Today’s New York employment law landscape is increasingly dynamic, with a constant stream of newly issued legislation and judicial opinions. To keep our readers current on the latest developments, we will share regular summaries of recent developments affecting Empire State employers. Here’s what happened in May 2015:
Cuomo Wages Wage-and-Hour War Against Fast Food Industry
New York lawmakers have, to date, refused Gov. Andrew Cuomo’s latest attempt to raise the statewide minimum wage (that minimum wage is already slated to increase to $9/hour in 2016, but Cuomo has sought to raise it to $10.50/hour). Frustrated by his inability to persuade the legislature to yield to his demands, Cuomo has taken matters into his own hands, launching a unilateral wage-and-hour crusade against one of the state’s most visible industries: fast food restaurants.
On May 6, Cuomo announced that he would empanel a wage board – similar to the one he convened last year to study the state’s tip credit – to remedy alleged wage inequality in the fast food industry. Cuomo has directed the three-person board to examine and recommend whether – and by how much – to raise the minimum wage for New York fast food workers.
According to Cuomo, “[t]he Wage Board will take approximately three months to examine the issue and make recommendations regarding a possible increase,” which, according to the governor’s interpretation of state labor laws, may be enforced without legislative approval. Although Cuomo did not suggest a specific result that the wage board should reach, progressives and union organizers are hopeful that the board will recommend a minimum wage of $15/hour for fast food workers.
While Cuomo claims the goal behind the new board is to combat wage inequality, not everyone agrees with his tactics. According to the New York State Restaurant Association (an organization that advocates on behalf of the food service industry), “singling out a sector of one industry to have a higher minimum wage than all other occupations is unfair and arbitrary. The minimum wage is rightfully set by the legislature and should affect all businesses equally.” Similar concerns have been echoed in Albany, and any board minimum wage hike recommendations that the state attempts to enforce will likely be met by legal challenge.
The wage board will hold four public hearings, the first of which is tentatively scheduled for June 5 in Buffalo. The full schedule can be found here.
Legislature Passes Equal Pay Bill
Propelled by the national “equal work for equal pay” movement, the New York legislature recently approved amendments to section 194 of the New York Labor Law intended to eliminate gender-based pay discrimination. Prior to the amendments, section 194 of the Labor Law provided that:
No employee shall be paid a wage at a rate less than the rate at which an employee of the opposite sex in the same establishment is paid for equal work on a job the performance of which requires equal skill, effort and responsibility, and which is performed under similar working conditions, except where payment is made pursuant to a differential based on: (a) a seniority system; (b) a merit system; (c) a system which measures earnings by quantity or quality of production; or (d) any other factor other than sex.
The amendments make several important changes to this statute.
First and foremost, the amendments supplant subsection (d) (“any factor other than sex”), with the following language: “a bona fide factor other than sex, such as education, training or experience.” The amendments go on to provide that:
such factor: (i) shall not be based upon or derived from a sex-based differential in compensation and (ii) shall be job-related with respect to the position in question and shall be consistent with business necessity. Such exception  shall not apply when the employee demonstrates (a) that an employer uses a particular employment practice that causes a disparate impact on the basis of sex, (b) that an alternative employment practice exists that would serve the same business purpose and not produce such differential, and (c) that the employer has refused to adopt such alternative practice.
The amendments also clarify that workers shall be deemed to be working “in the same establishment,” as that phrase is used in section 194 of the Labor Law, “if the employees work for the same employer at workplaces located in the same geographical region, no larger than a county.” This means that employees may pursue gender-based pay disparity claims based upon compensation earned by employees working at different facilities so long as such facilities are within the same region.
In addition, the amendments provide that employers may not prohibit an employee “from inquiring about, discussing, or disclosing the wages of such employee or another employee.” Employers may nevertheless maintain a written policy imposing reasonable limits on “the time, place and manner for inquiries about, discussion of, or the disclosure of wages.”
Fourth and finally, the amendments provide that, for willful violations of the law, an aggrieved employee may recover liquidated damages equal to 300% of the unpaid wages owed to such employee, triple the rate of recovery for other Labor Law violations.
Governor Proposes New Rules for Companies that Pay Employees with Debit Cards
On May 27, Gov. Cuomo proposed new rules, published in the State Register, outlining the responsibilities and obligations of companies that pay employees using debit cards. Under the proposed rules, such employers must advise employees of all of their options for receiving wages and secure consent before making wage payments via debit card. According to Cuomo, the proposed rules “would require employers to notify employees about local locations where they can access their wages for free . . . [and] to provide unlimited free ATM withdrawals within a local network and a method to withdraw the full amount of wages each pay period.” In addition, the rules would forbid customer service, accountant maintenance, and similar fees often associated with debit cards.
The proposed rules will take effect following the conclusion of a 45-day notice and comment period.
What’s the Takeaway for My Company?
The New York employment law landscape is as vibrant as ever. Employers statewide should brace for a slew of changes in the next year – if not in the next few months – that could dramatically impact their operations and workplace policies. It is more important than ever for employers to stay in regular contact with experienced counsel to discuss these issues, and to prepare a cogent plan of action to face the ever-changing legal standards head-on.