New York lawmakers have been busy enacting a number of laws and regulations in 2023 that impose new requirements on employers, several of which have recently taken effect. New York employers may need to update their policies, agreements, and practices to comply with the new laws, as summarized below.
Invention Assignment Agreements
On September 15, 2023, New York Governor Kathy Hochul signed a bill that restricts the permissible scope of employee assignment of inventions clauses. With this new law—which added new Section 203-f to the New York Labor Law and took effect immediately—New York has joined several other states, including California, Illinois, and New Jersey, in prohibiting employers from requiring assignment of inventions that employees created outside of work hours and without using their employers’ resources.
Under new Section 203-f, “[a]ny provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information”—except for inventions that either: “(A) relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or (B) result from any work performed by the employee for the employer.” Section 203-f further provides that invention assignment provisions that violate the statute are against public policy and unenforceable.
Employers should promptly review their invention assignment provisions to ensure compliance with New York and any other applicable laws.
As discussed in a previous post, New York’s new pay transparency law took effect on September 17, 2023. The law requires most employers to disclose the pay range and job description (if one exists) in any advertisement for a job, promotion, or transfer opportunity that will be physically performed in New York or that will require an employee to report to a supervisor or office in New York.
New York’s Department of Labor has issued proposed regulations to clarify employer requirements under the law. The main takeaways from the proposed regulations are summarized below.
- The law applies to private employers with four or more employees, except for temporary help firms.
- The law covers advertisements for jobs, promotions, or transfer opportunities “that will physically be performed, at least in part,” in New York, as well as jobs that “will physically be performed outside of New York but report to a supervisor, office, or other work site in New York.” The law does not cover advertisements for jobs requiring only incidental or infrequent presence in New York, such as for work trips, meetings, or conferences, or mere communication with employees based in New York.
- Job advertisements, regardless of the medium in which they are posted, are subject to the law. Thus, newspaper ads, printed flyers, social media posts, emails sent to applicants, or other types of job postings will need to include salary ranges.
- Advertisements are covered regardless of whether they are posted by the employer directly or through a third-party, such as a recruiter or job listing website.
- Employers are responsible for ensuring third-party advertisements comply, unless a third-party posted an advertisement without the employer’s knowledge or consent.
- The law does not require employers to advertise for open opportunities; in other words, employers can hire, promote, or transfer an employee without creating an advertisement.
- Advertisements must contain a job description if one exists.
- A job description may not be required where the name of a position or job title clearly conveys the full extent of the duties required. For example, “an employer posting an advertisement for a dishwasher who will be solely washing dishes may not have a more detailed job description available.”
Range of Compensation:
- Advertisements must disclose the compensation or range of compensation for an open role.
- The “range of compensation” is the minimum and maximum annual salary or hourly wage for the position, which the employer in good faith believes is accurate at the time of the advertisement. “Good faith” means the range of compensation the employer legitimately believes that it is willing to pay at the time the advertisement is posted. An employer may lack good faith if it posts a range that is so broad that it prevents an applicant from understanding the legitimate range that the employer is willing to pay for the open role.
- The range cannot be open-ended (e.g., “maximum of $50,000 per year” is impermissible) and it must be for a single opportunity and a single geographic location or region.
- If an advertisement is intended to cover multiple locations or levels of seniority, then the range of compensation for each opportunity must be included in the advertisement.
- The range of compensation does not include paid time off, sick leave, or other leave benefits; employer-sponsored retirement or savings plans; insurance; severance pay; overtime pay; or other forms of compensation such as commissions, tips, bonuses, stocks, or the value of employer-provided meals or lodging.
- Employers may change the range of compensation after collecting more information throughout the hiring process.
- If the compensation information is too long to fit into the space allotted in the advertisement, the employer can provide this information in a separate attachment or addendum, so long as it is available free of charge and easily accessible to prospective applicants, and the advertisement clearly states where the range of compensation information is available. For example, employers can provide a hyperlink in the advertisement to a separate attachment that provides the compensation information.
- Any person claiming to be aggrieved by a violation may file a complaint.
- The Commissioner of Labor can also initiate its own investigations.
The regulations, which are designed to provide clarity on the application of New York Labor Law Section 194-b, will take effect once they are finalized and published following the public comment period. Public comment on the proposed regulations will be available until November 13, 2023. Comments may be submitted to email@example.com.
Unemployment Insurance Notice
Effective November 13, 2023, New York employers must provide a written notice of the right to file for unemployment benefits to any employee who has been terminated or whose scheduled work hours have been reduced to a point that the employee qualifies for total or partial unemployment benefits. The notice must be provided at the time of each permanent, temporary, or indefinite separation from employment, reduction in hours, or other interruption that results in total or partial unemployment. In addition, the notice must include the employer’s name, registration number, and address, and must be “in writing on a form furnished or approved by the Department.” The New York Department of Labor previously issued a sample notice, although employers should monitor the Department’s website in the event an updated version is published. The new law amends Section 590 of the New York Labor Law.
Wage Theft as Larceny
On September 6, Governor Hochul signed legislation, which took effect immediately, to amend the New York Penal Law to classify “wage theft” as criminal larceny. “Wage theft” is defined as not paying “wages, at the minimum wage rate and overtime, or promised wage, if greater than the minimum wage rate and overtime,” to a person who was hired to perform work. The law also allows the prosecution to aggregate non-payments or underpayments for one employee, which could result in harsher penalties for employers.
The new law adds to existing criminal penalties for wage theft under New York’s Labor Law, including New York Labor Law Section 198-a, which provides for criminal penalties for employers and their officers and agents for “failing to pay the wages of any of [their] employees,” and Section 662, which makes it a crime for employers and their officers and agents to pay employees less than the minimum wage. Under either section, an employer may be guilty of a misdemeanor and fined between $500 to $20,000 or imprisoned for not more than one year for the first wage theft offense.
Access to Employees’ Personal Accounts
Starting March 12, 2024, New York employers will be prohibited from requesting or requiring employees or applicants to provide employers with login information to personal accounts, including social media accounts.
A recently signed bill adds a new Section 201-i to the New York Labor Law that restricts employers from requesting, requiring, or coercing any employee or job applicant to:
- Disclose any username, password, or other authentication information for accessing a personal account through an electronic communication device;
- Access the employee or applicant’s personal account in the presence of the employer; or
- Reproduce photographs, videos, or other information contained within a personal account obtained by prohibited means.
Employers also may not take any adverse action against an employee, or refuse to hire an applicant, for refusing to provide any of the above information.
Employers may continue to view publicly available information on an individual’s social media account. Employers may also require disclosure of login information for accounts that are used for business purposes, and may access certain employer-provided devices, provided that the employer does not access any personal accounts on such device. In addition, the law does not prohibit or restrict an employer from viewing, accessing, or utilizing information that is voluntarily shared by an employee, client, or third party to obtain reports of misconduct or investigate misconduct.
New York City Sick and Safe Leave Regulations
On October 15, 2023, changes to regulations governing New York City’s Earned Safe and Sick Time Act (ESSTA) took effect. The ESSTA requires employers with fewer than 100 employees to provide up to 40 hours of paid or unpaid leave annually (depending on the size of the organization), while employers with 100 or more employees are required to provide up to 56 hours of paid leave annually. Several noteworthy changes in the regulations are described below.
- Employees who perform work, including telecommuting, only while physically located outside of New York City are not covered under the ESSTA. However, an employee with a primary work location outside of New York City may be covered “if they regularly perform, or are expected to regularly perform, work in New York City,” but only the hours worked in the City count for accrual of safe and sick leave. For example, a retail employee who primarily works from home in New Jersey but is expected to regularly work one to three daylong shifts per month in New York City will accrue safe and sick leave for the hours worked in the City. Employees that only travel to the City for a day or two over the course of an entire calendar year would not be covered under the ESSTA.
- The headcount calculation, which is used to determine the amount of leave an employer must provide, is based on the number of employees nationwide—not only those employees in New York City—and is determined by counting the highest total number of employees currently employed at any point during the calendar year to date.
Advance Notice of Leave:
- Employers are permitted to require reasonable advance notice of an employee’s need to use leave under the ESSTA. This requirement must be stated in an employer’s written policy, which must also include the types of written documentation the employer will accept to meet the advance notice requirement and instructions on how employees can submit the documentation.
- Employers can only require notice provided via “reasonable methods,” such as sending an email to a designated email address or submitting a leave request in a scheduling software system.
- Employees are entitled to reimbursement for all reasonable costs or expenses incurred in securing documentation.
- Each pay period, employers must inform employees of the amount of safe and sick time accrued and used during the pay period and provide the employee’s total balance of leave time.
- Employers can satisfy this requirement using a paystub or through an electronic system that is accessible to employees.
- Employees are no longer subject to a 120-day waiting period before sick and safe leave can be taken.
- In their sick and safe leave policies, employers must either (1) state that accrual of leave begins on the employee’s first day and employees can use leave as it accrues, or (2) provide the total amount of leave that will be frontloaded on an employee’s first day and state that the frontloaded time is immediately available for use.
Update on Pending Non-Compete Legislation
In June 2023, the New York State Legislature passed a groundbreaking bill that, if enacted, would ban post-employment non-compete agreements for all workers, regardless of their role or salary level. The bill, which has major legal and business implications for employers, does not contain an exemption for non-compete agreements entered into in connection with the sale of a business.
Governor Hochul has not yet acted on the non-compete legislation, and has until the end of the year to either sign or veto the bill. Governor Hochul can also request a “chapter amendment” to the bill, which occurs when the Governor provisionally signs a bill with the agreement that the legislature will re-pass the bill with changes negotiated between the Governor’s office and the bill sponsors. We will continue to monitor developments and provide you with any updates.