iAlthough 2023 perhaps did not see the passage of any laws quite as impactful as 2022—which, as employers will recall, included New York State enacting its own pay transparency law (see here) and novel New York City Council legislation governing the use of artificial intelligence (which we discussed here)—2023 nevertheless was a busy year for New York State and New York City lawmakers. We count no fewer than twelve (12) notable pieces of legislation that were passed in 2023 that warrant employers’ attention. And it has already become clear that 2024 is shaping up to be a similarly significant year for legislation in New York, which will likely include the passage, in some form, of constraints on the use of non-competes by New York employers. Below, we summarize these laws and highlight some legislation on the horizon.
New York State Enacts Changes to Employment-Related Confidentiality Provisions
Signed into law and effective immediately on November 17, 2023, New York passed S4516, an amendment to Section 5-336 of the New York General Obligations Law, one of the original #MeToo statutes. While the original law required an employee to wait a full 21 days before choosing to sign a separate confidentiality agreement recognizing the employee’s preference to keep the underlying facts and circumstances of a discrimination claim confidential, now, employees can take up to 21 days to sign, but may sign earlier if they so choose (although the 7-day revocation period remains intact). The amended law now also applies to the settlement of harassment and retaliation claims, instead of just discrimination claims.
The amendment also sets forth new parameters that govern the release’s enforceability when its factual foundation involves discrimination, harassment, or retaliation, including barring employers from requiring employees to: (i) pay liquidated damages or forfeit some or all of the settlement/separation consideration for violating a non-disclosure or non-disparagement clause; or (ii) complete an affirmative disclaimer that they were not subject to discriminatory, harassing or retaliatory conduct.
New York State Expanded Freelance Worker Protections
Governor Hochul signed the “Freelance Isn’t Free Act” on November 22, 2023, establishing several protections for independent contractors, many of which mirror those included in New York City’s Freelance Isn’t Free Act (discussed here and which took effect May 17, 2017). New York State’s law is similar to the City’s law in many respects, including the requirement that businesses provide freelance workers with a written contract for work greater than $800, that the business provide a deadline for payment (if not specified in the written contract), and with respect to the law’s anti-retaliation provisions.
The New York State law also provides an avenue by which freelance workers may file complaints with the New York State Department of Labor (“NYSDOL”), which will investigate and, if appropriate, award the freelance worker relief and potentially levy civil and criminal penalties against the hiring party. Freelance workers who prove that a hiring party violates the law are “entitled to an award of double damages, injunctive relief, and other such remedies as may be appropriate” as well as “statutory damages equal to the value of the underlying contract for each violation.” Importantly, the new law also provides freelancers with the option to file a lawsuit directly in court.
The State law takes effect on May 20, 2024, and does not retroactively apply to contracts entered into before that date.
The State will also publish model contracts that the parties may use to satisfy the requirements under the law. Employers engaging contractors in the State are well-advised to update their forms once those model contracts are released and certainly ahead of the compliance deadline.
New York State Passes Employee Social Media Protections
On September 14, 2023, Governor Hochul signed into law Assembly Bill (A) 836 and Senate Bill (S) 02518A, which adds new section 201-i to the New York Labor Law and which prohibits employers from requesting, requiring, or coercing employees or job applicants into disclosing any social media account information, including usernames and passwords. The law is part of an ongoing effort to safeguard employee privacy interests.
The law only applies to “personal accounts,” or accounts used “exclusively for personal purposes,” with an explicit carveout for “accounts known to an employer to be used for business purposes.” Crucially, the law also creates certain exceptions, including, among other exceptions, allowing employers (i) to access devices (but not personal accounts that can accessed through that device) when the employer pays for the communications device; (ii) to be “voluntarily added” to an employee’s account, akin to a friend or follower, so long as the relationship is truly voluntary and (iii) to view any publicly available information or information the employee voluntarily shares. The law does not take effect until March 12, 2024, so employers should take this time as an opportunity to review policies and ensure they are compliant with the restrictions set forth in the law.
Updates to New York State Unemployment Insurance Notice Requirements
On September 14, 2023, Governor Hochul signed into law Assembly Bill (A) 00398A and Senate Bill (S) 04878A, expanding on existing obligations that employers provide a Record of Employment form to any employee who quits, is subject to layoff, or is otherwise discharged. The new law took effect on November 13, 2023. Now, New York employers are required to provide notice to an employee whenever there is a “reduction in hours, temporary suspension, [or] any other interruption in continued employment that results in total or partial unemployment.”
According to the bill, this notice must be given “in writing on a form furnished or approved by the [NYSDOL]” and shall include: (i) the employer’s name and registration number; (ii) the address of the employer to which a request for remuneration and employment information can be directed; and (iii) such other information as required by the Commissioner of the NYSDOL. Employers can find this form on the NYSDOL website located here.
Increased Salary Thresholds for Certain New York Labor Law Exemptions
Governor Hochul recently signed S.B.5572 into law, which, effective March 13, 2024, will raise the salary threshold governing certain exemptions under Article 6 of the New York Labor Law (“NYLL”) from $900 per week ($46,800 per year) to $1,300 per week ($67,600 per year) — the first increase seen since 2007. Article 6 creates wage protections for employees through various employer obligations, including paying clerical or other workers “not less frequently than semi-monthly,” getting an employee’s advanced, written consent before paying wages via direct deposit, and holding the employer guilty of a misdemeanor in the event that the employer fails to provide benefits or wage supplements within 30 days of being due. The new law amends its definition of “clerical and other workers” to exclude any bona fide executive, administrative, or professional employee who earns more than $1,300 per week. With NYLL Section 191 requiring “manual” workers be paid at least weekly but exempting “clerical” workers from that right, the new law effectively increases the minimum salary for an employer to benefit from the clerical workers exemption under Section 191 to the $1,300 per week benchmark.
Notably, these increased salary thresholds bear no relation to the thresholds determining exempt status with respect to New York’s minimum wage and overtime exceptions. Current proposed regulations for the executive and administrative overtime exemptions will likely increase these salary thresholds as well, but to different amounts – as of January 1, 2024, those thresholds will likely be (1) $1,200/week ($62,400/year) in New York City and Nassau, Suffolk, and Westchester Counties; and (2) $1,124.20/week ($58,450.40/year) elsewhere in the State). Employers will need to pay careful attention to these varying thresholds, as certain employees may be exempt for some, but not all, of the Labor Law provisions.
Revised New York WARN Act Regulations
At the end of June 2023, the NYSDOL issued amended regulations to New York State’s Worker Adjustment and Retraining Notification (“WARN”) Act which went into effect immediately. NYSDOL’s amended regulations reflect, in part, updates made to the NY WARN Act in 2021, but also respond to some of the unique issues the COVID-19 pandemic presented in the context of layoffs and plant closures, including how remote workers are treated and counted for the purposes of NY WARN Act coverage. Notable updates to the regulations include the following:
- Remote Workers Are Counted in Determining Coverage. The NY WARN Act applies to businesses with fifty (50) or more employees within New York State. The amendments make clear that this now includes “individuals who work remotely but are based at the employment site.” Unfortunately, the amended regulations are silent on how to ascertain whether an employee is “based at” a given employment site.
- Updating the Process by Which Employers May Seek Exceptions. The NY WARN Act provides that employers, in certain circumstances, may seek exceptions from the 90-day notice requirement. The amendments now require an employer to obtain a determination from the NYSDOL Commissioner of Labor that the employer has established all of the criteria necessary for the claimed exemption.
- Expanding the “Unforeseeable Business Circumstances” Exception. Presumably recognizing the operational difficulties caused by COVID-19, the amendments amend the “unforeseeable business circumstances” exception—which relieves employers of notice obligations—to now include “a public health emergency, including but not limited to a pandemic, that results in a sudden and unexpected closure, [and] a terrorist attack directly affecting operations.” However, the amendments do not waive notice obligations altogether; rather, regardless of the qualifying exception, employers are still required to “provide as much notice as is practicable accompanied by a statement of the basis for reducing the notice period.
- WARN Act Notices Must Go to Additional Entities. Employers must now provide notice to the following entities “where the site of employment is located”: (i) the chief elected official of the unit or units of local government; (ii) the school district or districts; (iii) the locality that provides police, firefighting, emergency medical or ambulance services, or other emergency services; and (iv) any other individual or entity identified by the NY WARN Act.
- The WARN Act Notice to Employees Must Include Additional Information. Employers must now include the following information in NY WARN Act notices provided to employees: (i) the complete business name and any business names used in the operation of the business; (ii) the address of the employment site where the applicable closing or reduction is occurring; (iii) email addresses of the agent of the employer; and (iv) any additional information, including but not limited to: “information on severance packages or financial incentives if the employee remains and works until the effective date of the mass layoff, relocation or employment loss, available dislocated worker assistance, and, if the planned action is expected to be temporary, the estimated duration.”
- Sellers are Relieved of their Obligation to Provide Notice in Certain Circumstances. In the sale-of-business context, existing regulations provide that sellers “shall be responsible for providing notice for any plant closing, mass layoff, relocation or a covered reduction in hours connected with such sale to affected employees.” The amendments, however, relieve the seller of this notice obligation where the “transfer of employees is a good faith condition of the purchase agreement,” and instead place the burden to provide notice on the purchasing employer.
Other WARN Act regulation updates include expanded circumstances where employers may provide payments in lieu of notice to employees, clarifications regarding the definitions of “temporary” and “permanent” layoffs, and other minor changes to the text of the regulations.
New York State Increases Criminal Liability for Employer Wage Theft
On September 6, 2023, Governor Hochul enacted amendments to the New York criminal larceny statute so that the criminal code now covers “wage theft” as a form of larceny. Such larceny may be a felony or misdemeanor depending on the amount in question. The changes went into effect immediately upon the Governor’s signature. Now, “larceny by wage theft” occurs when “[a] person . . . hires a person to perform services and the person performs such services and the person does not pay wages, at the minimum wage rate and overtime, or promised wage, if greater than the minimum wage rate and overtime, to said person for work performed.” The newly expanded larceny statute is in addition to (and does not replace) existing criminal wage theft statutes in New York, including New York Labor Law Section 198-a (which provides for criminal penalties for employers and their officers and agents who fail to pay wages).
New York State Effectively Banned Captive Audience Speeches
Also on September 6, 2023, Governor Hochul signed into law an amendment to New York Labor Law §201-d that prohibits employers from requiring an employee to attend an employer-sponsored meeting the “primary purpose of which is to communicate the employer’s opinion concerning religious or political matters” or acting against employees who refused to “listen to” or “view” such communications. The law defines “political matters” as “matters relating to elections for political office, political parties, legislation, regulation and the decision to join or support any political party or political civic, community, fraternal, or labor organization.” “Religious matters” include those “relating to religious affiliation and practice and the decision to join or support any religious organization or association.” In addition, employers must post a notice informing employees of their rights under this new law.
The law includes carve-outs for “casual conversations” between employers and employees with respect to political and religious matters, and also exempts communications to employees with “information that is necessary for the employees to perform their job duties,” among other specific exclusions. This bill appears to conflict somewhat with Section 8(c) of the National Labor Relations Act (“NLRA”), which expressly allows employers to “disseminate” their views on unions and labor to employees (if the communication does not carry the threat of reprisal or force or promise of benefit). This may prompt a preemption challenge by affected employers who may argue that this amendment is inconsistent with the federal NLRA, which has already addressed this topic.
New York State Enhances Employee Intellectual Property Protections
As discussed more fully here, New York State in October 2023 expanded employee protections with respect to invention assignments and other intellectual property that employees develop using their own property and time, though the new law still provides important carve-outs that protect employers in certain circumstances. Notably, the new protections apply to prospective agreements as well as existing agreements.
New York City Passes Requirement for a Workers’ “Bill of Rights”
In December 2023, New York City passed a measure that will ultimately require City employers to provide a copy of a “bill of rights” to workers, employees and new hires, regardless of their immigration status. Under the measure, various City agencies will be required by March 1, 2024 to publish a workers’ bill of rights that will (i) identify applicable laws that provide protections to employees and independent contractors; (ii) provide information about employees’ rights to form a union; and (iii) explain that these rights apply regardless of immigration status. By July 1, 2024, City employers will be required to provide a copy of the bill of rights to existing employees and to new employees on the first day of work. There will also be a general workplace posting obligation – both in hard copy and electronically.
New York City Adds “Height” and “Weight” as Protected Classifications
As we discussed in depth here, effective November 22, 2023, “height” and “weight” are now protected classes under the New York City Human Rights Law, and employers are generally prohibited from basing employment decisions upon these two new appearance-based classifications. These prohibitions are, however, subject to some significant exceptions, including instances where the City Commission identifies a job or category of job for which someone’s height or weight might prevent the performance of essential functions of the job, or where a specific height or weight is reasonably necessary for the execution of normal business operations. Employers in New York City should therefore review and update their anti-discrimination/anti-harassment policies and training materials to account for the update, as well as examining and updating job descriptions for situations where an exemption may apply.
New York City Issues Revised Sick and Safe Time Regulations
New York City also issued a set of revised regulations covering the City’s Earned Safe and Sick Time Act (“ESSTA”), as we wrote about here, which went into effect in October 2023. The new rules provide clarity on various ESSTA topics such as calculating employer size, employee eligibility, documentation standards, notice requirements, and accrual methods. In light of the revised rules, New York City employers should review their existing safe and sick time policies and practices to ensure compliance, including making appropriate changes to documentation and notification procedures.
What’s On the Horizon for 2024?
Employers have their hands full with the list of laws discussed above. However, there may be more in store for 2024, not the least of which is New York signing into law restrictions scaling back the use of non-compete agreements. As discussed, here, here, and here, the New York State Legislature passed a bill that would effectively ban non-competes in New York. However, Governor Hochul recently expressed a desire to see changes to the bill before she would agree to sign it into law. The Governor’s potential revisions may include provisions to account for a sale-of-business exception and potentially a $250,000 salary threshold. Governor Hochul’s statements suggest that the Governor and Legislature may look to amend the bill via “chapter amendments”—where the Governor makes a deal with the legislature that she will sign the bill if certain revisions and amendments are made. We will be watching for developments after the new year, when we anticipate seeing these potential amendments take shape.
