[UPDATE: The New York State Department of Labor has now published an updated Form IA 12.3 (Record of Employment), which employers should use to comply with their notice obligations under S 4878A beginning November 13, 2023.]
For New York employers, fall has brought with it more than just cooler temperatures, thanks to a wave of activity from Governor Kathy Hochul’s desk (after a busy legislative summer). Below, we highlight six significant employment bills that the Governor recently signed into law, as well as key pieces of legislation that continue to await her review.
Employee Assignment of Certain Intellectual Property Rights (S 5640)
New York joined the growing list of states providing employees with stronger intellectual property protections when S 5640 took effect on September 15, 2023. As we previously reported, the new law generally makes unenforceable any provision in an employment agreement that requires an employee to assign to the employer (or offer to assign) an invention that the employee develops on their own time and without the employer’s equipment, supplies, facilities, or trade secret information. There are, however, two significant exemptions under the law, whereby inventions that would otherwise not be assignable (i.e., are created on the employee’s own time and without the employer’s tools, etc.) may still nonetheless be assigned: (i) if, at the time of conception or reduction to practice, the invention relates to the employer’s business, actual research or development, or anticipated research or development, or (ii) if the invention results from work that the employee performs for the employer.
As hostility from state legislators and federal agencies toward noncompete and other restrictive covenants increases (more on that below), it is especially important that employers’ confidentiality and intellectual property agreements are in good shape. To the extent they have not already done so, New York employers should review their intellectual property agreements and policies to ensure compliance with S 5640’s new requirements.
Employer-Sponsored Meetings and Communications (S 4982)
Another law taking immediate effect upon Governor Kathy Hochul’s signature this September was S 4982, which:
- bans employers from taking adverse action against employees who fail to attend meetings or listen to communications about the employer’s views on certain religious and political matters; and
- requires employers to post a notice to employees of their rights thereunder.
A handful of other states have also adopted so-called “captive audience” laws, including New Jersey, Minnesota, Maine, and Connecticut (the latter of which is the subject of pending litigation). Much attention has been given to these laws’ impact on unionization efforts, but it is especially important in today’s politically-charged climate that all employers – regardless of whether their employees are attempting (or may attempt in the future) to become unionized – understand how broadly S 4982 applies.
In addition to an employee’s decision to join a labor organization, S 4982 defines “political matters” to include “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, [or] fraternal … organization.” Similarly, “religious matters” includes “matters relating to religious affiliation and practice and decision to join or support any religious organization or association.” As such, unless one of the specific statutory exceptions apply, any mandatory employer-sponsored meeting or communication that implicates political and religious topics is likely to fall within the law’s scope.
Access to Personal Social Media Login Information (S 2518A)
Next year, New York workers will gain new privacy protections for their personal social media accounts. Beginning March 12, 2024, S 2518A will prohibit New York employers from requesting, requiring, or coercing an applicant or employee to: (i) disclose login information (including usernames and passwords) for personal social media accounts; or (ii) access personal social media accounts in the employer’s presence. The law will also prohibit retaliation against an applicant or employee who refuses to disclose their personal social media account login information. The law further prohibits employers from copying or otherwise reproducing information that an employer unlawfully obtains from an applicant or employee’s personal social media account.
Significantly, the law contains several carveouts, including in certain situations where the employee’s social media account is used for business purposes. As such, employers should be sure to review their social media policies and recruiting/on-boarding practices to ensure that they comply with S 2518A next year.
Notice of Unemployment Insurance Benefits (S 4878A)
Beginning November 13, 2023, S 4878A will amend Section 590 of the New York Labor Law (“Section 590”) to require employers to notify eligible employees of their right to file an application for unemployment benefits when the employee’s employment is permanently or indefinitely separated, as well as when the employee experiences a reduction in hours, a temporary separation of employment, or “any other interruption of continued employment that results in total or partial unemployment.” New York employers will note that under current guidance from the New York State Department of Labor (NYSDOL) they have long been required to provide such notice only when an employee is permanently or indefinitely separated. Importantly, the NYSDOL is responsible for issuing or approving a form notice that complies with new Section 590. Historically, employers have been authorized to use NYSDOL’s Form IA 12.3 (Record of Employment) to satisfy their notice obligations, but it remains to be seen if the NYSDOL will publish a revised Form IA 12.3 or an entirely new form to comply with S 4878A’s expanded requirements.
Back in the spring, New York enacted legislation progressively raising the state’s minimum wage so that by 2026, it will be $17 per hour in downstate New York and $16 per hour everywhere else. This legislation did not, however, change the salary threshold requirements to be exempt from overtime laws pursuant to NYSDOL wage orders or wage payment protection laws under Article 6 of the New York Labor Law (“Article 6”). An increase to the former is still pending proposed regulations, while an increase to the latter is now set to take effect next spring.
The NYSDOL has proposed, but not finalized, updates to its wage orders to address the impact of the minimum wage increases on salary thresholds for exempt workers and various allowances (housing, uniform maintenance, etc.). The proposed regulations would augment the salary thresholds so that they will gradually increase on January 1 of the next three years (a shift from the prior December 31 changes to salary thresholds) as follows: downstate New York - $1,200.00/week in 2024, $1,237.50/week in 2025, and $1,275.00/week in 2026; everywhere else - $1,124.20/week in 2024, $1,161.65/week in 2025, and $1,199.10/week in 2026. Employers should stay tuned for that update as well.
Pursuant to S 5572, beginning March 13, 2024, the minimum salary that white collar employees must earn to be exempt from Article 6’s requirements will rise from $900 to $1,300 per week. Article 6 outlines specific pay practices with which employers in the state must comply, including the timing of wage payments and the circumstances under which wages may be directly deposited. As such, New York employers should be sure to review executive, administrative, and professional employees’ salaries to confirm that they will continue to qualify for relevant Article 6 exemptions in 2024.
Additionally, the penalties for committing wage theft now include prosecution for criminal larceny, thanks to amendments to New York’s Penal Law that took effect on September 6, 2023. Specifically, pursuant to S 2832A, larceny by wage theft occurs when someone “hires a person to perform services and the person performs such services” but is not paid the minimum wage rate and overtime (or the “promised wage, if greater than the minimum wage rate and overtime”) for such work. With these new criminal penalties, it is vital that employers review their pay practices to ensure that they comply with the ever-changing New York legal landscape.
Preview of Potential Changes Still to Come
After a busy legislative session, Governor Hochul’s desk is far from clear, with several bills previously adopted in the legislature still awaiting presentation to the Governor. Included among those bills are:
- S 3100A, which, as we previously reported, would significantly change the landscape for New York employers by generally banning post-employment noncompetes. The legislation is among the broadest in the country – even broader than the Federal Trade Commission’s proposed rule – so it remains to been seen whether Governor Hochul (once presented with the bill) will sign it into law as-is or take other executive action.
- S 5026 (the Freelance Isn’t Free Act), which would provide freelance workers in the state with several significant new protections, including a right to payment within 30 days of completing their services. New York employers will remember that last year Governor Hochul vetoed similar legislation. Notably, in 2017, New York City enacted a similar local law.
- S 4516, which would amend Section 5-336 of the New York General Obligations Law to further restrict the use of non-disclosure provisions within settlement agreements, including by extending the law’s protections to independent contractors, revising the time period within which employees may document their preference for confidentiality, and adding new restrictions on requiring workers to affirmatively state that they were not subject to unlawful discrimination, harassment, and/or retaliation.
As the legal landscape in New York continues to develop, it is more important than ever that employers take steps now to understand and comply with those laws that have already been enacted and prepare for what may yet still be coming down the pipeline.
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