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Employment Law Blog

Categories: Employee Benefits

New York Department of Labor Issues Correction on COVID-19 Disability and Family Leave Benefits

March 25, 2020

As we previously reported, on March 18, 2020, effective immediately, all New York employers must provide sick leave for any employee (with limited exceptions) “who is subject to a mandatory or precautionary order of quarantine or isolation issued by New York, the Department of Health, local board of health, or any government entity duly authorized to issue such order due to COVID-19.” 

New York’s Short-Term Disability and Paid Family Leave have also been expanded to provide these leave benefits for employee absences due to COVID-19 related quarantine/isolation.

Governor Cuomo’s “New York State on PAUSE” Executive Order 202.6 of Friday, March 20, 2020, also known as the “Stay-At-Home” Executive Order (the “Executive Order”), required all non-essential businesses to close by 8 p.m. beginning on March 22, 2020, and for all of their employees to stay home and work remotely if possible.

Since the COVID-19 Paid Leave Law extended disability and paid family leave benefits to employees under quarantine or isolation required by the State; and since the Executive Order required all non-essential workers to stay home; it was initially interpreted that all employees subject to this Executive Order would be entitled to this Leave.  

However, the New York Department of Labor (NYDOL) has now issued a “correction” that the expansion of disability and paid family leave under the COVID-19 Paid Leave Law, does not apply to all employees who have been ordered to stay home under the Executive Order; even though it is clearly a state order of quarantine or isolation for all workers to “stay home,” except for workers in essential businesses. NYDOL now corrects its prior announcement and says that these benefits only apply to employees who have an individualized order of quarantine or isolation.    

We expect this is not the first roll-back “correction” or interpretation” we are going to see as the government calculates the cost of providing these benefits under this and other emergency statutes.

Attorneys: Lauren Topelsohn and Dennis Alessi
Related Practice: Labor and Employment
Category: Employee Benefits, Paid Sick Leave

New York State Requires Paid Leave for Covid-19 Quarantined Employees

March 18, 2020

Effective immediately, and with limited exceptions, all New York employers must provide sick leave for any employee “who is subject to a mandatory or precautionary order of quarantine or isolation issued by New York, the department of health, local board of health, or any governmental entity duly authorized to issue such an order due to COVID-19.

The amount and type of sick leave (paid or unpaid) depends on the number of employees a business had as of January 1, 2020. In addition, businesses with ten or fewer employees must look at their 2019 net income. Based on those variables, employers must provide sick leave as follows:

  • For businesses with ten or fewer employees as of January 1, 2020; and 2019 net income of less than $1 million: Unpaid sick leave (and any other benefit provided by any other law) to an employee under quarantine or isolation until the termination of any quarantine or isolation order. During the leave period, employees are eligible for New York State Paid Family Leave (“PFL”) and short-term disability benefits. 
  • For businesses with ten or fewer employees as of January 1, 2020; and 2019 net income of more than $1 million: At least five days of paid leave, and unpaid leave until the termination of any order of quarantine or isolation. After five days, the employee is eligible for PFL and short-term disability benefits.
  • For businesses with between 11 and 99 employees as of January 1, 2020: At least five days of paid sick leave, and unpaid leave until termination of any quarantine or isolation order. After five days, the employee is eligible for PFL and short-term disability benefits.
  • For businesses with 100 or more employees as of January 1, 2020: At least 14 days of paid sick leave.

Supplemental Sick Leave Benefit. These new benefits are in addition to any other sick leave already provided by the employer. They must be provided without loss to any other accrued sick leave.

Both the federal Families First Coronavirus Response Act, and the New York-specific act were passed on March 18, 2020. In anticipation of the federal act, the New York law provides that to the extent it overlaps with any federal sick leave and/or employee benefits law “related to COVID-19” the New York “quarantine law” benefits are “not available…provided, however, that if the provisions” of New York’s law provides for “sick leave and/or employee benefits in excess of the benefits provided by the federal [act]” an employee is entitled to “to claim such additional sick leave and/or benefits” in the amount of such difference.

Exceptions. New York’s leave law does not apply to an employee who is:

  • Deemed asymptomatic or has not yet been diagnosed with any medical condition and is physically able to work while under a mandatory quarantine through remote access or similar means.
  • Subject to quarantine because: (1) the employee returned to the United States after traveling to a country for which the CDC has issued a level two or three health notice; and (2) such travel was not part of the employee’s employment or at the direction of the employer; and (3) prior to travel, the employee was provided notice of the travel health notice and the eligibility limitations under the law prior. However, the employee may use other accrued leave provided by the employer’s policy or unpaid sick leave for the duration of the quarantine or isolation.

Reinstatement. In addition,employees returning from this leave must be restored to the position they held prior to taking the leave, with the same pay and other terms of employment. Discrimination or retaliation for taking or requesting leave is prohibited.

Finally, employers should be aware that New York’s Short-Term Disability and Paid Family Leave programs have been expanded to provide coverage for COVID-19 quarantine-related absences (for more information see here).

Attorneys: Dennis Alessi and Lauren Topelsohn
Related Practice: Labor and Employment
Category: Paid Sick Leave, Employee Benefits

The Proposed Families First Coronavirus Response Act

March 16, 2020

Late Friday, the United States House of Representatives passed a relief bill aimed at containing the widening effects of the coronavirus on the United States economy and public health. The bill H.R. 6201, the Families First Coronavirus Response Act, is supported by President Trump and still needs to pass the Senate. 

Here are some of the key features of the bill:

  • Employers with under 500 workers must provide two weeks of paid sick leave for full-time employees who become infected with the coronavirus or need to care for someone who is infected, as well as employees who are quarantined or whose place of work or children’s school is closed due to the coronavirus.  For part-time workers, employers with under 500 workers must pay them the typical number of hours they work in a typical two-week period;
  • After two weeks of paid leave, employees would receive a benefit from employers that will be no less than two-thirds of employees’ usual pay;
  • Employees of companies with under 500 workers would have the right to take up to three months of job-protected leave to quarantine themselves or to care for family members who are quarantined or for a child whose school has been closed.  Unlike the federal Family and Medical Leave Act (“FMLA”) and the New Jersey Family Leave Act (“NJFLA”), employees need to have been employed only for thirty (30) days to be entitled to this benefit;
  • The bill calls for a tax credit for businesses and self-employed individuals to cover sick leave equal to one hundred percent (100%) of qualified sick leave wages (with certain caps) paid by an employer for each calendar quarter;
  • The bill proposes $1 billion in grant funding for states to expand unemployment benefits for people who lose their jobs due to the coronavirus outbreak.
As noted above, the bill still needs to pass the Senate.  There are also a lot of unanswered questions, including how it will interact with the federal and various states’ family and medical leave laws.  Stay tuned for further developments.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits

NYC Fair Workweek Law Withstands Industry Challenge

March 9, 2020

New York City's Fair Workweek Law requiring predictable scheduling for retail and fast-food workers, adopted in November 2017, withstood its most serious challenge last month from several business groups. 

The Fair Workweek Law, enforced by the Department of Consumer Affairs, provides that fast-food workers (including those who provide food and drink preparation, cooking, off-site delivery, security, stocking, cleaning, etc.) are entitled to estimated schedules, two weeks’ advance notice of work schedules, employees’ written consent to shift changes generally along with premium pay, priority to work shifts before hiring a new employee, and consent plus a $100 premium for opening the store within eleven hours of having closed it (“clopening”).

Several industry groups, including the NY State Restaurant Association, challenged the Fair Workweek Law by arguing that it was invalid because it sought to preempt the New York Labor Law. In a short three-page opinion, Justice Arthur F. Engoron found that New York City’s Fair Workweek Law “interferes with the freedom of contract and distorts capitalism,” and is “problematically enforceable” but concluded it was narrowly tailored and does not infringe on the state’s ability to regulate employment. He, therefore, dismissed the lawsuit.

We will follow any appeal filed by the industry groups as well as multiple bills currently pending before the New York City Council seeking to expand the law. 

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits, Wage & Hour

Employers Need To Protect Themselves From Expected Next Wave Of Employment Claims

September 30, 2019

While not a new issue, the next wave of employment claims will likely be led by state and federal departments of labor pursuing claims against employers for misclassifying as independent contractors workers who meet the test for being employees.

By classifying employees as independent contractors employers are able to avoid paying various benefits to these workers, ignore the minimum wage and overtime laws, deprive them of state and federal Family Leave laws and social security, and avoid unemployment claims. Misclassification denies states and the federal government many millions of dollars in revenues each year.  States and the federal government have attempted to crack down on these abuses in the past, but now, with so much revenue at stake, their efforts are likely to take hold to many employers’ financial detriment.

What distinguishes an independent contractor from an employee?  Courts and the government had looked at whether the workers’ services are an integral part of the business, the permanency of the parties’ relationship, the contractor’s investment in facilities and equipment, the degree of control exercised over the worker, whether the worker has an opportunity for profits and losses, whether the worker exercises judgement and initiative and whether the party providing the services does so through an independent business organization or operation.  New Jersey now applies the ABC test.  For an employer to establish that a worker is an independent contractor it must satisfy all three prongs, namely (A) that the worker is free from control or direction from the employer, (B) that the worker is providing a service outside the usual course of the employer’s business or is performing that work outside of all places of that business and (C) that the individual is customarily engaged in an independent trade, occupation or business.

In 2017 legislation was proposed entitled the Payroll Fraud Prevention Act.  It was to amend the Fair Labor Standards Act (“FLSA”) and make it unlawful for any person to (1) discharge or discriminate against any employee who files a complaint with respect to his or her employment classification or (2) wrongfully classify employees as non-employees.  The legislation sought to impose double the amount of liquidated damages already provided for under the FLSA.  The legislation was never passed.  However, shortly after New Jersey Governor Murphy took office he created a task force on the subject, which issued a report and recommendations in July of this year.  The report recommends legislative action to increase fines for misclassification, assess employers the costs of any investigation and hold business owners personally liable.  The New Jersey Department of Labor (“NJDOL”) also entered into a Memorandum of Understanding with the United States Department of Labor (“USDOL”) to work together to go after employers who misclassify their workforce.

There has also been a steady increase in civil litigation dealing with worker misclassification.  These suits often are brought as class actions and the damages can be large.  Damages can include the failure to pay overtime, employment tax contributions (for example, social security contributions) and unemployment.  Employers should have experienced counsel review their relationship with contractors and review any written agreements that may be in place, prior to getting the proverbial knock on the door by the NJDOL or the USDOL.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour, Employee Benefits

1099 vs. W2

March 25, 2019

The New Jersey Department of Labor and the New Jersey Division of Consumer Affairs have reminded employers that under N.J.S.A. 43:21-1 et seq., the New Jersey Unemployment Compensation Law (NJUCL), if a service is performed for remuneration or under any contract of hire, written or oral, express or implied, it is considered to be covered employment, unless the potential employer is able to establish the following with regard to the service at issue and the individual providing that service:

(A) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and
(B) Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
(C) Such individual is customarily engaged in an independently established trade, occupation, profession or business.

N.J.S.A. 43:21-19(i)(6).

This statutory criteria, commonly referred to as the "ABC test", is written in the conjunctive. Therefore, where a putative employer fails to meet any one of the three criteria listed above with regard to an individual who has performed a service for remuneration, that individual is considered to be an employee and the service performed is considered to be employment subject to the requirements of the NJUCL; in particular, subject to N.J.S.A. 43:21-7, which requires an employer to make contributions to the unemployment compensation fund and the State disability benefits fund with respect to its employees.

In the event that the State determines an “Independent Contractor” is really an employee, the employer will be responsible for payroll taxes and unemployment contributions for the misclassified employee. If the employer maintains any benefit plans such as 401(K) or medical, the misclassified employee may have retroactive claims for benefits.

If you are contacted by the New Jersey Department of Labor or the United States Department of Labor, the attorneys at Mandelbaum Salsburg are happy to be of assistance and have extensive experience in dealing with these examinations.

Attorney: Martin Hauptman
Related Practice: Labor and Employment
Category: Employee Benefits

Time To Review Your Company's Personnel Policy

November 14, 2018

As the weather gets colder and the days shorter, the end of the year can’t be too far away. Now is a good time to start reviewing your Company’s personnel policies so that your house can be in order to start the new year.

Here are a few questions for your HR team to answer to determine whether you need outside counsel to review your personnel policies and practices:
  1. When was the last time your Employee Manual was reviewed? There have been a number of significant changes in the law that might impact your policies.
  2. Does your Company’s sick leave policy comply with NJ’s paid sick leave law? The new law took effect October 29th.
  3. Has the Company reviewed its pay policies? There were significant changes this year in New Jersey concerning equal pay. In just the past few days Hewlett Packard was hit with a gender pay gap lawsuit.
  4. Do you have a workforce in New York state? If so, has your Company provided them with mandatory sexual harassment prevention training? Has your Company issued a compliant policy? This law became effective October 9th and applies to all employers. It requires annual training. New Jersey also requires training of managers and staff members.
  5. Does your Company require employees to arbitrate disputes? When was the last time your arbitration policy was reviewed? There have been some significant changes in this area. Both Google and Facebook recently announced that they will not require employees to arbitrate sexual harassment claims.
  6. Does your Company require releases when severance is paid? Do the agreements require confidentiality? If so, it might interfere with the Company being able to deduct the severance payments as a business expense.
The Labor & Employment Law Group at the Firm is available to answer any questions you may have or help bring your Company into compliance.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits

It Is Time To Take Your Company's Temperature Concerning HR Compliance

May 29, 2018

How healthy is your Company? Does it comply with all of its obligations under ever-expanding employment laws? Considering all of the recent developments in New Jersey and New York employment law, now is an appropriate time to take your Company’s temperature.

If your Company has an employee manual, now is the time to update it especially considering that New Jersey and New York recently passed legislation dealing with paid sick leave which may impact your current sick leave policy.

As a result of the #Metoo movement, and as reported recently in this blog, there have been significant changes concerning having employees sign settlement agreements in sexual harassment cases or separation agreements containing non-disclosure/confidentiality provisions waiving these claims. Both New York and federal law have changed in this regard. It is, therefore, important to review any form releases your Company uses when terminating employees.

As also reported previously in this blog, the law also has changed concerning equal pay. In New Jersey, it will not only apply to women who are paid less than men but also all other protected classes in the New Jersey Law Against Discrimination. It is, therefore, important to take your Company’s temperature with regard to employee pay.

Lastly, based upon an executive order recently signed by Governor Murphy organizing a task force to review the issue of misclassification of workers, we expect a crackdown on employers who misclassify workers as independent contractors. Now is the time to review those relationships as well.

In summary, having experienced legal counsel help in taking your Company’s temperature now will enable your Company to avoid costly litigation not too far down the road.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits