Law and the Workplace

Final Regulations for New York State Paid Family Leave Law Adopted

Leave of absence form

The New York Workers Compensation Board (the “Board”) has adopted final regulations for implementation of the New York Paid Family Leave Law (“PFLL”).  The final regulations are effectively immediately.

Long awaited by New York employers, the final regulations make several changes to the prior proposed regulations, which were issued by the Board in May and discussed in detail in our prior blog post.

The following are some of the highlights of the final regulations, as well as the Board’s Assessment of Public Comment issued in connection with the final rules (the “Assessment”).

July 1, 2017 Start Date for PFLL Wage Deductions Confirmed

As we had previously discussed, an outstanding question for many employers was whether the final regulations would retain the July 1, 2017 date set forth in the proposed regulations for employers to be permitted to begin implementing the necessary wage deductions for employee contributions under the PFLL (for benefits beginning on January 1, 2018).  The final regulations do not make any changes to the July 1 date.  Therefore, employers are permitted to begin employee wage deductions under the PFLL at any time between now and January 1, 2018, when paid family leave (“PFL”) benefits become available to eligible employees.

In its Assessment of the revisions made to the final regulations, the Board states that “[t]he statute does not require notification of deductions to employees.” However, Sections 380-7.2(a) and (e) of the final regulations do include general posting and written notice requirements for employers, which remain unchanged from the prior proposed regulations.

Calculation of Eligibility Period for Employees With Recurring Break Periods During Employment

The final regulations include an amendment to Section 380-2.5(a), addressing employee eligibility requirements, stating that an employee who is regularly scheduled to work 20 or more hours per week will become eligible to take PFL after 26 consecutive weeks of employment, but that “such consecutive weeks may be tolled during periods of absence that are due to the nature of that employment, such as semester breaks, and when employment is not terminated during those periods of absence.” The Board noted in its Assessment that the new section was added “to clarify that certain jobs, like professors, have built in breaks and that these do not restart the period of employment for purposes of eligibility for paid family leave.”

Benefit Calculation Clarifications

The final regulations include amendments to Section 380-2.5(c), addressing how to compute an employee’s benefit rate for purposes of PFL taken in single-day increments. The final regulations now indicate that the week the employee goes on leave should not be counted as part of the 8-week look back period when calculating the employee’s average weekly wage, so as to avoid reducing the amount of the employee’s PFL benefit based on the employee’s partial absence during that week.  The final regulations also clarify that, for purposes of converting the employee’s average weekly wage to an average daily wage, the average number of days worked per week by an employee can take into account fractions of a day.

Employers Now Mandated to Offer PFLL Waiver to Certain Employees

The final regulations include an amendment to Section 380-2.6(a), addressing the option for employees whose regular employment schedule will not meet the minimum eligibility criteria under the PFLL—i.e., 26 consecutive weeks for employees regularly scheduled to work 20 or more hours per week, and 175 work days in a consecutive 52-week period for employees regularly scheduled to work less than 20 hours per week—to waive their right to PFL benefits (and in turn be relieved of the obligation to make PFLL contributions via payroll deductions).

Whereas the proposed regulations stated that employers “may” provide such employees with the option to waive PFL benefits, the final regulations now state that employers “shall” provide such employees with the option to file a waiver, indicating that employers will now be required to offer a waiver in such cases.  However, the decision as to whether to execute a PFL waiver remains in the sole discretion of the employee.

Clarification on Interplay of the PFLL and New York City Earned Sick Time Act

In its Assessment, the Board addresses Section 380-6.2(a) of the regulations, which permits an employer to offer, and the employee to elect, to use otherwise available and eligible paid time off concurrently with PFL in order to receive full salary during the leave period. While not resulting in any change to the text of the regulations, the Board affirms in the Assessment that “[i]f the rules governing an employee’s use of sick time allow them to use the accrued time off to care for a serious [sic] ill family member”—as is required for employees covered by the New York City Earned Sick Time Act—such time “falls within Section 380-6.2(a) of the . . . regulations” and an employee may elect to use such paid sick time concurrently with PFL and receive 100% of his or her salary during that period.

The Board further reiterates, however, that “[l]eave for an employee’s own illness does not qualify as paid family leave” under the PFLL, and, pursuant to Section 206(3) of the Workers Compensation Law, an employee therefore would be precluded from receiving both PFL benefits and sick pay for the employee’s own illness during the same period.

52-Week “Look Back” Period Clarified for First Year of Implementation

In the Assessment, the Board provides some clarification on Section 380-2.5(f) of the regulations, which states that an employee who is eligible for both statutory short term disability (“STD”) benefits and PFL benefits during the same 52 consecutive week period (computed retroactively from the start of any leave) is limited to a total combined 26 weeks of STD and PFLL benefits during that 52-week period. While not resulting in any change to the text of the regulations, the Board notes in its  Assessment that Section 380-2.5(f) should be interpreted to count any periods of statutory STD an employee has taken in 2017 toward the employee’s total combined STD and PFLL benefit available in 2018.  That is, during the first year of PFLL implementation in 2018, the 52-week “look back” period will extend back into 2017.

Further Guidance on “Comparable Position” Reinstatement Standard Pending

While not resulting in any change to the text of the regulations, the Board states in its Assessment that it plans to issue further guidance on what it means for an employee to be “restored to a comparable position” upon return from PFL as required under Section 203-b of the Workers’ Compensation Law. Specifically, the Board indicates that it plans to address whether and to what extent the “comparable position” standard tracks the meaning of the “same or equivalent position” reinstatement standard under the federal Family and Medical Leave Act (FMLA).

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In addition to the final regulations, the Board has indicated that it will be providing further guidance and examples “as they arise” to the frequently asked questions section of the official Paid Family Leave Law website.

We will, of course, continue to report on further developments.

Massachusetts Permits Disability Discrimination Claims Based on Medical Marijuana Use

On July 17, 2017, the Massachusetts Supreme Judicial Court ruled in Barbuto v. Advantage Sales & Marketing, LLC, that an employee using medical marijuana in treatment of a chronic illness may qualify for protection against disability discrimination under state law, even though the use of marijuana remains illegal under federal law. While the decision addresses a subject of increasing interest as states liberalize their laws on marijuana use, and offers some useful advice for employers, it is not likely to set a new, different burden for employers in Massachusetts.

The Plaintiff, Cristina Barbuto, used medical marijuana in successful treatment of Crohn’s disease. Her marijuana use apparently did not affect her job performance or attendance in any way, and she never used marijuana at the office, nor was she impaired by it at work.  The employer nonetheless terminated her after she tested positive on a drug test; the employer took the position that it followed federal, not state, law on this point.

The Supreme Judicial Court held that while there was no private right of action for wrongful termination under the state’s medical marijuana law, Barbuto’s Crohn’s disease qualified as a disability, and required the employer to consider a reasonable accommodation permitting her to continue with a treatment that had proved effective. Therefore, the Court reasoned, the burden was on the employer to demonstrate that permitting Barbuto to continue would pose an undue hardship.

The Court rejected the employer’s argument that the mere fact of federal legality was enough to constitute an undue hardship per se.

  • The decision is not surprising, because of the unusual circumstance here that Barbuto’s marijuana use seems not to have affected her job performance at all. This decision thus follows the Court’s similar treatment of alcoholism, which is a protected disability as a matter of status, but does not preclude employers from taking action if an alcoholic employee’s illness causes problems at work.
  • Also, the Court’s recognition that the medical marijuana statute itself creates no private right of action suggests that similar cases involving recreational use of marijuana may come out differently. Such users will not be able to take advantage of the statutory protection against disability discrimination, and should have no other statutory remedy.
  • The court acknowledged that federal contractors have obligation under the Federal Drug Free Workplace Act, and this decision likely has no application to those employers.
  • Bottom line: As is always the case when dealing with employees with a disability, bright-line, hard-and-fast rules often lead to litigation and bad results for employers.

In dealing with medical marijuana cases, as with any other disability case, employers should consider the situation individually and assess the effect of the employee’s treatment choices on job performance, attendance, and other similar considerations.

Connecticut Expands Anti-Discrimination and Accommodation Protections for Pregnant Employees and Applicants

Earlier this month, Connecticut Governor Dannel Malloy has signed into law “An Act Concerning Pregnant Women in the Workplace” (the “Act”), which enhances employment protections for pregnant employees and applicants under the state’s existing anti-discrimination law. The expanded protections amend the Connecticut Fair Employment Practices Act (“CFEPA”) and will go into effect October 1, 2017.

The Act maintains most of the current employer obligations that CFEPA requires for pregnant employees, including prohibitions on, among other things, terminating employment due to pregnancy, refusing to provide reasonable leave for disability resulting from pregnancy, or refusing to reinstate an employee after leave for such a pregnancy-related disability unless the employer’s circumstances have otherwise so changed that it is no longer possible to do so.

However, once effective, the Act will now make it a discriminatory practice for Connecticut employers to:

  • limit, segregate, or classify an employee in a way that would deprive her of employment opportunities because of her pregnancy;
  • discriminate on the basis of an employee or applicant’s pregnancy in the terms or conditions of her employment;
  • fail to accommodate a current or prospective employee during her pregnancy, unless providing such accommodation would constitute an undue hardship on the employer;
  • deny employment opportunities to a pregnant employee or applicant if denial is due to a request for reasonable accommodation;
  • require a pregnant employee or applicant to accept a reasonable accommodation if one is not needed;
  • require a pregnant employee take a leave of absence where a different reasonable accommodation may exist that would allow the employee to continue to perform the essential functions of her position; and
  • retaliate against an employee based on her request for reasonable accommodation relating to pregnancy.

The Act further provides expansive new definitions for the terms “pregnancy,” “reasonable accommodation,” and “undue hardship” under CFEPA, as follows:

  • The traditional statutory definition of “pregnancy” is expanded to cover any condition related to pregnancy and childbirth, including but not limited to, lactation.  This definition is significantly broader than both the federal Pregnancy Discrimination Act (which limits “pregnancy” to including related medical conditions, rather than all related conditions) and the prior CFEPA definition (which limited employer accommodation requirements to situations involving “disability” resulting from pregnancy rather than requests relating to healthy pregnancies or conditions that do not otherwise rise to the level of a disability).
  • “Reasonable accommodation” is defined to include, without limitation, such things as permission to sit while working, longer or more frequent breaks, intermittent rest, assistance with manual labor, restructuring of job duties, modified assignments and work schedules, temporary reassignments, time off after childbirth, and break time and facilities for expressing breast milk in the workplace.
  • “Undue hardship” is defined an action requiring significant difficulty or expense, considered in light of factors such as nature and cost, employer financial resources, employer business size, and the effect on expenses and resources of such an accommodation.

Finally, the Act also includes express notice requirements to which Connecticut employers must adhere. Specifically, employers must provide existing employees with written notice of employee rights under the Act within 120 days of the law going into effect, and must also provide notice (going forward) to all new employees upon hire, and to any employee who notifies the employer of a pregnancy within ten days of such notification.  Notice can be satisfied by displaying a poster containing all relevant information in both Spanish and English in a conspicuous location at the employer’s place of business.  It is anticipated that the CT Commission on Human Rights and Opportunities will issue a form posting for this purpose.

We will continue to monitor and report on any new developments with regard to this law.

New Rules Implementing the NYC Freelance Isn’t Free Act To Become Effective on July 24, 2017

As we previously reported, in November 2016, NYC Mayor De Blasio signed into law the Freelance Isn’t Free Act, establishing protections for freelance workers, including the right to receive a written contract for work valued at $800 or more, the right to be paid timely and in full, and the right to be free from retaliation.  The Act became effective on May 15, 2017.

The NYC Department of Consumer Affairs has since published final rules implementing the Act, intended to “clarify provisions in the law, establish requirements to implement and meet the goals of the law, and provide guidance to covered hiring parties and protected freelance workers.”  The new rules will become effective on July 24, 2017.

Highlights of the rules include the following:

  • The text of the Act states that it applies to “hiring parties,” defined as “any person who retains a freelance worker to provide any service” (with the exception of government entities). The rules expand upon the coverage of the Act to now apply to actions taken by “a hiring party, their actual or apparent agent, or any other person acting directly or indirectly on behalf of a hiring party.”
  • The rules place significant limitations on the terms and conditions that may be included in a contract entered into between a freelance worker and a hiring party. Specifically, any such agreement may not include: (i) a prospective waiver or limitation of rights under the Act; (ii) a waiver or limitation on the right of the freelance worker to participate in or receive any relief (monetary or otherwise) from a class or collective action lawsuit or proceeding; (iii) a waiver of “any other procedural right normally afforded to a part in a civil or administrative action” (such as procedural rights under the federal or state rules of evidence or civil procedure); and (iv) confidentiality provisions that restrict a freelance worker’s ability to disclose the terms of the agreement to the Director of the NYC Office of Labor Standards.
  • As noted above, under the Act, covered entities may not retaliate against freelance workers for exercising or attempting to exercise their rights under the law. The rules further define what constitutes an adverse action in violation of the anti-retaliation provisions of the Act, namely: “any action . . .  that would constitute a threat, intimidation, discipline, harassment, denial of a work opportunity, or discrimination, or any other act that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, exercising or attempting to exercise any right” guaranteed under the Act.
  • The rules further state that retaliation “may be established when a freelance worker shows that the exercise or attempt to exercise any right under the [Act] was a motivating factor for an adverse action, even if other factors also motivated the adverse action.” Thus, the final rules  establish a motivating factor causation standard for claims of retaliation, as opposed to a “but-for” standard where retaliation would need to be the sole factor underlying the reason for the adverse action taken.
  • The rules clarify that freelance workers are entitled to the protections of the Act “regardless of immigration status” and that prohibited retaliation includes “any adverse action relating to perceived immigration status or work authorization.”
  • For purposes of defining the value of a contract between a freelance worker and a hiring party (both to establish coverage under the Act and to calculate statutory damages for violations of the Act), the rules state that such value includes “the reasonable value of all services performed and/or anticipated, and the reasonable costs for supplies and other expenses reasonably incurred by the freelance worker.”

We will continue to report on any further developments regarding the Act and the implementation of the new rules.

Washington Enacts Statewide Paid Family and Medical Leave Law

Leave of absence form

On July 5, 2017, Washington became the latest state to enact a paid family and medical leave law, with benefits to go into effect beginning on January 1, 2020.

The new law will provide eligible workers with up to 12 weeks per year of paid medical leave for an employee’s own serious health condition, as well as 12 weeks per year of paid leave for family care purposes, including: (i) care of a family member with a serious health condition; (ii) care of a new child following birth, adoption or foster placement; or (iii) for qualifying exigencies arising out of an employee’s family member being deployed to active duty with the United States Armed Forces.

Workers will become eligible for leave under the law after 820 hours of employment. For purposes of the law, “family members” include an employee’s spouse, child, parent, sibling, grandparent or grandchild.

If an employee has a need for both medical and family care leave during the same 52-week period, the employee’s total leave allotment will be capped at 16 weeks.  Additionally, female employees who experience complications relating to pregnancy will be eligible to receive two additional weeks of leave, for a possible 18 weeks total per year.

Employees taking leave under the law will receive up to 90 percent of their average weekly wage, subject to certain caps based on the statewide average weekly wage and up to a total cap of $1,000 per week.  The program will be funded by combined contributions from the employee and the employer. Businesses with 50 or fewer employees will have the ability to opt-out of the employer pay-in requirement, but those small employers who do contribute will be eligible for state-provided reimbursement assistance.  Companies that already offer paid leave that is at least equivalent to the law’s requirements shall be exempt from the program.

Washington’s law comes on the heels of New York’s paid family leave law, which will be going into effect on January 1, 2018 and, when fully phased in, will provide for up to 12 weeks of paid leave for family care purposes.

We will continue to monitor this law and report on any additional developments and/or guidance that may be issued in advance of the effective date.

Nevada Codifies Amendments For Non-Competes and Other Forms of Restrictive Covenants – Adopts “Blue Pencil” Standard, Imposes Consideration Requirements and Addresses Enforceability Issues

Nevada’s Assembly Bill 276, which became effective on June 3, 2017 (the “NV Law”), articulates new rules and requirements for employee restrictive covenants, some of which fundamentally alter the State’s prior practices. The NV Law addresses consideration generally in non-competition covenants and in circumstances where employees are terminated as the result of a reduction of force, reorganization or other restructuring.  Limitations on customer non-solicitation are also codified. Finally, the NV Law reverses course on state common law developments that had prohibited courts from modifying or “blue penciling” overly broad restrictions.

Non-Competition:

Pursuant to AB 276, a non-competition agreement will be found to be void and unenforceable unless:

(1) It is supported by valuable consideration;

(2) It does not impose any restraint that is greater than is required for the protection of the employer for whose benefit the restraint is imposed;

(3) It does not impose any undue hardship on the employee; and

(4) It imposes restrictions that are appropriate in relation to the valuable consideration supporting the noncompetition covenant.

Notably, the phrase “valuable consideration” is not defined by the statute. It remains to be seen if at-will employment at the time of hire, continuing at-will employment, or something else will be required depending on the nature and extent of the limitation(s) imposed by the covenant.

Termination Circumstances:

The enforcement of non-competes in the specific context of a reduction of force, reorganization or similar restructuring is also addressed by the NV Law. In such circumstances, the non-competition covenant is only enforceable during the period in which the employer is paying the employee’s salary, benefits or equivalent compensation, including severance pay.

Non-Solicitation:

The Nevada Legislature addressed customer non-solicitation provisions, stating that employers may not restrict former employees from providing service to a former customer or client if:

(1) The former employee did not solicit the former customer or client;

(2) The customer or client voluntarily chose to leave and seek services from the former employee; and

(3) The former employee is otherwise complying with the limitations in the covenant as to time, geographical area and scope of activity to be restrained, other than any limitation on providing services to a former customer or client who seeks the services of the former employee without any contact instigated by the former employee.

Of note, the Legislature identifies these restrictions as a non-competition covenant (as opposed to a non-solicitation covenant) but, in contrast to the non-compete restrictions discussed above, it does not directly address what, if any, consideration is required to support these restrictions.

Enforcement and Blue Pencil:

Representing a dramatic departure from Nevada’s established precedent against “blue penciling” restrictive covenant agreements, this practice is now explicitly required. Generally speaking, courts across the country have adopted one of three approaches when addressing over-broad restrictive covenants – rejecting the restrictive covenant in its entirety (“no blue penciling”), striking only the overbroad terms (“strict blue penciling”), or revising the restriction to make it reasonable under the circumstances (“general blue penciling”). Until the NV Law, Nevada had opposed any form of “blue penciling” practice, with the Supreme Court recently holding that where “the work exclusion term is unreasonable, the agreement is wholly unenforceable, as we do not modify or ‘blue pencil’ contracts.” See Golden Road Motor Inn, Inc. v. Islam, 376 P.3d 151, 153 (2016). However, so long as they are supported by “valuable consideration,” going forward Nevada Courts “shall revise” overbroad restrictive covenants that impose a greater restraint than is necessary to protect the employer’s interests and impose an undue hardship on the employee.  The Court’s revisions must cause the limitations (e.g. time, geographical area, and scope of activity to be restrained) to be reasonable and no greater than necessary to protect the interest of the employer.

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