New York State's Acting Commissioner of Labor, Mario Musolino, issued an Order today, accepting most of the recommendations made by the Hospitality Industry Wage Board, including the recommendation to increase the minimum wage for all tipped employees in the Hospitality Industry to $7.50 per hour effective December 31, 2015. The one recommendation that the Acting Commissioner rejected was the one that would have provided certain employers with some relief from this significant increase in labor costs -- namely, the recommendation to allow employers to take $1.00 off the hourly minimum wage for tipped employees if the weekly average earnings of their employees (wages paid plus tips received) equals or exceeds 150% of the regular minimum wage in New York City or 120% of the regular minimum wage in the rest of the state. So, to summarize, the Acting Commissioner's Order will: (1) increase the minimum wage for all tipped employees in the Hospitality Industry (regardless of whether they are classified as food service workers, service employees, or resort hotel service employees) to $7.50 per hour effective December 31, 2015; and (2) implement a $1.00 increase in the minimum wage for tipped employees in the Hospitality Industry who work in New York City, which would take effect if and when the legislature enacts a higher minimum wage rate for New York City. The Acting Commissioner also accepted the Wage Board's recommendation to review whether the current system of cash wages and tip credits should be eliminated. The Acting Commissioner's Order will be effective 30 days after notice of its filing is published in at least 10 newspapers of general circulation in the state. Employers in the hospitality industry should begin to consider how this significant increase in labor costs attributable to the employment of food service workers and service employees will impact their businesses in 2016 and beyond.
The U.S. Department of Labor ("DOL") today announced a change to the definition of spouse under the Family and Medical Leave Act ("FMLA"). Under this new rule, which will be published later this week (on February 25, 2015), an employee in a legal same-sex marriage will be entitled to use FMLA leave to care for a same-sex spouse regardless of where the employee lives. The DOL initially proposed the rule on June 20, 2014. This change was triggered by the U.S. Supreme Court’s 2013 decision in U.S. v. Windsor. In Windsor, the Court ruled that the federal Defense of Marriage Act ("DOMA") was unconstitutional. Prior to Windsor, and consistent with DOMA, the FMLA defined spouse as a marriage between a man and a woman. This meant that same-sex married couples could not use FMLA leave to care for each other. Immediately following Windsor, the DOL announced that an employee could take FMLA leave to care for a same-sex spouse, but only if the employee resided in a state that recognized same-sex marriage (i.e., a “state of residence” approach). This interpretation meant that a category of same-sex spouses were still unable to use the protections of the FMLA: those who married in a state recognizing same-sex marriage, but who lived in a state that did not. This latest rule change, which takes effect on March 27, 2015, shifts to a “place of celebration" approach and ensures that same-sex spouses have the same rights as all spouses to exercise FMLA rights. In other words, as long as the employee is legally married, and regardless of the legal status of same-sex marriage in the state the employee now resides, the employee can take FMLA leave:
to care for a same-sex spouse with a serious health condition;
to care for a stepchild who is the child of a same-sex spouse;
to care for a stepparent who is the same-sex spouse of the employee’s parent;
due to a qualifying exigency related to the same-sex spouse’s covered military service; or
to care for a covered servicemember who is a same-sex spouse.
Ahhh, Valentine’s Day, when love is all around. But if one of Cupid’s arrows lands in your workplace, that warm and fuzzy feeling can quickly turn into headache and indigestion.
In your approach to managing office romance, consider the following:
A total ban on workplace romance may be a total disaster. A blanket prohibition against co-workers dating each other may be legal, but it brings with it serious practical problems. Love being what it is, an employer policy against romantic attraction has little chance of actually preventing it. Add to this the morale problem of what may be viewed as a heavy-handed policy, and a total ban against dating may be more cure than needed.
Consider a more tailored tact. Another approach is to have a policy articulating a ban on some, but not all, romantic relationships. For instance, a policy might prohibit employees in a direct reporting relationship from being romantically involved. If appropriate for your company’s culture, the policy could provide that no person at a certain management level and above (perhaps a Director level) may be involved romantically with any other employee, regardless of reporting lines. In some workplaces, a ban on relationships between employees in certain functions, such as those designed to be financial checks and balances on each other, may be appropriate. Yet another approach is a policy that does not prohibit relationships in any specific context but states that the company may find a romantic relationship incompatible with its legitimate business interests, depending on the circumstances. In any policy, leave open the possibility that the company may disapprove of romantic relationships in contexts beyond any specifically discussed, including where the company deems there to be a conflict of interest or a risk of financial fraud or collusion.
Consider requiring disclosure of relationships. It is generally a good idea to require that romantic relationships, or at least those where one person holds a supervisory role, be disclosed to higher management. Often, it is not the existence of the relationship that creates the problem but the fact that higher management is not aware of the relationship until something -- a conflict of interest or a harassment allegation -- hits the proverbial fan. A disclosure requirement is designed to avoid this. An additional advantage of a disclosure requirement is that it provides another basis for adverse action against a non?disclosing manager: the reason for discipline or even termination is not necessarily the fact of the relationship but the failure to be honest about it.
Confirming that the relationship is consensual is often a good idea. If, as a human resource professional, you become aware that employees are romantically involved, you should consider whether it is appropriate to confirm that the relationship is welcome. If the relationship is between peers, this may be an unnecessary intrusion into private lives. However, when the relationship involves employees of unequal power within the organization, it is critical. This conversation need not be detailed or probing but only enough to ensure that the subordinate employee is comfortable with the situation and to inform him/her that, if that should ever change, he/she has a right to have the romantic attention stop immediately and to report it to human resources if it does not. Find an appropriate way to document the conversation (which may be as simple as a confirming email or as formal as a letter signed by the employee, depending on the circumstance).
Do not be shy about confronting inappropriate behavior. An employer has an interest in ensuring that a relationship does not become a distraction or offensive to others. If your company love birds are indiscreet, the company can and should require them to keep their behavior professional at work.
Get legal advice before terminating or demoting. Generally speaking, an employer acts lawfully when it demotes or even terminates an employee as a result of a consensual workplace relationship. However, there are nuances. If one gender tends to be fired or demoted by the employer when romances occur, the employer may be liable for gender discrimination. And, an employee fired or demoted may have a sudden change of perspective and decide that the relationship was really harassment after all. Other concerns arise if the relationship has soured and the employees are no longer able to work together. A consultation with counsel is recommended to ensure that the company has fully accounted for any potential legal issues before taking action.
On September 15, 2014, the New York State Commissioner of Labor assigned the three-member Hospitality Industry Wage Board ("Wage Board") with the task of reviewing and making recommendations regarding what changes, if any, should be made to the minimum wage rates and tip credits for food service workers and service employees in the hospitality industry. After conducting several meetings, the Wage Board voted on January 30, 2015, to recommend that the minimum wage rate for all tipped employees in the hospitality industry (regardless of whether they are classified as food service workers or service employees) be increased to $7.50 per hour effective December 31, 2015. The webcast of the Wage Board's January 30 meeting can be found here.
Governor Cuomo has expressed his support for the Wage Board's recommendation, which will now be reviewed by the Commissioner of Labor. If the Commissioner of Labor accepts the Wage Board's recommendation, the Hospitality Industry Wage Order will be revised to reflect the increase.
Under the current Hospitality Industry Wage Order, employers are required to pay food service workers a minimum wage of at least $5.00 per hour, and may take a tip credit of no more than $3.75 per hour, provided that the total amount of tips received plus the wages paid equals or exceeds the current regular minimum wage of $8.75 per hour. The term "food service worker" is defined as any employee who is primarily engaged in serving food or beverages and who regularly receives tips. This includes "front of the house" employees such as wait staff, bartenders, captains, and bussing personnel, but excludes delivery workers. Employers are currently required to pay service employees (other employees in the hospitality industry who customarily receive tips but are not involved in serving food or beverages) a minimum wage of at least $5.65 per hour, and may take a tip credit of no more than $3.10 per hour, provided that the total amount of tips received plus the wages paid equals or exceeds $8.75 per hour. Service employees at resort hotels are subject to a special rule that allows them to be paid a minimum wage of at least $4.90 per hour. Non-service employees ("back of the house" employees such as cooks and dishwashers) must be paid the regular minimum wage of $8.75 per hour, and no tip credit may be taken for those employees.
So, the Wage Board's recommendation (if it is accepted by the Commissioner of Labor) would drastically increase the tipped employee minimum wage as of December 31, 2015, by $2.50 for food service workers, by $1.85 for most service employees, and by $2.60 for service employees at resort hotels. The Wage Board also voted to make two other recommendations to the Commissioner of Labor: (1) if the legislature enacts a higher regular minimum wage for New York City, then the minimum wage for tipped employees in the hospitality industry who work in New York City would increase by $1.00 effective on the date that the higher regular minimum wage goes into effect; and (2) if a hospitality industry employer can demonstrate that the weekly average earnings of an employee (wages paid plus tips received) equals or exceeds 120% of the regular minimum wage (or 150% of the regular minimum wage if the employee works in New York City), then the employer would be eligible to pay $1.00 less than the applicable tipped employee minimum wage.
Employers in the hospitality industry should begin to consider how this potentially significant increase in labor costs attributable to the employment of food service workers and service employees will impact their businesses, and should evaluate what adjustments may need to be made in the event that the Commissioner of Labor accepts and implements the Wage Board's recommendation. We will report on any further developments as they occur.
In a victory for Home Care employers, the U.S. District Court for the District of Columbia issued consecutive decisions which struck down two regulations issued by the U.S. Department of Labor (“USDOL”) that would have eviscerated the “companionship exemption” contained in the Fair Labor Standards Act (“FLSA”). The two USDOL regulations enacted in late 2013 were prevented from taking effect, as scheduled, on January 1, 2015, by two related decisions on December 22, 2014 and January 14, 2015, which vacated both regulations on the ground that they “conflicted with the [FLSA] statute itself.” Each of the two challenged regulations would have imposed greater overtime obligations on Home Care employers, by sharply reducing the reach of the FLSA “companionship exemption,” which, for 40 years, had excluded most Home Care work from federal overtime laws. Specifically, the exemption excludes from federal minimum wage and overtime obligations companionship and live-in “services which provide fellowship, care and protection to a person who, because of advanced age or physical or mental infirmity, cannot care for his or her own needs,” unless the work is performed by a Registered Nurse or similarly trained professional. In the first of the two decisions, the District Court struck down a USDOL regulation that would have eliminated the companionship exemption unless the Home Care worker is employed directly by the patient or household itself, rather than by an Agency. Since the vast majority of Home Care workers are employed by Home Care Agencies, this new regulation would have had sweeping impact, had it taken effect. In striking down the regulation, the Court held that “Congress intended the exemption to apply to all employers who provide companionship and live-in domestic services. . . .” It curtly rejected the new regulation as contrary to the statute, noting that “Congress surely did not delegate to the [USDOL] here the authority to issue a regulation that transforms defining statutory terms . . . based on who cuts a check, rather than what work is being performed.” Shortly thereafter, on January 14, 2015, the Court addressed a second USDOL regulation which redefined – and significantly narrowed – the type of work that would be covered under the companionship exemption, restricting it to only those companions who provide “care” or assist with “activities of daily living” during less than 20% of their total hours. Since Home Care is routinely intended to provide significant assistance with activities of daily living (such as driving, meal preparation, dressing, feeding and bathing), this regulation virtually eliminated the companionship exemption. The Court rejected the regulation on the ground that it contradicts the FLSA itself. The statutory exemption refers to “care” and services for the elderly and disabled “who are unable to care for themselves.” The Court determined that the USDOL regulation would “write out of the exemption the very ‘care’ the elderly and disabled need . . . .” In a closing flourish, the Court scolded the USDOL for usurping Congressional authority:
Redefining a 40-year-old exemption out of existence may be satisfyingly efficient to the Department of Labor, but it strikes at the heart of the balance of power our Founding Fathers intended to rest in the hands of those who must face the electorate on a regular basis.
Taken together, the two decisions wholly restore the previously-existing companionship and live-in exemptions from federal minimum wage and overtime laws. An appeal to a higher federal court may well follow, so the two decisions may not be the final word on the USDOL Regulations. It remains prudent to continue to follow this issue closely for further development, and to consult counsel if needed. In addition, Home Care Agencies in New York should take note that, even in the absence of the applicability of federal minimum wage and overtime laws, New York law requires that home care employees be paid a minimum wage of $8.75 per hour, and requires that hours over 40 in a work week be paid at 1½ times the State minimum wage (i.e., $13.125 per hour) rather than 1½ times the employee’s regular rate.
In early December, the U.S. Department of Labor's Office of Federal Contract Compliance Programs ("OFCCP") announced the issuance of its final rule implementing Executive Order 13672, which amends Executive Order 11246 by prohibiting Federal contractors from discriminating against employees or applicants based on their sexual orientation or gender identity. The final rule was published in the Federal Register on December 9, 2014, and will become effective April 8, 2015.
The OFCCP did not release a notice of proposed rulemaking. According to an OFCCP FAQ: “President Obama’s Executive Order was very clear about the steps the Department of Labor was required to take, and left no discretion regarding how to proceed. In such cases, principles of administrative law allow an agency to publish final rules without prior notice and comment when the agency only makes a required change to conform a regulation to the enabling authority, and does not have any discretion in doing so.”
The regulations will apply to employers that enter into or modify Federal contracts on or after April 8, 2015. Contractors will need to revise the equal employment opportunity clause in new or modified subcontracts or purchase orders, “ensuring that applicants and employees are treated without regard to their sexual orientation and gender identity, and by updating the equal opportunity language used in job solicitations and posting updated notices.” OFCCP and EEOC are working together to update the EEO is the Law Poster; Federal contractors should continue to use the existing poster until a new one is finalized.
Executive Order 13672 and the new final rule are in addition to the pre-existing prohibition on gender identity discrimination, which is a form of sex discrimination in violation of Executive Order 11246. OFCCP memorialized this in an Agency Directive dated August 19, 2014.
The regulations also make a change to the visa reporting provision. Contractors that are unable to obtain a visa for an employee and believe that it is because of the employee’s sexual orientation or gender identity will be required to report it to the OFCCP and the State Department.
The final rule does not require contractors to: (1) make changes to Affirmative Action Plans; (2) collect data or set placement goals on the sexual orientation or gender identity of applicants or employees; or (3) solicit voluntary self-identification of applicants’ or employees’ sexual orientation or gender identity. In addition, there is no change to the current religious exemption.
The Department of Labor’s Wage and Hour Division has published on its website a list of frequently asked questions and President Obama's Press Secretary has published a fact sheet about Executive Order 13672.
Happy New Year! On December 29, Governor Cuomo signed the bill eliminating the requirement under the Wage Theft Prevention Act that employers in New York provide annual wage notices to their employees. Although the bill currently provides that it will go into effect 60 days after it is signed (which would mean that it would take effect after the February 1 deadline to provide the wage notices for 2015), the Governor's approval memo accompanying the bill specifically notes that an agreed-upon chapter amendment will "accelerate the effective date of the notification rule changes in section 1 of the bill to remove the notice requirement on employers for the 2015 calendar year."
We will provide an update once the expected chapter amendment is enacted in January.
Effective December 22, 2014, employers in New York must grant leave to employees who also serve as volunteer emergency responders during times when the Governor has declared a state of emergency. Employees eligible for such leave include volunteer firefighters and volunteer ambulance service personnel who have given their employer prior written documentation regarding their volunteer status or whose duties as a volunteer firefighter or member of a volunteer ambulance service are related to the declared emergency. In general, the leave may be unpaid, but the employee may choose to use any form of paid leave to which he or she would be entitled under the employer's policies. The full text of the new law can be found here.
Following an employee’s return from such leave, an employer may request a notarized statement from the head of the volunteer fire department or volunteer ambulance service, certifying the period of time that the employee responded to an emergency.
An employer may be eligible for a waiver of the leave requirements if it can show that granting an employee leave would cause an undue hardship on the employer’s business. An undue hardship is defined as an accommodation requiring significant expense or difficulty, including a significant interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system. Factors to be considered in determining whether granting a leave constitutes an undue hardship include, but are not limited to:
the identifiable cost, including the costs of loss of productivity and of retaining or hiring employees or transferring employees from one facility to another, in relation to the size and operating cost of the employer;
the number of individuals who will need the leave; and
for an employer with multiple facilities, the degree to which the geographic separateness or administrative fiscal relationship of the facilities will make granting the leave more difficult or expensive.
It is believed that the latest version of the bill was signed into law because, unlike prior versions of the bill, it creates an exception for employers who can show that complying with the leave requirements would impose an undue hardship.
Although there have not been many reported instances in which employers in New York have terminated employees for missing work to respond to emergencies, supporters of the new law claim that volunteer emergency responders are sometimes reluctant to request leave to respond to an emergency. This law is intended to allow volunteer emergency responders to request leave during a declared state of emergency without fear of repercussions at work.
In the latest example of dramatic changes to well-developed principles of federal labor law and policy, the National Labor Relations Board ("NLRB" or Board") issued its long-awaited decision in Pacific Lutheran University last week. For a description of the Board's decision and its potential impact on union organizing at colleges and universities, please click here for our article on the Bond Higher Education Law Report.
The minimum wage for employees in New York will increase from $8.00 per hour to $8.75 per hour effective December 31, 2014. The minimum wage for New York employees will increase again to $9.00 per hour effective December 31, 2015.
Employers in New York should also keep in mind that the minimum salary under state law for employees to qualify for the executive and administrative exemptions will increase from $600.00 per week to $656.25 per week effective December 31, 2014. The minimum salary under state law to qualify for the executive and administrative exemptions will increase again to $675.00 effective December 31, 2015.
New York employers who have already begun preparing to send out annual wage notices to their employees under the Wage Theft Prevention Act can safely stop their preparations. The bill eliminating the annual wage notice requirement was delivered to the Governor yesterday and it is expected that the Governor will sign it. The bill, as currently drafted, provides that the legislation will go into effect 60 days after it is signed into law, which would mean that it would take effect after the February 1 deadline to provide the wage notices for 2015. However, Bond's Government Relations lawyers brought this concern to the attention of the Governor's office in early December, while the Governor's office and the Legislature were discussing potential chapter amendments to the bill, and it is our understanding that one of the agreed-upon chapter amendments that will be enacted early in the next legislative session will eliminate the annual wage notice requirement immediately. So, we expect that employers will not have to issue the notices in 2015.
We will provide an update as soon as the Governor signs the bill, and another update once the expected chapter amendments are enacted in January. This is certainly great news for employers in New York, who will no longer have to engage in the costly and time-consuming process of issuing wage notices to all employees between January 1 and February 1 of each year.
Recent activity by the National Labor Relations Board has significantly changed the landscape of union organizing campaigns and representation elections. Attorneys from Bond, Schoeneck & King's Labor and Employment Department will conduct two free webinars this week to explain these recent developments and their impact on employers. Each webinar is scheduled for 45 minutes. Ray Pascucci will conduct a webinar on December 17 at 3:00 p.m. to review the Board's final rule on "quickie" union representation elections and provide some practical recommendations to prepare for the possibility of a fast-track union organizing campaign. Andy Bobrek will conduct a webinar on December 18 at 11:00 a.m. to review the Board's decision in Purple Communications, Inc., holding that employees have a presumptive right to use their employer's e-mail system during non-working time to communicate about union organizing and discuss their terms and conditions of employment.
