New York City Council Proposes a Premium for Essential Workers

April 24, 2020

On April 22, 2020, the New York City Council (the “Council”) introduced legislation that would require large essential businesses to pay premiums, or “hazard pay,” to certain non-salaried essential employees. The bill requires essential businesses with 100 or more employees to pay hourly workers an additional $30 for each shift under four hours, $60 for any shift of four to eight hours, and $75 for any shift over eight hours. The obligation would continue until the state of emergency is lifted. The Council will have a hearing to discuss the bill next week and it could become law as early as May.

The bill is part of a package of bills introduced by the Council called the “NYC Essential Workers’ Bill of Rights.” The other bills under the package call for just cause rights for essential workers, paid sick leave for gig workers, and resolution of misclassification of independent contractors.

Qualifying Large Essential Businesses

Under the bill, the term “essential business” means any person or entity identified by the New York Empire State Development, in accordance with Executive Order 202.6. An updated list of essential businesses is available on the Empire State Development’s website here.

Only large essential businesses qualify for making premium payments under the bill. A “large essential business” is any essential business with 100 or more employees. In determining the number of employees performing work for an essential business during any given week, all full-time, part-time, and temporary employees are counted. For essential businesses with a  workforce that fluctuates per week, the bill provides an alternative method of determining the number of employees. Chain businesses—businesses that are a part of a group of establishments that engage in the same business or operate pursuant to franchise agreements with the same franchisor—are counted as one employer for purposes of counting employees. Notably, businesses in the real estate sector (e.g., those primarily engaged in renting, leasing, managing, selling, or buying real estate) are exempt from the bill.  

Qualifying Essential Employees

To qualify for a premium, essential employees must work for a large essential business and cannot be: 

• Salaried;
• Covered by a collective bargaining agreement if such agreement expressly waives the provisions of the bill and provides comparable or superior benefits for essential employees; or
• Covered by a program created pursuant to an emergency order issued by the governor that provides comparable or superior benefits for essential employees.

Other Key Requirements

Premiums must be paid at the time an employee is paid wages for work performed during that workweek. The premium must also be separately noted on a wage stub, or other form of written documentation, and provided to the essential employee for that pay period.

Large essential businesses must post notices informing employees of their rights under the bill within five days after its effective date. Large essential businesses must also retain records documenting their compliance with the bill’s requirements for a period of three years.

Penalties for Non-Compliance

The bill makes it against the law for employers to retaliate against any essential employee for exercising or attempting to exercise any right under the bill. The bill also creates a private cause of action for any person or organization alleging a violation of the bill. The bill includes administrative and judicial remedies, including compensatory damages, injunctive relief, civil penalties, and reasonable attorney’s fees.

Takeaway for Employers

Employers that qualify as “large essential businesses” should monitor the status of the bill for whether it passes into law. Employers should also make arrangements to post the required notices under the bill and prepare to retain records documenting their compliance with the bill.

It is unclear whether employers may factor in any temporary incentive pay—or other similar employer initiative already in place—towards the premium. However, given that the premium must be separately noted on employee wage stubs, it is advisable that the full premium amount be noted separately from any employer initiative providing temporary incentive pay.

These materials were prepared by Putney, Twombly, Hall & Hirson LLP prior to their combination with Bond, Schoeneck & King for informational purposes only and are not intended as legal advice or advertisement of legal services. Transmission of the information is not confidential and is not intended to create an attorney-client relationship or an attorney-client privileged communication. You should not act upon any of the information contained in these materials without seeking the advice of your own professional legal counsel.