New Year, New Laws: What You Need to Know as We Enter 2022

Kramer Levin Naftalis & Frankel LLP

Over the past two years, developments in employment law have focused on COVID-19. But there are developments in other areas of employment law, especially in New York, that employers must be aware of and plan for in the new year. This alert highlights the major changes that take effect in 2022 and beyond.

Expanded Protections for Employees

Whistleblower Law: S4394A/A5144A

On Oct. 28, 2021, Gov. Kathy Hochul signed into law a bill that will massively expand New York’s whistleblower protections. It will take effect on Jan. 26, 2022. 

Expanded protected activity: The range of protected activity is significantly expanded under the new law. Most critically, the existing law protected only disclosures regarding violations of law that presented a “substantial and present danger to public health or safety” – a narrow definition that rarely applied to most employment situations. In addition, under the previous law, employees were protected only for disclosures about employer practices that actually violated applicable law. Now, employees are protected for disclosures to a supervisor or “public body” about employer practices that they “reasonably believe” are in violation of a “law, rule or regulation” or that they “reasonably believe” pose a substantial and specific danger to public health or safety. The definition of “law, rule or regulation” will expand to include executive orders and any judicial or administrative decision, ruling, or order. In addition, the definition of “public body” to which an employee may make disclosures will expand to include any federal, state, or local department of an executive branch of government and any division, board, bureau, office, committee, or commission of any public body. 

Note that employees will lose the protection of the statute if they do not first make a good faith effort to notify their employer of their concerns before making a disclosure to a public body. Such employer notification is not required, however, where: (a) there is an imminent and serious danger to public health and safety; (b) the employee reasonably believes that reporting would result in the destruction of evidence or other concealment; (c) the potentially wrongful activity could reasonably be expected to lead to endangering a minor; (d) the employee reasonably believes that reporting would result in their physical harm or someone else’s; or (e) the employee reasonably believes that their employer is already aware of the potentially wrongful activity and will not correct such activity.

Expanded definition of “employee”: The new law expands the definition of who is protected from retaliation for whistleblowing (“employees”) beyond current employees to include former employees and independent contractors.

Expanded prohibited conduct: The new law redefines unlawful retaliatory action to extend beyond discharge, suspension, demotion, or other adverse action and mean “an adverse action taken by an employer or his or her agent to discharge, threaten, penalize, or in any other manner discriminate against any employee . . . exercising his or her rights,” with “adverse action” specifically including: (a) taking or threatening to discharge, suspend, or demote; (b) actions or threats to take actions that would adversely impact a former employee’s current or future employment; and (c) threatening to contact the United States immigration authorities or otherwise reporting or threatening to report an employee’s suspected citizenship or immigration status or the suspected status of an employee’s family or household member. 

Other expansions: The new law contains several other expansions worth noting: (a) expanding the statute of limitations from one to two years after the alleged retaliatory action was taken; (b) clarifying that any party to an action under the law is entitled to a jury trial; (c) providing for front-pay damages, a civil penalty of up to $10,000, and punitive damages for willful, malicious, or wanton violation of the law; and (d) mandating that employers inform their employees of their rights under the law by posting a conspicuous notice.

Privacy: S2628/A430

Effective May 7, 2022, New York’s Civil Rights Law will be amended to add section 52-c, which provides employee protection over electronic communication monitoring. 

Under the new law, any employer in New York State (regardless of size) that engages in electronic monitoring or otherwise intercepts telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage by any electronic device (including computers, telephones, wires, radios, etc.) must give prior written notice and receive an acknowledgment of such notice from employees upon hiring that are subject to such monitoring. The required notice may be made in writing, in an electronic record, or in another electronic form that is acknowledged in writing or electronically. 

There is no guidance yet on what constitutes “acknowledgment” of receipt. As written, the law states that an employer “shall give prior written notice upon hiring to all employees who are subject to electronic monitoring. The notice required . . . shall be in writing, in an electronic record, or in another electronic form and acknowledged by the employee either in writing or electronically.” Employers are required to post notice of their electronic monitoring in a conspicuous place, which is readily available for viewing by its employees who are subject to monitoring. We therefore recommend that employers update their handbooks to include this notice and require their new hires to sign and return acknowledgment that they have read and agree to comply with the handbook. In addition, it continues to be good practice to have a welcome screen that advises individuals logging into the network that all communications are subject to monitoring and are not considered private.

The law applies to any individual, corporation, partnership, firm, or association with a place of business in New York State, but it does not include the state itself or any political subdivision of the state. It also does not apply to processes that an employer uses to monitor electronic communication that is not for the purpose of monitoring or intercepting use by a particular individual, and is instead solely for the purpose of performing computer maintenance and/or protection.

The attorney general of the state of New York has jurisdiction to enforce the law, and any employer found to be in violation is subject to a maximum penalty of $500 for the first offense, $1,000 for the second offense, and $3,000 for the third offense and any additional offenses.

Automated Employment Decision Tools: Int. No. 1894-A

Effective Jan. 2, 2023, employers in New York City will be banned from using automated employment decision tools (such as artificial intelligence) to screen job candidates unless the technology has been subject to a “bias audit,” making this law the first of its kind in the nation.

Automated employment decision tools that fall within the scope of the law are defined as computational processes that issue simplified outputs (e.g., scores) that are used to “substantially assist or replace discretionary decision making for making employment decisions . . . .” Before using such tools, employers must conduct a bias audit, defined as an impartial evaluation by an independent auditor that evaluates the relevant tool for its disparate impact on the basis of race/ethnicity and sex, within one year before the tool is used. Employers must then publish the results of the audit and the distribution date of the tool subject to the audit on their public website.

Employers will also be required to disclose to “employees and candidates that reside in the City” who apply for a position or promotion that such a tool will be used in the assessment or evaluation of such individuals at least 10 business days before the tool’s use and allow a candidate to request an alternative selection process or accommodation. In addition, employers must also notify “employees and candidates that reside in the City” about the job qualifications and characteristics that the decision tool will be used in the assessment of such candidate or employee at least 10 business days before use. Candidates and employees who reside in the City are entitled to, within 30 days of written request, information about the type of data collected for the decision tool, the source of such data, and the employer or employment agency’s retention policy.

Violations of the law could result in a $500 fine for the first violation and up to $1,500 for subsequent violations, and enforcement is vested in the corporation counsel or such other persons designated by the counsel.

Salary Disclosure

On Dec. 15, 2021, the New York City Council approved a bill amending the city’s Human Rights Law, making it an unlawful discriminatory practice for employers in New York City with four or more employees to post a job, promotion, or transfer opportunity within New York City without stating the minimum and maximum salary for such position. The minimum and maximum salary should represent the range that the employer in good faith believes at the time it will pay for the advertised job, promotion, or transfer. The mayor has until Jan. 15, 2022, to take action on the bill; otherwise, it becomes law 30 days thereafter and is effective 120 days after that, but the New York City Commission on Human Rights is authorized to promulgate rules to implement the law before that date.

If it becomes law, this modification would substantially change job posting requirements and follows a trend of other progressive jurisdictions imposing such requirements.

Paid Family Leave

Under prior regulations, when taking New York Paid Family Leave (PFL) on an intermittent basis, the maximum days of PFL that an employee was permitted to use was determined by multiplying the average number of days worked per week by 12, with a 60-day cap for employees working at least five days per week.

Under the new regulation, adopted by the Workers’ Compensation Board on Oct. 6, 2021, and effective Jan. 1, 2022, the 60-day cap has been eliminated, and employees who work more than five days per week will be eligible to take additional intermittent PFL, calculated simply as the average number of days worked per week multiplied by 12. Thus, employees who work six days per week are entitled to 72 days per year, and employees who work seven days per week are entitled to 84 days per year. The revised regulation does not affect employees who work five or fewer days per week.

In addition, on Nov. 1, 2021, Gov. Hochul signed S2928-A/A6098-A into law, adding siblings to the definition of “family member” for the purposes of PFL. “Sibling” is defined as a biological or adopted sibling, a half-sibling, or a stepsibling. The new law takes effect on Jan. 1, 2023. Notably, siblings are not covered by the federal Family and Medical Leave Act.

Wage and Hour

Tip Regulations Under the Fair Labor Standards Act (FLSA): Effective Dec. 28, 2021

In December 2020, the Wage and Hour Division of the U.S. Department of Labor (DOL) promulgated a final rule (2020 Tip final rule) to amend its tip regulations to address the Consolidated Appropriations Act of 2018 amendments to Section 3(m) of the FLSA, which allows an employer to satisfy a portion of its minimum wage obligation to a “tipped employee” by taking a partial credit, known as a “tip credit,” toward the minimum wage based on the amount of tips an employee receives, provided the employer meets certain requirements. In a new final rule, published on Oct. 29, 2021, the DOL withdrew one portion of the 2020 Tip final rule and finalized its proposed revisions related to the determination of when a tipped employee is employed in dual jobs under the FLSA.

“Tipped employees” are, under Section 3(t) of the FLSA, “any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.” Congress delegated to the DOL to define “occupation” and what it means to be “engaged in an occupation.” Up until 2018, the DOL applied the 80/20 rule for “dual jobs” employees in which an employer could take tip credit for tipped employees who spent 20% or less time in duties related to their tipped occupation but for which those duties are not themselves directed toward producing tips. In 2018, the DOL rescinded its 80/20 rule guidance and no longer prohibited an employer from taking tip credit for time a tipped employee spent performing non-tipped duties as long as they were performed contemporaneously with, or for a reasonable time immediately before or after, tipped duties. This guidance was to be codified as part of the 2020 Tip final rule and go into effect on Dec. 31, 2021. 

But in June 2021, the DOL proposed to withdraw and re-propose the dual jobs provision of the 2020 Tip final rule. And now, under the new final rule, effective Dec. 28, 2021, an employer may once again only take a tip credit when its tipped employees perform work that is part of the employees’ tipped occupation. Work that is part of the tipped occupation includes work that produces tips as well as work that directly supports tip-producing work, provided the directly supporting work is not performed for a substantial amount of time, with “substantial amount of time” again being defined as over 20%. In essence, the final rule recognizes that when a tipped employee performs a substantial amount of directly supporting work that does not itself produce tips, they cease to be engaged in a tipped occupation under the FLSA and the employer may not take a tip credit for that employee.

Minimum Wage for Federal Contractor Employees: Effective Jan. 1, 2022

Pursuant to Executive Order 13658, effective Jan. 1, 2022, the minimum wage rate that generally must be paid to workers performing work on or in connection with federal contracts will increase to $11.25 per hour and the required minimum wage that generally must be paid to tipped federal contractor employees will increase to $7.90 per hour. Pursuant to Executive Order 14026, federal contracts entered into on or after Jan. 30, 2022, or that are renewed or extended on or after that date, generally will be subject to a $15 minimum wage rate. 

Minimum Wage Rates in New York Effective Dec. 31, 2021: 12 NYCRR 146, 12 NYCRR 142

The minimum wage everywhere outside of New York City, Long Island, and Westchester increased effective Dec. 31, 2021. The minimum wage for fast-food workers outside of New York City and employees in Nassau, Suffolk, and Westchester counties increased to $15 an hour, while the minimum wage everywhere else is now $13.20 an hour. 

Under the Hospitality Wage Order, employers can continue to apply a tip credit, but standards differ depending on whether the employee is a “service employee” or a “food service worker.” Employers must directly pay “service employees” and “food service workers” at least the Minimum Cash Wage and cannot claim a tip credit that exceeds the Maximum Tip Credit. Additionally, for “service employees,” employers’ ability to claim the tip credit depends on the employees' weekly tip average equaling at least the hourly Tip Threshold and their direct wage plus tips equaling or exceeding the minimum wage.

The wage rates as of Dec. 31, 2021, are as follows:

   

New York City, Long Island, and Westchester

Remainder of State

Miscellaneous Industries

Minimum Wage

$15 

$13.20

Service Employees

Minimum Cash Wage

$12.50

$11

 

Maximum Tip Credit

$2.50

$2.20

 

Tip Threshold (generally)

$3.25

$2.85

 

Tip Threshold (resort hotels)

$8.40

$7.40

Food Service

Minimum Cash Wage

$10

$8.80

 

Maximum Tip Credit

$5

$4.40

White Collar

Weekly

$1,125

$990

 

Monthly

$4,875

$4,290

 

Annually

$58,500

$51,480

COVID-19

For more information on the ever-changing local, state, and federal landscape regarding COVID-19 regulations, including the federal contractor vaccine mandate, the Occupational Safety and Health Act COVID-19 Vaccination & Testing Emergency Temporary Standard, New York State’s statewide mask-or-vaccine requirement, and New York City’s vaccine mandate for private sector workers, please see our prior alerts from Dec. 22, 2021, and Nov. 16, 2021.

In addition, New York Gov. Hochul’s State of Emergency is in effect through Jan. 15, 2022, with the possibility of extension and additional rules. Employers must stay up to date on relevant executive orders.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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