.  Toward that end, it imposed a duty upon employers to verify a prospective employee's identity and work eligibility by examining the individual's documentation prior to hiring.  Absent the requisite documentation, employment cannot be offered.  Employers who violate IRCA are subject to civil and criminal penalties.

The Workers' Compensation Law insulates employers from personal injury claims brought by their employees, and also precludes third party claims against the employer for contribution and indemnification except in instances of “grave injury” or where the employer contracted to provide such indemnification.

How do these federal and state provisions relate?  In a matter of first impression, the Second Department Appellate Division was asked to decide whether the protection afforded employers under the Workers' Compensation Law was still available in the event that the employer violated IRCA.  Yes, it was, according to the decision in New York Hospital Medical Center of Queens v. Microtech Construction Corp.

In arriving at that conclusion, the Court made several observations.  First, it noted that in adopting IRCA, Congress expressly preempted all state and local laws that imposed civil or criminal sanctions upon employers for similar offenses.  It also observed that the statute was silent as to any further preemptive effect.  Indeed, to the contrary, IRCA’s legislative history demonstrated a lack of intent to diminish existing labor protections.  Consistent with that conclusion, the Court determined that there could be no express preemption of the Workers' Compensation Law, as none of its relevant provisions seek to impose civil or criminal sanctions for employing undocumented aliens.

While the Court acknowledged that stripping away the protections of the Workers' Compensation Law from an IRCA-violating employer may support the federal statute’s ultimate goals, it held nevertheless that retaining such protections despite an IRCA violation did not present such an obstacle to attaining Congress’ objectives that the Workers' Compensation Law could be considered preempted.  Thus, the Court ruled that an IRCA violation did not serve to diminish or remove the protections afforded an employer under the Workers' Compensation Law.

Governor Cuomo Signs Amendment to Wage Deduction Statute

September 10, 2012

By Andrew D. Bobrek

As we reported in a prior blog post, an amendment to New York's wage deduction statute -- New York Labor Law Section 193 -- was passed by the Senate and Assembly in June.  Governor Andrew Cuomo signed the legislation on September 7.  This amendment – effective on November 6, 2012 – will permit New York employers to make a wider range of payroll deductions than currently enumerated in Section 193 and will impose several new deduction-related requirements.

As many employers are aware, the New York State Department of Labor (“NYSDOL”) in recent years significantly narrowed its interpretation of Section 193.  To summarize, NYSDOL has taken the position that a wage deduction is not permissible unless it is very “similar” to those expressly recognized in the statute as lawful (e.g., deductions for “insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, payments for United States bonds, [and] payments for dues or assessments to a labor organization”).  This interpretation varied from the NYSDOL’s historical focus on whether the deduction is for the “benefit of the employee.”

Diverging from this historical focus, NYSDOL more recently opined that the following types of employee wage deductions, among others, are unlawful:  (a) deductions for loans, wage overpayments, or wage advances owed to an employer; (b) deductions for the recoupment of tuition assistance monies owed to an employer; and (c) deductions for purchases from employers or employer-sponsored stores, cafeterias, and like establishments.  To reiterate, NYSDOL found these types of deductions to be unlawful (even with an employee’s voluntary agreement and written authorization) because they were not sufficiently “similar” to Section 193’s enumerated list of permissible payments.

Fortunately for New York employers and employees, the recent amendment to Section 193 will expand the enumerated list of permissible wage deductions to include deductions for:

  • Prepaid legal plans;
  • Purchases made at events sponsored by a bona fide charitable organization affiliated with the employer, where at least twenty percent of the profits from the event are contributed to a bona fide charitable organization;
  • Discounted parking or discounted passes, tokens, fare cards, vouchers, or other items that entitle an employee to use mass transit;
  • Fitness center, health club, and/or gym membership dues;
  • Cafeteria and vending machine purchases made at the employer’s place of business and purchases made at gift shops operated by the employer, where the employer is a hospital, college or university;
  • Pharmacy purchases made at the employer’s place of business;
  • Tuition, room, board, and fees for pre-school, nursery, primary, secondary, and/or post-secondary educational institutions;
  • Day care, before-school and after-school care expenses; and
  • Payments for housing provided at no more than market rates by non-profit hospitals or affiliates.

The amendment will also expressly permit deductions made in conjunction with an employer-sponsored pre-tax contribution plan approved by the Internal Revenue Service or other local taxing authority.  As the above list indicates, some of the new enumerated deductions will only be permitted for certain types of employers (e.g., hospitals, colleges and universities).  It is not apparent why legislative drafters included these limitations.

Importantly, the amendment will additionally permit employers to recover inadvertent wage overpayments and wage advances by payroll deductions under certain circumstances and subject to future NYSDOL rulemaking.  According to the amendment, these forthcoming rules must include provisions governing the terms and conditions under which employers may deduct for wage overpayments and advances and must also include provisions relating to employee notice and dispute resolution procedures.

The amendment also imposes new deduction-related requirements, which New York employers must follow.  For example, the amendment provides that “all terms and conditions of the payment and/or its benefits and the details of the manner in which the deductions will be made” must be provided to employees in advance.  Additionally, employers must give advanced notice to employees if there is a “substantial change” in the terms or conditions of the payment (e.g., a change in the amount of the deduction, or in the corresponding benefits).  The amendment also establishes limitations on the total amount of deductions that may be made for certain purposes each pay period, and requires that employees have access to real-time information regarding certain deduction-related expenses.

Employers must now also keep any “written authorization” required under Section 193 for the respective employee’s entire period of employment and, then, for an additional six (6) years after the end of that employment.  For employers with union-represented workers, the amended Section 193 clarifies that the requisite “written authorization” may be provided pursuant to the terms of a collective bargaining agreement.  Except where a deduction is “required or authorized” in such a current collective bargaining agreement, the amendment further provides that employees are free to revoke their authorization at any time.  In such an event, employers must then cease the wage deduction in question “as soon as practicable” and not later than four pay periods or eight weeks after the employee’s revocation, whichever occurs sooner.

Finally, New York employers should take note that the amendment has a three-year “sunset” provision, and, therefore, would require additional legislation to make the corresponding changes to Section 193 permanent.  As with any new legislation, employers should carefully review the amendment to Section 193 and should prepare accordingly in advance of the pending effective date.

Fourth Department Appellate Division Upholds Validity of Wicks Law Amendments

August 31, 2012

By Richard S. Finkel

On July 6, 2012, the Fourth Department Appellate Division held that the 2008 amendments to the Wicks Law, including a requirement that contractors and subcontractors participate in apprentice training programs approved by the Department of Labor in order for a project labor agreement ("PLA") to qualify for an exemption from the Wicks Law, are valid and constitutional.

The Wicks Law requires that governmental entities in New York prepare separate bid specifications and award separate contracts for the plumbing, heating and ventilation, and electrical components of those publicly-funded construction projects that exceed their monetary cost threshold.  This requirement is often fiscally and administratively burdensome to the public entity.

In 2008, to alleviate some of that stress, the formerly uniform monetary threshold was modified to a three-tier system with trigger amounts of $3,000,000 for the five New York City counties, $1,500,000 for Nassau, Suffolk and Westchester, and $500,000 for all other counties.  Labor Law Section 222 was adopted at the same time, providing for a full exemption from the Wicks Law requirements where the project is covered by a qualifying PLA.  The statute defines a PLA as:

a pre-hire collective bargaining agreement between a contractor and a bona fide building and construction trade labor organization establishing the labor organization as the collective bargaining representative for all persons who will perform work on a public project, and which provides that only contractors and subcontractors who sign a pre-negotiated agreement with the labor organization can perform project work.

In order for the PLA to qualify the project for exemption, it must provide that each contractor and subcontractor participate in apprentice training programs approved by the Department of Labor.

In Empire State Chapter of Associated Builders and Contractors v. M. Patricia Smith, both the three-tier threshold and the apprentice training program requirement were challenged as unconstitutional.  The three-tier threshold was attacked, in part, upon the premise that it was enacted with procedural deficiencies that violated the home rule provisions of the New York State Constitution.  However, the Court held that the enactment bore a direct and reasonable relationship to a substantial State concern, and was a valid exercise of legislative power under Article IX of the Constitution.

The apprentice training program requirement was challenged as exclusionary.  According to the plaintiffs, it unfairly burdened contractors and subcontractors by requiring them to maintain apprentice training programs of their own, for all public projects meeting the new thresholds.  They argued that the legislation served to disqualify out-of-state contractors from large public construction projects, and inhibited a disproportionate number of minority-owned and women-owned businesses from qualifying for work on such projects.  The Court disagreed with the plaintiffs' interpretation of Labor Law Section 222.  The Court held that the apprentice training requirement is not universal, and applies only to those projects where the government entity has elected to utilize a PLA.  Further, the Court also held that any contractor or subcontractor entering into a qualifying PLA is deemed to be participating in an apprentice training program.  The individual contractors and subcontractors need not maintain an apprentice training program of their own.

In the aftermath of the Fourth Department's decision, it would be economically prudent for governmental entities to examine the feasibility of a PLA that complies with Labor Law Section 222 for their next public construction project.

New York's Wage Deduction Statute Poised for Amendment

June 21, 2012

By Andrew D. Bobrek

Yesterday, an amendment to New York’s wage deduction statute – New York Labor Law Section 193 – passed both the New York State Senate and Assembly.  The amendment is expected to be signed by Governor Cuomo.  This legislation, if enacted, would permit employers to make a wider range of payroll deductions than currently enumerated in Section 193.

As we previously reported, the New York State Department of Labor has over the last couple of years issued several opinion letters which significantly narrow its interpretation of Section 193.  To summarize, NYSDOL has taken the position that a wage deduction is not permissible unless it is very similar to those expressly recognized in the statute as lawful (e.g., payments for insurance premiums, pension, or health and welfare benefits).  This interpretation varies from the NYSDOL’s historical focus on whether the deduction is for the “benefit of the employee.”

The pending amendment to Section 193 would expand the enumerated list of permissible wage deductions to include, among other things, deductions for:  (1) discounted parking costs; (2) certain mass transit costs; (3) gym membership dues; (4) certain cafeteria, vending machine, and gift shop purchases; (5) pharmacy purchases made at the employer’s place of business; (6) tuition, room, and board payments for educational pursuits; and (7) day care costs.  Notably for employers, the legislation would also permit the recovery of wage overpayments and wage advances by payroll deduction under certain circumstances and subject to future NYSDOL rulemaking.

We will continue to monitor this development and will provide additional details on our blog if and when the amendment is signed into law.

New York Court of Appeals Holds That the Division of Human Rights Lacks Jurisdiction Over Discrimination and Harassment Complaints Filed by Public School Students

June 21, 2012

By Subhash Viswanathan

Employers in New York are well aware that the state agency that has jurisdiction over employment discrimination and harassment claims under the New York Human Rights Law (“NYRHL”) is the New York State Division of Human Rights (“Division”). The Division also has jurisdiction under the NYHRL to investigate and adjudicate certain other types of discrimination claims outside the employment context, such as alleged housing discrimination. However, in a recent case handled by Bond, Schoeneck & King on behalf of the Ithaca City School District (“ICSD”), the Division’s overly broad interpretation of its jurisdiction was curtailed by New York’s highest court. On June 12, 2012, the New York Court of Appeals held that the Division does not have jurisdiction over discrimination and harassment complaints filed by public school students under the NYHRL.

The case began in 2006, when a parent of a middle school student filed a complaint with the Division, alleging that her daughter had been subjected to racial harassment by other middle school students. The complainant alleged that ICSD was liable for the harassment under Section 296(4) of the NYHRL, which provides:

It shall be an unlawful discriminatory practice for an education corporation or association which holds itself out to the public to be non-sectarian and exempt from taxation pursuant to the provisions of article four of the real property tax law . . . to permit the harassment of any student or applicant, by reason of his race, color, religion, disability, national origin, sexual orientation, military status, sex, age or marital status . . . .

ICSD commenced a proceeding in Supreme Court, Tompkins County, under Article 78 of the Civil Practice Law and Rules, seeking an order prohibiting the Division from exercising jurisdiction over the complaint on the ground that a public school district is not an “education corporation or association” under Section 296(4) of the NYHRL. The court denied ICSD’s petition, and held that the Division could conduct a hearing regarding the complaint.

A hearing was held before a Division Administrative Law Judge (“ALJ”). The ALJ issued a recommended decision finding ICSD liable for the harassment of the student by other middle school students. The Commissioner of Human Rights adopted the ALJ’s recommended decision regarding liability, but reduced the amount of the ALJ’s recommended damages award to the student and her mother.

ICSD appealed the Commissioner’s decision on several grounds, including the same jurisdictional ground upon which the initial Article 78 proceeding had been based. This time, the Supreme Court, Tompkins County, granted ICSD’s appeal and annulled the determination of the Commissioner. The court held that ICSD was not an “education corporation or association” under the NYHRL and that the Division therefore lacked jurisdiction over the complaint.

The Division appealed the decision to the Third Department Appellate Division, which reversed and held that the term “education corporation or association” should be interpreted broadly to include public school districts such as ICSD.

ICSD appealed the Third Department’s decision to the New York Court of Appeals. In a 4-3 decision, the Court of Appeals reversed the Third Department and held that a public school district is not an “education corporation or association” under the NYHRL and that the Division does not have jurisdiction over complaints filed by public school students for alleged discrimination or harassment. The Court of Appeals thoroughly analyzed the legislative history of the term “education corporation or association,” and determined that the legislature never intended that term to include public school districts.

The Court of Appeals rejected the Division’s argument that the term “education corporation or association” should be liberally construed, stating that “it is evident from the legislative history that the term ‘education corporation or association,’ the origins of which can be traced to the Tax Law, refers to only private, non-sectarian entities that are exempt from taxation under [article four of the real property tax law].” The Court of Appeals also observed that a public school district would never need to “hold itself out to the public to be non-sectarian and exempt from taxation” as stated in Section 296(4) of the NYHRL because all public school districts are non-sectarian and all public school districts are exempt from taxation by virtue of the fact that they are public entities.

Accordingly, although the Division can still exercise jurisdiction over employment discrimination and harassment claims filed against public school districts under the NYHRL, it can no longer exercise jurisdiction over discrimination and harassment claims filed by public school students.

Lawmakers Scrutinize Employer Efforts to Access Employee and Applicant Private Social Media Web Sites

April 28, 2012

By Christa Richer Cook

As we noted in our June 17, 2010 blog post, social networking sites have become a popular tool for employers seeking information about job applicants during the hiring process.  However, employers' efforts to obtain information that enables them to access their employees' and applicants' private social media web sites have recently been subject to increased scrutiny by New York State and Federal legislators.

On April 13, 2012, New York State Senator Liz Krueger sponsored and introduced a bill that would prohibit employers, as well as their agents or representatives, from requiring employees or job applicants to disclose log-in names, passwords, or other means for accessing a personal account or service through an electronic communications device.  This includes information such as private social media account log-in names and personal e-mail account passwords.  This proposed legislation would also prohibit employers from discharging, disciplining, or otherwise penalizing an employee, or failing to hire an applicant, based on the refusal to provide information that would enable the employer to access personal accounts or services through an electronic communications device.  The New York Attorney General would have the authority under the proposed legislation to enjoin employers from committing such unlawful practices, and employers could be subject to a $300.00 fine for a first offense and a $500.00 fine for each subsequent offense.

This proposed legislation comes just weeks after U.S. Senators Charles Schumer (D-NY) and Richard Blumenthal (D-CT) sent open letters to the Equal Employment Opportunity Commission and the U.S. Department of Justice urging the agencies to investigate employers' practice of requiring applicants to provide Facebook and e-mail passwords as a condition for job interviews.

Efforts to enact legislation similar to the New York bill are currently underway in several states.  In fact, Maryland recently became the first state to enact legislation that prohibits employers from requiring that employees or applicants disclose user names, passwords, or other means for accessing a personal account or service through an electronic communications device.

As we indicated in our June 17, 2010 blog post, employers should be careful even when viewing publicly available information regarding applicants on social media web sites.  Because Facebook and other similar web sites potentially contain a plethora of information about job applicants that employers cannot consider during the hiring process (e.g., race, national origin, religion, marital status, sexual orientation, etc.), employers should exercise caution in using social media web sites to screen applicants.  Employers who choose to use social media in the hiring process should promulgate a clear policy and procedure for utilizing this tool, and should closely follow the developments in this area of the law.

Court of Appeals Holds That Workers' Compensation Exclusivity Provision Does Not Apply To Uninsured Motorist Benefits

March 1, 2012

By Subhash Viswanathan

On December 13, 2011, the New York Court of Appeals held that an employee who drives his employer's vehicle, and has an automobile accident with an uninsured driver while driving his employer's vehicle during the course of his employment, is entitled to recover uninsured motorist benefits from his self-insured employer, notwithstanding the exclusivity provision of the New York Workers' Compensation Law.

In Matter of Elrac, Inc. v. Exum, Birtis Exum was employed by Elrac, Inc., and had an automobile accident while driving a vehicle owned by Elrac.  The other vehicle involved in the accident was driven by an individual who did not have automobile liability insurance.  Elrac was self-insured for automobile liability purposes, pursuant to Section 370(3) of the Vehicle and Traffic Law, so it had not obtained an insurance policy to cover the vehicle that Exum was driving.

Under Insurance Law Section 3420(f)(1), every motor vehicle liability insurance policy must contain a provision requiring payment to the insured of damages up to $25,000 in the case of injury and up to $50,000 in the case of death, in the event that the insured has an accident with an owner or operator of an uninsured motor vehicle.  Because Elrac was self-insured, Exum sought to recover those damages directly from Elrac.  Elrac argued that Exum was barred by the exclusivity provision of the Workers' Compensation Law from recovering uninsured motorist benefits, because Exum's injuries arose during the course of his employment.

The Court of Appeals disagreed with Elrac, holding that Exum's claim for uninsured motorist benefits submitted to his self-insured employer was not barred by the exclusivity provision of the Workers' Compensation Law because "[t]he situation is as though the employer had written an insurance policy to itself, including the statutorily-required provision for uninsured motorist coverage."  The Court of Appeals reasoned that Exum would have been able to recover uninsured motorist benefits from an insurance company if Elrac had not been self-insured, and determined that those same benefits were recoverable directly from Elrac.  Based on this reasoning, the Court of Appeals affirmed the Appellate Division's decision to allow Exum to proceed with his claim.

Bill Introduced in the New York State Legislature to Repeal the WTPA Annual Notice Requirement

January 24, 2012

By Subhash Viswanathan

A bill has been introduced in the New York State Legislature that would, if enacted, repeal the annual wage notice requirement imposed by the Wage Theft Prevention Act ("WTPA").  The bill would leave intact the requirement that employers provide a wage notice to all new hires, as well as the requirement that employers obtain signed written acknowledgments of the new hire wage notices.  At this point, the bill is in its infant stages, and no vote has been taken.

The Business Council of New York State has submitted a memorandum in support of the bill, and has created a web page for employers to join in the effort to convince the New York State Legislature to repeal the annual wage notice requirement.