Wage and Hour

NYS DOL Issues Wage Theft Prevention Act Templates, Instructions & FAQs!

April 4, 2011

By John M. Bagyi

Eight days before the Wage Theft Prevention Act goes into effect, the New York State Department of Labor finally released the notification templates and related information which will assist New York employers in complying with the Act. The documents were posted on the Department’s website Friday.

The Department issued notification templates for the following groups of employees: (a) Hourly Rate Employees; (b) Multiple Hourly Rate Employees; (c) Employees Paid a Weekly Rate or a Salary for a Fixed Number of Hours (40 or Fewer in a Week); (d) Employees Paid a Salary for Varying Hours, Day Rate, Piece Rate, Flat Rate, or Other Non-Hourly Basis; (e) Prevailing Rate and Other Jobs; and (f) Exempt Employees. The templates are available here.

The Department also issued Guidelines for Written Notice of Rates of Pay and Regular Payday, as well as instructions related to the templates. While the Guidelines state that dual language templates are available in Chinese, Haitian-Creole, Korean, Polish, Russian, and Spanish, as of this writing, only the Chinese, Korean and Spanish templates are available.

Finally, the Department also issued a document titled, “Frequently Asked Questions About the Wage Theft Prevention Act,” which provides answers to many of the most common questions employers have about the Act.

The information issued by the Department contains few real surprises. Some points of interest:


  • Though the legislature authorized the Commissioner to expand the required contents of the Section 195 notices to contain "other information" she "deems material and necessary," the notice templates essentially track the requirements set forth in the statute.


  • Employers are NOT required to use the DOL-issued templates and can develop their own, as long as the employer-prepared notices contain all the required information. Notably, the Department expressly states that it "reserves the right to require use of DOL forms in the future, if employer notices do not meet the requirements."
  • While the Department states that the New Hire Notice may be "included in" letters and/or employment agreements provided to new hires, it states the notice itself must "be on its own form." This is a significant requirement as many employers had previously satisfied Section 195's requirements by including the necessary information in new hire letters or employment agreements and did not use a separate form.
  • Interestingly, the Department backed off its prior position that notices issued to exempt employees must specify the exemption that applies to the employee. The Department now states that employers "may state the specific exemption that applies," but are not required to.
  • Annual notices must be provided between January 1 and February 1 with the first notice required before February 1, 2012. The annual notice requirement CANNOT be satisfied by giving notice at some other point in the year (e.g., when annual increases are implemented). Many employers had hoped the Department might recognize that many employers implement annual rate changes in months other than January and allow employers to issue the annual notices when those rate changes occur, rather than in January of each year. Unfortunately, the Department is requiring all employers to issue annual notices in January.
  • Employers must issue annual notices even if there have been no changes.
  • If employees are paid at multiple hourly or piece rates, the notice should disclose the all the rates that may apply (either on the notice itself or on an attached sheet).
  • Notices may be given electronically but there must be a system for the employee to acknowledge receipt of the notice and print out a copy of the notice.
  • If an employee refuses to sign the acknowledgment, the Department advises that "the employer should still give the notice and note the worker's refusal on its copy of the notice."

Notice of Changes

  • Except for hospitality industry employers, a separate notice is not required when there is an increase in an employee's pay rate, if the increase is reflected on the corresponding wage statement.
  • For any reduction in pay rate, the employer must notify the employee in writing before the reduction is implemented.

Wage Statements

  • If a retroactive wage increase is implemented, the amount of the retroactive increase must be separately noted on the wage statement in the period in which it is paid.
  • Wage statements may be provided electronically, if employees can access and print their statements on a computer provided by the employer.
  • The Department will prepare a sample wage statement showing the types of entries which may be necessary, but has not said when it will do so.


  • Employees are protected from retaliation if they complain to their employer, the Department, or the Attorney General about a possible labor law violation.
  • If employees believe in good faith that "there is a problem in the workplace, their activities are protected," even if the employer has not actually violated the labor law.
  • Even threatening an employee can be considered retaliation. This makes it essential that employers educate supervisors about the Act, and the retaliation provisions in particular.

Remember - the Wage Theft Prevention Act is effective this Saturday, April 9.

The 10 Most Pressing Employment Law Issues in 2011 - and What To Do About Them

March 3, 2011

By John M. Bagyi

As challenging as 2010 was, 2011 promises to be even more challenging for employers trying to remain in compliance in an ever-changing legal and regulatory environment. While coming into full compliance may seem daunting, addressing the ten concerns discussed below will be a meaningful step in that direction.

1.  Meal Periods. New York State requires employers to provide employees who work shifts in excess of six hours a meal period of not less than 30 minutes. Penalties for noncompliance start at $1,000 per offense and increase with each offense. In addition, if an employer automatically deducts meal periods from working time and such deductions do not accurately reflect the meal periods taken, the employer may not be paying employees for all time worked – resulting in far greater legal exposure.

What To Do: Employers should develop and enforce a meal period policy, requiring employees to take their meal periods (which cannot be waived). Employers should also require employees to leave their work area and prohibit employees from performing any work during meal periods. If employees’ meal periods are frequently interrupted, they should be paid for the entire meal period. Employers should also maintain accurate records demonstrating that they are complying with meal period obligations. Employers who automatically deduct for meal periods should have a policy notifying employees of this practice, a mechanism for employees to report when they have worked during a meal period, and should require employees and their supervisors to certify the accuracy of time records. Employers should also train supervisors on the legal obligations associated with meal periods.

2.  Exempt Status. With Fair Labor Standards Act litigation outpacing discrimination suits, and New York’s recently enacted Wage Theft Prevention Act taking effect in April 2011, overtime compliance is essential.

What To Do: Before classifying a position as exempt, employers must insure the duties test, salary basis test and salary level test are satisfied. Because many employers give little thought to exempt classifications, employers should review all positions currently classified as exempt and insure these tests are satisfied. If an employer discovers it has misclassified a position as exempt, legal counsel should be sought.

3.  Other Wage and Hour Concerns. Employers must also be mindful of limits on deductions from wages (e.g., overpayment of wages, debts to the employer), the need to pay nonexempt employees for all hours worked, including those worked remotely (e.g., via Blackberry or other mobile device), and the proper way to calculate regular rate of pay for overtime purposes.

What To Do: Employers should review their wage and hour practices and work with legal counsel to develop appropriate guidance on each of these subjects.

4.  Misclassification of Workers. The United States Department of Labor has identified combating employee misclassification as a priority in 2011 and with a recent study finding 1 in 10 private sector New York employers having not properly classified workers, the potential exposure is clear. Misclassification of an employee as an independent contractor carries with it a broad range of liability, including: unemployment insurance, workers’ compensation, social security, tax withholding, temporary disability, and minimum wage and overtime.

What To Do: Employers should review their relationship with any worker identified as an independent contractor. In doing so, particular attention should be paid to whether the individual is in the business of providing these services, the duties performed, the control exercised over the work performed, the method of payment, and how payments are reported. These relationships should be memorialized in a written agreement (while understanding that labeling an individual an independent contractor does not end the analysis) that has been reviewed by counsel and accurately reflects the relationship between the parties.

5.  Reasonable Accommodations/Leaves. With the recently adopted Americans with Disabilities Act Amendment Act (ADAAA) and employers still working toward complying with the last round of regulatory changes to the Family Medical Leave Act (FMLA), reasonable accommodations and leaves will remain a focal point in 2011.

What To Do: Covered employers should review their FMLA policy and forms and, if necessary, update them. Employers should also adopt a policy detailing the reasonable accommodation obligation and the procedure for requesting accommodation, and insure supervisors can identify accommodation requests. Finally, employers must be aware that an employee requiring leave for a medical condition may not be limited to the 12-week FMLA entitlement given the availability of leave as a reasonable accommodation under the ADA and New York Human Rights Law.

6.  Caregiver Discrimination. As women now outnumber men in the U.S. workforce and mothers of young children are twice as likely to be employed as their counterparts 30 years ago, caregiver discrimination has gained greater attention and, in 2010, was described as an issue that would be “front and center” for the EEOC.

What To Do: Employers should educate supervisory personnel on what constitutes caregiver discrimination and insure those involved in the hiring process know what can and cannot be asked about caregiving responsibilities. In addition, parental/caregiving leave policies should be reviewed to ensure they do not discriminate on the basis of gender.

7.  Harassment. While harassment has been a long standing concern for employers, recent statistics demonstrate that workplace harassment is evolving - with more than 50% of harassment claims based on a protected status other than gender (e.g., disability, race, national origin) and sexual harassment charges filed by men increasing significantly.

What To Do: Employers should review their harassment policy to ensure it covers to all forms of harassment, describes/provides examples of what constitutes harassment, references conduct outside the work environment (including on social media), provides multiple avenues of complaint (directing victim to someone other than the harasser), presents an overview of the complaint procedure, and insures that the parties will be notified of the outcome of investigations. Employers should also train all those identified as avenues of complaint, as well as supervisors and managers, and should consider training all personnel.

8.  Retaliation. With EEOC charges alleging retaliation increasing 45% from 2006 to 2009 and retaliation now tied with race as the most common form of discrimination alleged, concerns related to retaliation are self-evident.

What To Do: Employers should develop or review their policy on retaliation and insure it accurately reflects recent legal developments and provides a complaint mechanism. Employers should educate supervisors on what constitutes retaliation and, when a complaint of harassment or discrimination or other violation of law is received, employers should address retaliation concerns with the source of the complaint, the person about whom the complaint was made, and any witnesses. Employers should also show sensitivity to the timing of adverse actions in relation to employee complaints and involve human resources and/or legal counsel in decisions impacting employees who recently engaged in protected activity.

9.  Employee Relations. While the Employee Free Choice Act (“EFCA”) appears to be dead, the underlying goal of EFCA – to increase unionization of the private sector workforce - will be advanced through National Labor Relations Board decisions and regulatory action. These potential changes -- commonly referred to as “EFCA 2.0” -- include narrowing the National Labor Relation Act’s definition of supervisor, expanding the protection of employee use of employer provided e-mail to solicit support for unionization, accelerating the speed of union elections, expand union access to employer property, and banning “captive audience” employee meetings.

What To Do: Given the likelihood at least some of these changes will be implemented, employers should pro-actively take steps to assess and, if necessary, improve employee relations. Employers should confirm that their supervisors satisfy the NLRA’s definition of supervisor (and are therefore excluded from NLRA protection and cannot unionize), educate supervisory personnel on the importance of open communication and positive employee relations and give supervisors the tools to succeed in this area. Employers should also take steps to address employee concerns that might otherwise lead to widespread employee dissatisfaction.

10.  Technology-Related Issues. With technology evolving at an unprecedented pace and social media use expanding rapidly, technology-related concerns are vast and problematic. While not every technology-related concern can be anticipated, let alone avoided, there are common sense steps employers can take to limit potential exposure.

What To Do: Employers should adopt, and distribute a policy concerning the use of the employer’s technological resources, and obtain employee consent to accessing, intercepting and monitoring of their use thereof. Employers should also adopting a policy addressing social media use, both at and outside work, and ensure that social media concerns are addressed in other non-technology policies (e.g., workplace harassment, references). Finally, employers should determine if and how they will use social media in the hiring process and put policies and procedures in place to ensure hiring managers do not inadvertently gain access to applicants’ protected status (e.g. age, national origin) in the process.

A version of this post was previously published in the Saratoga Business Journal.

New York Labor Law Section 195 Requirements, Effective April 9, 2011

February 24, 2011

By Subhash Viswanathan

We have posted previously on the amendments to New York Labor Law Section 195, the so-called Wage Theft Prevention Act, which creates certain employer obligations to notify employees of their wage rates and other information. As the April 9, effective date approaches, employers should be preparing to provide the following notifications and information.

Notification at Time of Hire

Whenever a new employee is hired, Section 195 now requires employers to provide the following information to each new hire before the new hire begins work:

  • Rate or rates of pay
  • Basis of pay (e.g. hourly, shift, day, week, salary, piece, commission, or other)
  • Allowances, if any, claimed against the minimum wage (e.g., tips, meals, lodging)
  • Identification of the regular pay day.
  • Name of employer (including any doing business as name)
  • Address and phone of employer

Acknowledgement of Receipt by Employee

In addition, the statute requires employers to obtain an employee acknowledgement of receipt of the information. That acknowledgement must be in English and the employee’s primary language. The acknowledgement 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. In order to comply with this requirement, the employer will have to ask each employee what his/her primary language is before the notice is provided. Due to non-discrimination concerns, employers should not obtain this information before an offer of employment is made.

Commissioner’s Templates

The statute requires the Commissioner of Labor to prepare dual language templates for the notice and acknowledgement. The statute does not state that employers must use them, but if they do, they will not have any liability for mistakes made in the primary language. As of this date, the templates are not available.

Electronic Notices

According to a 2010 New York Department of Labor opinion letter on the pre-amendment Section 195, notice and acknowledgement may be electronic if:

  1. the employee can access a computer and print a copy of the notice at any time and at no cost;
  2. affirmative steps are required by the employee to acknowledge receipt of the notice (i.e., an employer cannot rely on passive receipt of an e-mail); and
  3. the acknowledgement includes statements ensuring that the employee has received and reviewed the notice and that the employee is aware that his/her actions have legally significant consequences.

Annual Notices

The statute also requires employers to provide notices to all employees on or before February 1 of each subsequent year of employment. The annual notice content and acknowledgement requirements are identical to the requirements for a new hire notice.

Wage Statement Requirements

The amendments to Section 195 also mandate the inclusion of certain information in all employee wage statements. Nothing in the statute prohibits an electronic statement. There are no acknowledgement or primary language requirements.

For all employees the following information is required with every payment of wages

  • Name of employee
  • Name of employer
  • Employer’s address and phone
  • Rate or rates of pay
  • Basis of rate of pay (hourly, shift, day, week, salary, piece, commission or other)
  • Gross wages
  • Deductions
  • Allowances, if any are claimed as part of the minimum wage (tips, meals, lodging)
  • Net wages

For non-exempt employees, the following additional information must be provided.

  • Regular hourly rate or rates
  • Overtime rate or rates
  • Number of regular hours worked
  • Number of overtime hours worked

Notification of Changes

Finally, whenever any of the information provided in either the new hire notice or the annual notice is changed, the employer must notify the employee in writing at least 7 calendar days before the change. This notification is not necessary if the changed information is reflected in the employee wage statement described above. Nothing in the statute prohibits electronic notification of changes, and there is no primary language requirement.

Effective Date of Wage Theft Prevention Act is April 9

February 7, 2011

By Subhash Viswanathan

On December 15, 2010, we reported that former New York Governor David Patterson signed the Wage Theft Prevention Act (the “Act”) into law on December 13, 2010. Because the Act states that it shall take effect 120 days after it is signed into law, we reported the effective date as Tuesday, April 12, 2011. However, it appears that Governor Patterson signed the Act twice – first on December 10, 2010 and then again during a public ceremony on December 13. Because the Act was first signed into law on December 10, 2010, the effective date is actually Saturday, April 9, 2011. As a result, employers must implement the Act’s new notice, employee acknowledgment and record retention requirements by April 9, 2011. Because implementation may require significant changes in current policies and procedures, employers should begin a review of payroll and wage notification practices now.

Department of Labor Implements Hospitality Industry Wage Order

January 19, 2011

By Subhash Viswanathan

The New York State Department of Labor’s Hospitality Industry Wage Order, which is intended to combine and replace the Wage Orders formerly applicable to the Restaurant Industry and Hotel Industry, became effective on January 1, 2011. The Department of Labor has issued a notice to employers that it will exercise discretion with regard to enforcement until February 28, 2011, in order to allow employers sufficient time to come into compliance, but expects that employees covered by the Wage Order will be paid any additional wages owed to them by March 1, 2011 or the next regularly scheduled pay day after March 1, 2011. The additional wages must be computed retroactively to January 1, 2011. Employers covered by the Wage Order are required to post a notice to employees regarding the implementation period and their right to retroactive payment of wages.

The Wage Order makes several changes to the rules governing the payment of wages to employees in restaurants and hotels. Some of the significant changes are described below.

Tip Credit

Under the former Restaurant Industry Wage Order, employers were required to pay food service workers at least $4.65 per hour, as long as the tips received by those workers added to their hourly wages equaled or exceeded the minimum wage of $7.25 per hour. Under the new Hospitality Industry Wage Order, food service workers must receive an hourly wage of at least $5.00 per hour, as long as the amount of their tips added to their hourly wages is sufficient to equal or exceed the minimum wage. Service employees who do not work in resort hotels must be paid at least $5.65 per hour (up from a minimum of $4.90), as long as the amount of their tips added to their hourly wages is sufficient to equal or exceed the minimum wage. In resort hotels, service employees may be paid a minimum of $4.90 per hour (up from $4.35) as long as the weekly average of their tips is at least $4.10 per hour.

In order to pay the reduced minimum wage to a tipped employee, employers must notify the employee of any tip credit that will be taken as part of its new hire notice. If any changes are made to the employee’s hourly wage, a new notice must be provided containing the same information.

If a tipped employee works in a non-tipped occupation for two hours or more in a day, or for more than 20% of his or her shift during a day, the employer is not entitled to take any tip credit for any hours worked during the day, and must pay at least the full minimum wage of $7.25 per hour for all hours worked.

Tip Pooling and Tip Sharing

Employers covered by the Wage Order may require directly tipped food service workers to share their tips with other food service workers who participated in providing the service to customers and may set the percentage to be given to each occupation. Employers may also require food service workers to participate in a tip pooling arrangement. Only certain types of employees are eligible to receive shared tips or distributions from a tip pool. Those occupations include: (1) wait staff; (2) counter personnel who serve food and beverages; (3) bus persons; (4) bartenders; (5) service bartenders; (6) barbacks; (7) food runners; (8) captains who provide direct food service to customers; and (9) hosts who greet and seat guests. Employers are required to keep detailed records relating to tip sharing or tip pooling arrangements for at least six years.

Call-In Pay

The Wage Order provides that an employee who reports for duty by request or permission of the employer must be paid at his or her “applicable wage rate” for at least three hours if called in for one shift, six hours if called in for two shifts, or eight hours if called in for three shifts. The phrase “applicable wage rate” is defined as the employee’s regular or overtime rate of pay, whichever is applicable, minus any customary and usual tip credit. This is a change from the former Wage Orders, which required payment at the “applicable minimum wage rate.”

Spread of Hours

Under the Wage Order, any employee whose spread of hours from the beginning to the end of the work day exceeds ten is entitled to an additional hour of pay at the basic minimum hourly wage rate, regardless of the employee’s regular rate of pay. Therefore, employers are no longer permitted to a take a credit toward this spread of hours payment for wages paid to an employee in excess of the minimum wage for the other hours worked in the day.


The uniform maintenance allowance amounts remain the same under the Wage Order, but two exceptions have been created. First, under the “wash and wear” exception, an employer is not required to provide any uniform maintenance allowance if the uniforms: (1) are made of “wash and wear” materials; (2) can be washed and dried with other garments; (3) do not require ironing, dry cleaning, daily washing, commercial laundering, or other special treatment; and (4) are furnished in sufficient number consistent with the average number of days per week worked by the employee. Second, an employer is not required to provide any uniform maintenance allowance if it informs the employee in writing that it will launder the uniforms free of charge and the employee chooses not to use the employer’s laundry service.

Meal Credit

The amount of credit that an employer in the hospitality industry may take for providing an employee with a meal has been increased from $2.10 to $2.50 per meal.

Governor Patterson Signs Wage Theft Prevention Act

December 15, 2010

By Subhash Viswanathan

On Monday, December 13, 2010, Governor Patterson signed the Wage Theft Prevention Act, which broadens greatly the Department of Labor’s enforcement powers, imposes new and expanded notification requirements on employers, and increases significantly employers’ potential liability for violations of the Labor Law. A summary of the major changes, which take effect on April 12, 2011, is provided below.

Notice Requirements

The Act makes significant changes to section 195 of the Labor Law by requiring employers to provide even more information to employees, both upon hire and on or before February 1 of each following year. Required information now includes, among other things: pay rates, basis of pay rate, how the employee will be paid (e.g., hour, shift, week, salary, etc.), any allowances claimed as part of the minimum wage, the regular pay day, and “such other information as the commissioner deems material and necessary.” Employers must provide this documentation in both English and in the employee’s primary language and maintain accurate records for six years. The Commissioner of Labor will establish dual-language templates for purposes of complying with these changes.

Failure to provide notice as required by section 195 within ten business days of the employee’s first day of employment allows either the Commissioner or the employee to bring an action to recover damages of $50 for each work week that the violation occurred, plus costs and reasonable attorney’s fees. Damages recoverable for prevailing employees are capped at $2,500. No such maximum applies for actions brought by the Commissioner.

Wage Statements

Section 195 is further amended to require employers to provide employees with a detailed wage statement with every payment of wages. Required information includes, among other things: the dates of work covered by that payment, the rate and basis of pay (e.g., whether by hour, shift, week, salary, etc.), and any allowances claimed as part of the minimum wage. For non-exempt employees, employers must also provide the employee’s regular hourly rate, overtime rate, the number of regular hours worked, and the number of overtime hours worked.

The Act allows both employees and the Commissioner to bring legal action for failure to provide such information. Damages include $100 per week for each week the violation occurs, not to exceed $2,500 for employee-initiated legal action, plus costs and attorney’s fees.

Liquidated Damages

Another significant change to the Labor Law is the increase in available liquidated damages. Previously, an employee who prevailed in a court action alleging a failure to pay wages received the total amount of the underpayment, costs, attorney’s fees, and, in some instances, liquidated damages equal to 25% of the underpayment. As amended, section 198.1-a now permits a prevailing employee to recover payment of all wages due, costs, attorney’s fees, prejudgment interest, and (unless the employer proves a good faith basis to believe the underpayment was lawful) liquidated damages equal to 100% of the total wages due.

Anti-Retaliation Protection

Several key changes to the Labor Law’s anti-retaliation protections have been made, such as requiring “any person” found to have engaged in unlawful retaliation to pay liquidated damages of up to $10,000, along with costs and attorney’s fees. In addition, retaliation is now listed as a class B misdemeanor.

While the Act does not take effect until next April, employers should begin reviewing their payroll practices to determine what they will have to change to comply with the new notice and wage statement requirements.


New York\'s Construction Industry Fair Play Act Takes Effect

October 28, 2010

By Subhash Viswanathan

Last month we posted on several bills signed into law by Governor Paterson in late August, one of those is the Construction Industry Fair Play Act, which applies to construction industry contractors in New York and is designed to deal with the problem of worker misclassification in that industry. Among other things, the Act creates a presumption that workers in the industry are employees, not independent contractors, unless three statutory criteria are met. The Act, which went into effect Tuesday, also provides for fines and criminal penalties for willful misclassification of employees. The New York State Department of Labor has issued a fact sheet explaining the statute. The Agency has also issued a poster which construction industry employers must display in a “prominent and accessible place on the job site.”

Jury, Not Court, Determines Whether An Entity Is A Joint Employer Under The FLSA

September 15, 2010

Almost seven years ago, in Zheng v. Liberty Apparel Co., the Second Circuit Court of Appeals created a six factor test for assessing when businesses are liable as "joint employers" under the Fair Labor Standards Act (FLSA) for violations committed by their subcontractors. The Second Circuit held that, depending on the case, the following factors should be reviewed in determining joint employer status: (1) whether the workers work exclusively or predominantly for the purported joint employer; (2) the permanence or duration of the working relationship; (3) whether the purported employer’s premises and equipment are used by the workers; (4) the extent of control the putative joint employer exercises over the workers; (5) whether the outsourced workers can be considered an integral part of the business; and (6) whether the workers have a business organization that could shift as a unit from one putative joint employer to another. The Court also found that industry custom and historical practice could be considered to differentiate between legitimate subcontracting relationships and subterfuges intended to evade the FLSA.

The Second Circuit sent the case back to the District Court and, eventually, the case went to trial before a jury. At trial, the primary issue was whether the Liberty Defendants were plaintiffs' "joint employer" for purposes of the FLSA and analogous state law claims. The jury returned a verdict in favor of plaintiffs, and, following resolution of various post-trial motions, the District Court entered judgment accordingly. Liberty appealed that judgment, contending that the District Court, rather than the jury, should have determined whether it was the plaintiffs' joint employer. Recently, the Second Circuit affirmed, holding that the trial judge did not err in allowing a jury to decide the mixed question of law and fact as to whether Liberty was the plaintiffs' joint employer. Although Liberty argued that the lower court should have used a special verdict form allowing the judge to apply the six-factor test to the jury's factual findings, the Second Circuit said “such a rule would distort the jury's proper role” of applying law to fact.

The Second Circuit’s recent decision serves as a healthy reminder to employers who subcontract or outsource a portion of their business that they should carefully review such relationships to minimize the risk of potential FLSA liability.

A version of this post appeared previously on the Wage and Hour Defense Institute blog.

Governor Patterson Signs Several New Pieces of Legislation Affecting New York Employers

September 9, 2010

By Subhash Viswanathan

The end of August was a busy time for Governor Paterson who acted on 90 pieces of pending legislation. Several of those laws will have an impact on employers across the State. Below is a brief summary of the new laws.

Domestic Workers Bill of Rights

By signing the “Domestic Workers Bill of Rights” Governor Paterson made New York the first state to have such a law. When he signed the legislation, Governor Paterson remarked that: “Today we correct an historic injustice by granting those who care for the elderly, raise our children and clean our homes the same essential rights to which all workers should be entitled.” The law, which takes effect November 29, 2010, defines a protected domestic worker as a “person employed in a home or residence for the purpose of caring for a child, serving as a companion for a sick, convalescing or elderly person, housekeeping, or for any other domestic service purpose.” Excluded from the definition are persons who: work on a casual basis; provide companionship services and are employed by someone other than the family or household for which the services are provided; and relatives by blood, marriage or adoption of the employer or of the person for whom the worker is providing services under a program funded by a federal, state or local government. Among other things, the law provides the following protections and benefits for covered domestic workers:

1)  the right to overtime pay at time and a half after 40 hours of work in a week, or 44 hours for workers who reside in the employer’s home;

2)  one day of rest every seven days, or overtime pay if it is waived;

3)  three paid days of rest annually after one year of work;

4)  the removal of the domestic workers exemption from the Human Rights Law, and the creation of a special cause of action for domestic workers who suffer sexual or racial harassment; and

5)  the extension of statutory disability benefits to domestic workers, to the same degree as other workers.

Bereavement And Funeral Leave For Same-Sex Partners

Another bill signed by the Governor requires that employers who provide leave for the death of an employee's spouse or the child, parent or other relative of the spouse, must provide the same leave to an employee for the death of the employee's same-sex committed partner or the child, parent or other relative of the same-sex committed partner. The law, which is effective October 29, 2010, defines same-sex committed partners as “those who are financially and emotionally interdependent in a manner commonly presumed of spouses.”

Construction Industry Fair Play Act

Finally, in an effort to respond to the issue of employee misclassification in the construction industry, Governor Paterson signed the Construction Industry Fair Play Act, which takes effect on October 29, 2010. The Act creates a presumption that any person performing services for a construction contractor is an employee, not an independent contractor. The presumption can only be rebutted if the person satisfies the requirements to be classified as a separate business entity, as defined by the Act, or the person meets the following criteria which establish independent contractor status:

1)  the individual is free from control and direction in performing the job, both under his or her contract and in fact;

2)  the service must be performed outside the usual course of business for which the service is performed; and

3)  the individual is customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue.

In addition, and for the first time in New York State history, the Act imposes monetary and criminal penalties on construction industry employers that willfully misclassify employees.

Governor Paterson did veto several piece of legislation that would have affected employers across the state, including one which would have mandated that employers excuse the absence/lateness of an employee if such absence/lateness was due to the fact that the employee was responding to an emergency as either a volunteer ambulance worker or volunteer firefighter.

There are several pieces of employment-related legislation the Governor has not yet acted on. We will follow and report on those if and when the Governor signs them.

New York State Department of Labor Adds Counsel Opinion Letters to Website

August 18, 2010

By Subhash Viswanathan

The New York State Department of Labor recently added to its website opinion letters written by its Counsel’s Office. The Counsel's Office provides legal advice and counsel to the Commissioner of Labor and to programs within the Department. The opinion letters are primarily responses to requests for advice submitted by employers. All the letters are text-searchable.  They cover three general topics: wage and hour law, public works projects and the State Worker Adjustment and Retraining Notification Act (“WARN”). The wage and hour law letters span a wide variety of topics from blood donation leave and accommodations for nursing mothers to employment classifications, independent contractor issues, meal and rest periods, overtime, and wage deductions under Labor Law Section 193. The public works projects letters deal with state requirements for payment of the prevailing wage (the local union wage) by private employers performing work on public works projects. Most of those letters address whether the prevailing wage law applies to particular types of work. There are only a few opinion letters related to WARN, which is not surprising because the statute and its implementing regulations are still relatively new. Interestingly, none of the letters made publicly available predate 2007, the first year of a newly elected Democratic administration.

Break Time For Nursing Mothers Under the FLSA - Balancing Obligations Under New York Law With New Federal Requirements

July 23, 2010

By John M. Bagyi

Yesterday, the US Department of Labor issued a fact sheet  that provides general information on the break time requirement for nursing mothers, part of the Patient Protection and Affordable Care Act which took effect March 23, 2010. While these amendments to the Fair Labor Standards Act (FLSA) represent a significant change for employers in many states, since 2007, New York employers have been required to provide reasonable unpaid break time, or permit employees to use paid break time or meal time, to express breast milk. See our earlier posts on New York's requirement.

Thus, for New York employers, the most important observation contained in the US DOL's fact sheet is that the FLSA requirement of break time for nursing mothers to express breast milk does not preempt State laws that provide greater protections to employees. New York's protection of nursing mothers provides employees with a number of protections that exceed those provided under the new federal law. For example, New York law protects expression of breast milk up to three years following the birth of the child (federal law is limited to one year) and applies to all employers (federal law does not apply to employers with fewer than 50 employees).

Given that New York's protection of nursing mothers provides greater protection than the recent FLSA amendments, employers complying with existing New York law will be in compliance with the new federal law as well.


Second Circuit Finds Pharmaceutical Sales Reps Not Exempt Under FLSA

July 16, 2010

By Katherine R. Schafer

On July 6, 2010, the Second Circuit Court of Appeals held that pharmaceutical sales representatives employed by Novartis Pharmaceuticals Corp. (“Novartis”) are not exempt from the overtime pay requirements of the Fair Labor Standards Act (“FLSA”) as either “outside sales” or “administrative” employees. In so doing, the Court determined that the Secretary of Labor’s interpretations of the regulations promulgated under the FLSA defining “outside sales” and “administrative” employees, as set forth in the Secretary’s amicus brief , were entitled to “controlling” deference.

The Second Circuit rejected Novartis’ argument that its sales reps “made sales” within the meaning of the “outside sales” regulations because the reps only promoted a drug to a physician. They could not lawfully take an order for its purchase or obtain a binding commitment from the physician to prescribe the drug to a patient. While the sales reps provided physicians with free samples, Novartis sold its drugs to wholesalers, which then sold them to pharmacies, and the pharmacies ultimately sold the drugs to the patients who had prescriptions for them. Accordingly, since the sales reps did not “make sales,” they were not “outside salespeople” within the meaning of the FLSA and the regulations.

The Court also agreed with the Secretary of Labor that the sales reps were not “administrative” employees under the FLSA because the marketing skills “gained and/or honed” through Novartis training sessions did not demonstrate that the sales reps were “sufficiently allowed to exercise either discretion or independent judgment in the performance of their primary duties.”

Writing for the Court, Judge Amalya L. Kearse acknowledged that a number of federal district courts have held that pharmaceutical sales reps are exempt under the outside sales and/or administrative exemptions, but responded that “[t]hose cases are, of course, not binding on us, and their reasoning does not persuade us that the Secretary’s interpretations of the regulations should be disregarded.” Judge Kearse added, “[t]o the extent that the pharmaceuticals industry wishes to have the concept of ‘sales’ expanded to include the promotional activities at issue here, it should direct its efforts to Congress, not the courts.”